Tea Prty/Rght Wng Repblcns Nt Straight On Dangr Of Nt Liftin Dbt Ceilin!

[JimofPennsylvan]

Tea Party and Right Wing Republicans are not being honest to the American people about the danger of not lifting the Nation's Debt Ceiling. They tell the American people that it would not lead to a default for America on repaying the money the country has already borrowed and therefore would not damage the full faith and credit reputation of America, a priceless asset. These Republicans tell the American people that America's current interest payments are around $200 billion dollars a year and America takes in over $2.0 trillion dollars a year so there will be plenty of money to run the American government the federal government just has to prioritize spending. Aside from the federal government expenses that are labeled low priority and thus won't get paid which these unpaid expenses will touch a lot of ordinary American's lives and will cause significant hardship aside from that major issue there is another issue that is being glossed over here. It is not only the interest payments on U.S. Treasury bonds that are important here it is the fact that hundreds of billion if not a trillion plus dollars worth of these bonds must be rolled over on a yearly basis that raises a critical problem. By this it is meant for example let's say a person purchased a million dollars worth of Treasury bonds that had a two year term and paid a half a percentage interest rate, it is true that the interest payment by the federal government would only be $5000.00 dollars per year but in two years time from when the bond was purchased the federal government will have to give that investor his or her one million dollars back which the federal government up to the current time does by selling another investor U.S. treasury bonds and uses the proceeds from that sale to pay the first investor. This rollover necessity in continually financing the national debt is the matter that these right wing republicans keep ignoring.


America's national debt limit is currently $14.3 trillion and America will run out of money to pay its bills by August 2nd and therefore need's the debt limit raised by that time to acquire the money to keep paying its bills. The real problem that America will run into come August 3rd if the nation's debt ceiling is not raised is not the interest payments but rather the repayment of principal to Treasury bond holders. Because not lifting the nation's debt ceiling will dramatically hurt the willingness of investors to buy these bonds, because prudent investors will be thinking this country has not raised its debt ceiling which has resulted in many of its creditors not getting paid it is foolish of me to buy the bonds of this country because it may result in me not getting paid some opportunistic populist bunch of politicians from this country could advocate to the public don't pay the country's bond creditors the money can better be used to pay creditors that provide beneficial social services and the country could follow that leadership and I would lose my money invested. It is the rejection by investors of Treasury T-bills, notes and bonds which is the real danger for America here in not lifting the nation's debt ceiling. This critically important subtlety of America not lifting its debt ceiling and it absolutely leading to a default on America repaying its bond creditors can really be clearly shown to be true when one reviews the public comments of first-rate economists that have spoken on the subject in the last week such as Ben Bernanke and Mark Zandi (from Moody's) when they speak on the subject they don't leave any room for there not being an unavoidable cause-effect relationship they say clearly the country must lift the nation's debt ceiling to avoid a default, there is no equivocation. These Right Wing Republicans with their talk that everything will be fine if we don't raise the debt ceiling there will be no default on the nation's debt is so false that if the nation doesn't end up raising the ceiling, history will not be kind to these Republicans history will consider the financial calamity that ensues, this Republican leadership with their false claims will go down in history as one of the greatest incidences of bad counsel a political faction has ever perpetrated on its people!