The debt mess is a huge mess and a whole slew of people aren’t serious about cleaning it up.
Yesterday, the non-partisan Congressional Budget Office (CBO) scored John Boehner’s plan and said that it only cut the deficit by about one trillion dollars over ten years. That same office scored Harry Reid’s plan and said that it would cut twice that in the same time period. Neither are serious efforts at curtailing spending.
Our current national debt stands at $14.3 trillion dollars. We ran a $1.4 trillion deficit just this year. Boehner’s plan wouldn’t even fix the amount we overspent this year and Reid’s wouldn’t cut enough out of future deficits to remedy the amount of overspending for which Obama is to blame.
Paul Ryan was serious when he presented his framework that the DNC killed by showing images of grandma being pushed over the cliff in a wheelchair. Seriously? Of course not.
Cut, Cap and Balance was a serious proposal to finally end the runaway spending in Washington, killed by the Democrats in the Senate and Obama threatened to veto it even if it had passed.
Our members of Congress are not taking this seriously – why not? Probably because a large portion of Americans aren’t paying attention and both Republican and Democrat politicians know it. These are the moderates in America. They don’t closely follow the news, but show up at the polls after having read an article or two the weekend before. There may be no way to get those voters to pay attention other than by letting August 2nd happen without a deal.
The media isn’t taking things seriously either. They are using the same scare tactics as the Democrats. Throwing “default” and “credit rating downgrade” around as if those things aren’t going to happen within a few years one way or another. Why isn’t the main stream media revealing the truth about what August 2nd would really bring if no deal is reached?
First, on August 2nd, there will be no default – none. Not one t-bill will have its yields unpaid. In fact, the Constitution requires that Congress pay those obligations and we will have more than enough in regular revenues to service that debt for the next few years.
There is also enough revenue to pay the troops, send out Social Security checks and take care of Medicare beneficiaries. These, however, are choices that the Obama administration can make. The President could order the Treasury to pay government union employees before funding Social Security or Medicare. Only the President could decide not to pay seniors while funding one of his own priorities and he has levied a veiled threat at our retirees stating that he might just do that.
If our credit rating were to drop to AA+ from AAA, there would not be a worldwide scramble to dump U.S.-backed securities. AA+ would be on-par with other high-quality investments and would still be one of the safest in the marketplace. It is unlikely that an auction would fail or that an interest rate increase (and price drop) would be required to keep investors buying the nation’s debt.
Since Harry Reid and his band of miscreants have said NO to every single viable attempt to cut our deficits and balance the budget, the debt ceiling will do it for them. If no deal is reached, on August 2nd Congress will no longer have the authority to issue more debt. They will have to service the interest on existing debt, pay our troops, issue social security checks, pay Medicare claims and not much else until they can come to agreement on how to fix the mess that they have gotten us into. They will finally have to take the national debt seriously.