A conservative friend of mine posted this piece by Thomas Sowell on his Facebook wall. Check out this insanity.
Perhaps the biggest of the big lies is that the government will not be able to pay what it owes on the national debt, creating a danger of default. Tax money keeps coming into the Treasury during the shutdown, and it vastly exceeds the interest that has to be paid on the national debt.
Even if the debt ceiling is not lifted, that only means that government is not allowed to run up new debt. But that does not mean that it is unable to pay the interest on existing debt.
I've come to the conclusion that Jesus of the Right Wing Blogsphere is not as intelligent as I thought he was. Either that or he is just trying to play to his audience for dollars. He's certainly done that in the past. And I still can't figure out why he doesn't write "Liberals are stupid" for everyone of his books and columns. He certainly could save more time.
But if he does actually believe what he has written here, then he has officially gone full moonbat (as well as not understanding basic math). Raising the debt ceiling does not allow the federal government to spend more money. Congress authorizes how much money the government is allowed to spend and they have already done that. The debt ceiling only determines whether the U.S. government can borrow enough money to fulfill the spending obligations that Congress has already passed into law, like Medicare reimbursements or military pay not to mention unexpected crises that arise that may need funding.
He's not alone either. Politico has a piece up about the default deniers in Congress.
“Spending a day highlighting the debt and the deficit in Congress as part of raising the debt ceiling is probably a healthy thing,” said Tony Fratto, a consultant at Hamilton Place Strategies and a White House and Treasury official under President George W. Bush. “But the moment you start talking seriously about not raising the debt limit it becomes dangerous. And a lot of members of Congress are now saying things that give evidence that they have no idea what they are talking about when it comes to the debt limit and the way government financing works.”
The tax money the moonbats are talking about speak won't be enough to cover the daily expenses of the government. We already hit our debt limit last May and Treasury Secretary Jack Lew has been doing things like tapping exchange-rate funds to raise extra cash. A recent analysis by the Bipartisan Policy Center shows that the government will bring in roughly $222 billion and owe roughly $328 billion between Oct. 18 and Nov. 15, assuming the government is open, hence the date of October 17th and the threat of default.
Of course, none of this takes into account the uncertainty factor and how that will play with the image of the United States and interest rates. Sowell simply ignores this. The treasury will be in the position of having to choose which obligations to honor and which ones it won't. And the drastic spending cuts will have an extremely adverse effect on the economy, cutting growth massively. it would lead to another recession.
Whether they choose to believe it or not, a $175 billion dollar cut in government spending would take about 1 percent out of the economy. Stock markets would likely fall. Household wealth would shrink. Consumer confidence would plunge as Americans would cut back on spending. Higher rates on debt would raise borrowing costs, including mortgage rates. That's just the cut in spending, mind you, not an actual default which would add fuel to the flames.
The American Taliban doesn't really care about any of this and simply wants to burn the house down at this point. They want American to fail on Obama's watch. I guess Sowell is has now joined them.
5 comments:
What part of government spending is the only part mandated by the constitution?
You just can't get it through your thick skull that
A: Government is not a jobs program and as such arguing to to cut government because of 'what it will do to the economy' is just as stupid as arguing to have everybody employed by the government because 'it will create an economic boon'.
and
B: It's the spending, stupid.
Debt Limit
Dumbass liberal HS teacher calling PhD a "moonbat".
I love the irony.
Reality check: The United States has added two times more debt than wealth in the past two years
The amount of debt we incurred over the past two years was double the amount of wealth we added to our GDP; or, the rate at which our debt is growing is two times the rate at which our economy is growing — and Democrats’ only proffered solutions to this entirely unsustainable scenario are 1) increasing government spending and 2) raising taxes. Awesome.
Niall Ferguson: The Shutdown Is a Sideshow. Debt Is the Threat
Yet, entertaining as all this political drama may seem, the theater itself is indeed burning. For the fiscal position of the federal government is in fact much worse today than is commonly realized. As anyone can see who reads the most recent long-term budget outlook—published last month by the Congressional Budget Office, and almost entirely ignored by the media—the question is not if the United States will default but when and on which of its rapidly spiraling liabilities.
I guess Moody's is run by moonbats, too?
”We believe the government would continue to pay interest and principal on its debt even in the event that the debt limit is not raised, leaving its creditworthiness intact,” the memo says. “The debt limit restricts government expenditures to the amount of its incoming revenues; it does not prohibit the government from servicing its debt. There is no direct connection between the debt limit (actually the exhaustion of the Treasury’s extraordinary measures to raise funds) and a default."
Which is exactly what economist Thomas Sowell said.
The question then becomes: "Will Obama allow the U.S. to default?"
Of course, I fully expect the Republicans to blink first.
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