63% of Americans Do Not Want Debt Ceiling Raised CBS News/New York Times

[Vel]

That is just rhetoric some overzealous politicians are throwing out there.
We will not default on our debt

I didn't realize Standard & Poor was a overzealous politician. After all, they weren't saying they were going to lower our credit rating to D or anything.

Here you go.

By Steven C. Johnson
NEW YORK | Mon Apr 18, 2011 6:20pm EDT
(Reuters) - Standard & Poor's threatened Monday to downgrade the United States' prized AAA credit rating unless the Obama administration and Congress find a way to slash the yawning federal budget deficit within two years.

S&P threatens to cut U.S. credit rating on deficit | Reuters

 

[Google]

Faced with the undeniable fact that a large majority of Americans are against raising the debt ceiling--rejecting the fear-mongering tactics that this administration has employed so well to achieve nearly all of its legislative successes—every leftist on this board quickly parrots the assertion that not raising the debt limit will inevitably cause the government to default on its debt.

This is like telling someone in debt with a maxed out credit card that they have to get more credit or they won’t be able to pay their bills. It’s logically flawed, and the numbers prove it is factually flawed.

On average the US government takes in $177 billion/month. It takes, again this an average, $19 billion/month to service the nation’s various debt obligations. So that means that if the debt ceiling isn’t raised the country can service the debt and have $158 billion left over.

This is a fact: the government’s monthly income dwarfs its debt obligations. The federal government could pay all interest on Treasury Bonds out of its monthly revenues and by doing so reduce the debt and lower us from the ceiling instead of breaking through it.

The problem becomes resoundingly clear when the federal government’s monthly expenditure, averaging $280 billion--not including servicing the debt—is taken into account. It is a fact that the government can service its debt. It would force the federal government to address and prioritize the budget, but making threats about social security is nothing more than fear-mongering that the left used to bemoan.

Obama is threatening the elderly that they will not have social security payments if the debt ceiling isn’t raised. This is a lie. Debt obligations are a small fraction of the monthly expenditure, which means so many things can be cut before SS or the debt would not be serviced. It is exploiting fear.

 

[Toro]

Google

It's not just interest payments. It's also paying off debt that comes due. We have at least $56 billion in interest and repayments plus four Tbill auctions between Aug 2 and 15. Money coming into the Treasury does not flow smoothly. We could default on payment dates alone.

The other thing is basic math. As any Econ 101 student knows GDP = C+I+G+NX. G includes deficit spending. The deficit is 10% of GDP. That immediately goes away once the debt ceiling is reached. The economy will begin to contract at a 10% rate, twice the level of the deepest contraction during the Financial Crisis. That's not scare-mongering. That's simple math.

 

[Modbert]

Here you go.

By Steven C. Johnson
NEW YORK | Mon Apr 18, 2011 6:20pm EDT
(Reuters) - Standard & Poor's threatened Monday to downgrade the United States' prized AAA credit rating unless the Obama administration and Congress find a way to slash the yawning federal budget deficit within two years.

S&P threatens to cut U.S. credit rating on deficit | Reuters

I must have missed in the article where S&P said they would lower our credit rating to a D unless we slash our deficit. I also must have missed where I advocated that we don't need to cut spending whatsoever.

Perhaps you can point me to both places?