The Facts Beneath The Noise

It’s time for both parties to threaten the American people with doom and gloom–the debt ceiling has been reached, and Washington wants more of our money. The President is saying that Social Security, the military and the veterans won’t be paid (notice he never says that he and Congress won’t get paid), and the Republicans say they are not raising the debt ceiling until someone shows some fiscal restraint. Good luck with that.

Heritage.org posted an article this morning that does actually shed a little light on what is actually at stake underneath all the rhetoric.

The article at Heritage.org reminds us:

“Suggesting that the United States might default on its debt is factually wrong and shameful behavior on the President’s part,” Heritage’s J.D. Foster, the Norman B. Ture Senior Fellow in the Economics of Fiscal Policy, said yesterday.

The U.S. is not going to default on its interest payments, Foster said, and “this assurance rests not on congressional action to raise the debt ceiling, but on the simple fact that the Treasury has far more than enough funds to pay all interest as it comes due.”

The President stated that raising the debt ceiling was not an increase of spending but simply the paying money due from past spending. He compared the Republicans in Congress to someone who eats dinner and refuses to pay the check. Just for the record, the Republicans did not support much of the spending he is referring to. The excessive spending is due to the fact that the Senate has not passed a budget since 2009 and is using the bloated baseline of the 2009 Budget (when the Democrats controlled the House of Representatives) in continuing resolutions. Since the Senate has not passed a budget, there has been no serious Congressional debate on cutting spending since 2009. The President is essentially asking the Republicans to pay for the Democrats dinner!

At any rate, default is not an issue–it is a red herring. I suspect that if the President and Congress were not going to get paid until a deal was worked out, we would have a deal rather quickly. Stay tuned. It might not be a bad idea to get out the popcorn!Enhanced by Zemanta