There has been so much news lately by the media about the budget C.R., the government shutdown, and the debt ceiling that the average American can easily lose sight of the real issue, which is the federal debt. Even certain honest, trusted members of the media trot out “default” as though it were synonymous with not raising the debt ceiling by Oct. 17. Obama and the democrats are also hoping for a default. Both Obama and the democrats have not even review the proposals that the House has sent over. Heck, a good example of how Obama and Reid are rooting for a default is how without seeing today’s proposal, they turned it down!
My guess is that Obama and the democrats really do not know what a default really is – default is not paying the interest/principle on what one has borrowed. Current federal revenue, estimated to be $230 billion, is way more than enough to easily pay what we owe on federal notes, bills, and bonds – $20 billion.
If, as told above, the feds do indeed have enough revenue pouring in to meet their obligations, then actual default would be an act of volition, a decision by the Obama. Obama would then have to decide to squander the full faith and credit of the nation. Such an action would be an impeachable offense. However, not likely with Reid in charge (heck, he even has control over Obama!)! Another reason to flip the senate!
Obama brags that the deficit has been cut in half. Well, Obama is right! However, that’s only because it’s come down from astronomical high levels from the prior years of Obama. Although, the debt has fallen, the deficit for fiscal 2013 is still far higher than any pre Obama deficit. In fact, since the Democrats took over Congress in Jan. 2007 (Last 2 years that Bush was President), the deficits are by far the largest in history.
The 2 big reasons for the smaller deficit for the fiscal year that just ended (2012) are tax hikes and spending cuts. Especially, the income tax rate hikes on the wealthy, the end of the payroll tax holiday, and sequestration. However, now we learn that the democrats want to end sequestration and increase spending (another add on to the debt ceiling demands). If the sequestration is done away with, the deficit would be that much worse next year. Especially, with the rollout of ObamaCare.
In ten years, the national debt is forecast to hit $24T. In addition, we have artificially low interest rates today. The interest rates are expected to be averaging in future years at least 4.5%. Of course, the young people who have championed Obama are economic illiterates since the future payments that are forecasted will be made by those same young voters! . (Look carefully at that second graph, kids — that’s your future.)!
Just remember, the reason that the democrats and the media are throwing the word “default” around is because they want to raise the debt ceiling high enough to get them beyond the 2014 elections. Obama and the democrats are just trying to put the fear of God into the American people so they can get everything they want. And they are not willing to make any substantive spending cuts. It is time NOW to try to fix the problems even if it hurts!
I’m against raising the debt ceiling, but if we must, then raise the debt ceiling to get us through three more months, during which time we finally address spending, especially entitlements. If Obama and the democrats do not agree to that, then raise the debt ceiling for a month, or even a week only!
Finally, in my opinion, the democrats cannot be trusted with our money (A good example is when they controlled both government Houses from 2007 to 2010). Many can see that Obama cannot prioritize government programs and both Obama and the democrats have been shown that they cannot prioritize money expenses; every program is necessary, every employee essential (yet over 800,000 government employees are non essential per the government shutdown. And Pelosi had the nerve to say “There are no more cuts to make.”
ECONOMIC NOTE: The public debt is the debt we should be worried about. The public debt is the debt we owe China and others. The public debt, which is the real debt, the hard debt, the debt involved with default, grew by a factor of 2.358. Thus, over the last six years, the real debt grew on average 27+ % faster than the debt displayed on those alarming national debt clocks you see on TV!