Cut it or Shut it: Default Is Not Imminent

Discussion in 'Politics' started by Google, Jul 14, 2011.

  1. Google

    Google Gold Member

    Apr 26, 2011
    Thanks Received:
    Trophy Points:
    I’d like to first begin this thread with two facts: 1) The Annual US Federal Government Revenue (2011) $2,173.7 Billion [Source:] 2) Amount of Service Annual US Government Debt Obligation $240 billion [source . $240 billion out of $2,173 billion to service the debt; if any liberal on here is going to explain why default is unavoidable let’s start with this, because not one leftist has disputed this fact.

    Every time I have corrected some leftist on this board that the US Federal Government will not automatically default if the debt limit isn’t increased by $2 trillion dollars they respond in typical fashion: insults. Here is a perfect example of the typical response, and I’m sure there will be plenty on this thread too:

    “if you have to ask why not raising the debt ceiling will cause a default, then you know nothing about what the debt celing is and/or what a default is.

    Why don't you lay off of politics and go watch Oprah or American idol or something. They seem to be more on your level.” Richard-T (in his defense he is smoking weed in his profile picture so he is a pothead)

    Not one person on this board has explained why default is an unavoidable consequence of not allowing the federal government to rack up record deficit spending, but they say it like it’s the word of God—well to them it is I guess it is. All records concerning deficit spending have been broken under this administration—last March was the record deficit in one month--and every time Obama proposes these spending initiatives we are told it is because we are in a crisis and we must do this or else, and those fear-mongering tactics aren’t working this time with all polls showing 50% and above against raising the debt ceiling. The American people have become desensitized to Obama’s constant cries of crisis.

    So here is the key question here: Can the Treasury service its debt obligation 10 times over from its current revenue? YES, and the possibility of not being able to pay the debt is ZERO.

    Not raising the debt ceiling also would not cause the unavoidable shut down of Social Security payments which Obama has threatened—a threat that has been refuted and shown to be blatant fear-mongering. There would be a drop of around 44% in current government spending. That drastic drop is because that percentage is indicative of the difference in government revenues, which is expected to be $300 billion in August. $300 billion more spend that taken in, so if that is cut it is 44%, in other words the federal government is spending 44% over the budget.

    Here is a great report released by the Bipartisan Policy Center (BPC) that is incredibly informative:

    “The BPC study found that the United States is likely to hit the debt limit sometime between August 2 and August 9. “It’s a 44 percent overnight cut in federal spending” if Congress hits the debt limit, [BPC's Jay] Powell said. The BPC study projects there will be $172 billion in federal revenues in August and $307 billion in authorized expenditures. That means there’s enough money to pay for, say, interest on the debt ($29 billion), Social Security ($49.2 billion), Medicare and Medicaid ($50 billion), active duty troop pay ($2.9 billion), veterans affairs programs ($2.9 billion).
    That leaves you with about $39 billion to fund (or not fund) the following:

    Defense vendors ($31.7 billion)

    IRS refunds ($3.9 billion)

    Food stamps and welfare ($9.3 billion)

    Unemployment insurance benefits ($12.8 billion)

    Department of Education ($20.2 billion)

    Housing and Urban Development ($6.7 billion)

    Other spending, such as Departments of Justice, Labor, Commerce, EPA, HHS ($73.6 billion)

    The decision to prioritize payments would fall on the Treasury department, and Powell points out it would be chaotic picking and choosing who gets paid (in full or partially) and who doesn’t…” ( Ceiling Analysis FINAL_0.pdf)

    All I want is an intelligent response from a liberal as to why default is unavoidable. I have offered a short explanation as to why it won’t.
    Last edited: Jul 14, 2011

Share This Page