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Friday, July 29, 2011

The Big, Fat Default LIE

For the past few weeks of debate over the U.S. federal debt ceiling, politicians in both parties and journalists of every political stripe and color have doggedly persisted in referring to "not raising the debt ceiling" as a "default." If the GOP's "radical" contingent were worth their salt, they would stop to correct every interviewer every single time they made this false equivocation by saying:

"Excuse me, I am not proposing that the U.S. default on its debt, and by referring to not raising the debt ceiling as a 'default' you are either confused yourself, or you are deliberately misleading your viewers."

That such a blatant error has continued on such a massive scale, unabated and with such little protest by the alleged opponents of America's disastrous fiscal status quo, is a damning indictment of the quality (and integrity) of the American media establishment, the sincerity of its politicians, and the intelligence of its voting populace. The perpetuation on this magnitude of such a misnomer can be interpreted as nothing less than a deliberate conspiracy by the political ruling class and its complicit media lapdogs to deceive, confuse, and frighten the American electorate.

A default is a financial term that denotes a debtor's inability to repay their debts. Raising the debt ceiling would mean allowing the federal government to incur more debts by borrowing more money. Not raising the debt ceiling would mean not allowing the government to incur more debt. Whether or not Congress allows the government to borrow more money has nothing to do with its ability to pay the debts it already has, and if the government is already in default and unable to pay its debts, allowing it to incur more debts will obviously not help the government out of default.

But even in a more narrow sense, if by "default" politicians and journalists simply mean that without more loans from the Federal Reserve, the government will be unable to pay its obligations such as interest on its existing debt, Social Security checks (as Obama suggested in a recent fit of fearmongering), and the continued operation of the military, they are still either blatantly mistaken or brazenly lying. As Senator Rand Paul (R-KY) has stated for months now:

"Our interest payment is about $20 billion a month. Our tax revenue is about $200 billion a month, so we're bringing in (nearly) $200 billion. We've got plenty of money to pay our interest."

The bottom line is that if Congress does not raise the debt limit, the Treasury will still have enough revenue each month to service interest on the debt, maintain the country's military, and cut Social Security checks. Those items will not have to be cut, but maybe for once, Washington will have to prioritize spending and be forced like the rest of us have been in the last five years, to cut out wasteful spending and non-essentials. There is no way that 100% of the federal budget is absolutely essential spending, because just ten years ago, the budget was significantly smaller and the sky wasn't crashing down all around us.

In fact, the way Democrats talk these days, the 90s were awesome. How about instead of raising the debt ceiling, we lower it along with spending to 90s levels? Get things back to the way they were under Clinton? That's not a compromise, that's going back to every Democrat's favorite recent president.

Then we can all party like it's 1999.

Wes Messamore,
Editor in Chief, THL
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