Not raising our debt ceiling does not mean that our credit was in jeopardy.
Every time we have a government shut down the other side of each party uses that so that they can get the people on board with their issue that lead to the shut down. It's a common scare tactic that been used every single time our government has been shut down with the threat of not raising the debt ceiling.
We have enough monthly revenue (taxes) that come in to pay for our monthly credit card owed to our foreign creditors. This is the important one to always pay each month. This is the one that would violate our Constitution on the Full Faith and Credit. We must always pay on our monthly credit card, so to speak.
Then there is enough left to pick and choose which other government programs will be paid.
The Federal Reserve Bank automatically pays for the bigger ones, like Social Security, Medicare, Medicaid, and defense expenses. Until both sides come to some kind of agreement.
The Democrats and Republicans have used this scare tactic whenever the debt ceiling has come up.
Example-
In the end, the president accepted the debt ceiling deal forced on him by the Congress (which was Democratic), bitterly swallowing the policy changes packaged with it. "To play around with the debt limit this way means really that you're playing with dynamite," his treasury secretary said on a "Today" show appearance, adding, "There is a gun at [the president's] head, if you will." The president himself complained "the choice is for the United States to default on its debts for the first time … or to accept a bill that has been cluttered up. This is just another example of Congress trying to force my hand."
The president was Ronald Reagan; the treasury secretary was James Baker, and the year was 1987.
This has to be resolved and our Government must cut back on it's size.
This means getting rid of some Departments and Government employees and the Dem's refuse to deal with this problem and have fought it for the last 40 years.
The Democrats have refused to do this off and on ever since the 1970's.
This last one President Obama used the default on government bondholders as the scare tactic.
President Obama acknowledged Tuesday that the White House and Treasury Department are planning for "all contingencies" if Congress doesn't raise the debt ceiling in time.
But the contingencies won't be silver bullets.
Are you better off?
"No option is good in that scenario," Obama said at a news conference. "There's no magic wand that allows us to wish away the chaos that could result if, for the first time in our history, we don't pay our bills on time." The expectation is that Treasury will do what it can to prioritize payments to bondholders to calm markets. But there's no guarantee markets will be sanguine if investors keep getting paid but many segments in the U.S. economy are put on hold.
And Obama again dismissed the oft-made suggestion that he could invoke the 14th Amendment of the U.S. Constitution, which says: "The validity of the public debt of the United States, authorized by law ... shall not be questioned."
In that scenario, he would direct Treasury Secretary Jack Lew to keep borrowing to pay the country's obligations even if Congress doesn't authorize an increase in the legal borrowing limit.
What happens when Government bondholders do not get paid?
What happens if a state or local government defaults on a bond? If the experiences of Jefferson County, Alabama are any indication, not a lot. Jefferson County defaulted on $3.2 billion in sewer bonds in 2008. Nothing happened. There was talk of possible bankruptcy, but it really never got past the initial-discussion stage. It wasn’t until this year, over two years after the initial default, that a US District Court appointed a receiver to manage the sewer system for its many constituents (sewer system clients, bondholders, et al).
So far as the bondholders are concerned, the receiver has very little ability to improve their recovery prospects. He can’t raise rates too much–Jefferson County’s residents already pay some of the highest rates in the country. He could, but said he won’t, impose non-user fees on the poor saps in the county that are not connected to the sewer, but still will undoubtedly be forced in some way to pay for its mismanagement.
So, what to do? Effectively nothing. Just wallow along in the muck (pun sort of intended) until the bondholders get paid what can be paid. Some efficiencies in operation ought be available, considering the sewer system is no longer used to fund the lavish lifestyles of the County Commission and its multitude of indicted and convicted Commissioners and contractors. But other than that, it’s a haircut.
This is what the Dem's are protecting, their Government bondholders and workers not us the people.
The Tea Party was trying to force our Government to cut back on spending that the Dems have been fighting.
It must be dealt with and to continue to raise the debt ceiling and not doing any real cuts, is what will really do harm to this country if our government spending is not brought under control.
When the Tea Party was elected in 2010 they have been trying to get our debt under control and have been vilified and lied about ever since they were elected.
The Tea Party is for the people and our Government, not like the career politicians in both parties who are for the government by the government wanting to protect the status quo of government workers, government bondholders and government departments.
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