Monday, January 14, 2013

Government Default not GOP Fault - nor is it Necessary

If you didn't know any better, you would believe that House Republicans have the power to force the U.S. to default on its obligations.

That is absolutely untrue and misleading. But that didn't stop the Democrats' spin.

In a press conference on January 14, 2013, President Obama sounded the alarm:  Republicans should allow the President to automatically raise the debt ceiling or, at the very least, they should approve a debt ceiling increase, pronto.

In an absurd example of scare-mongering, POTUS warned that, "Specialists who track loose nuclear material will not receive paychecks," if Republicans do not agree to a debt ceiling increase. In other words, Republicans are going to get us all nuked.

Here is where we need Republican leaders (anyone, anyone?) to explain the truth: There can be no federal government default unless the Treasury chooses to default. There is plenty of revenue coming into the Treasury to pay all interest as it comes due.

Congress need not act in order for the Treasury to pay all interest that is due. Revenue will continue to flow into the Treasury regardless of whether Congress authorizes more debt. Suggestions to the contrary are irresponsible and totally untrue.

To stop the bleeding, it may be desirable for Republicans in the House to block more spending. If government is limited, then spending will necessarily be limited, too. That would be a good thing. 

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