The Potemkin Limit
By Mitch Berg
When your liberal friends, or even your less-informed Republican friends start yapping about the imperative to hike the debt limit, have them read this. It’s John Hinderaker, and it points out that the government doesn’t constitutionally have the option to default:
So what will actually happen if Congress doesn’t increase the debt ceiling by approximately October 17? The government’s debt obligations will be paid, but reductions in other spending will start to become necessary. In effect, leaving the debt ceiling as is would function as a spending cut. This is why the Democrats hate the idea so much. They know there is zero chance of default, but they are horrified at the prospect that voters and taxpayers may find out that there is a relatively simple way to bring about spending reductions that would create, in effect, a balanced budget. Hence the hysteria.
And hence the ratcheting rhetoric.
Look for a racial angle any day now.
October 8th, 2013 at 4:24 pm
An inconvenient truth, not to be shared with low information voters.
October 8th, 2013 at 5:52 pm
The real issue then is whether John Boehner and Eric Cantor will let the US default. It really does come down to their grasping for victory and what they are willing to risk – and incur – in that pursuit.
October 8th, 2013 at 8:15 pm
The real issue then is whether John Boehner and Eric Cantor will let the US default.
That’s a dem talking point. Boehner and Cantor do not control the treasury. Jack Lew, not Boehner and Cantor, will determine if the US defaults.
October 8th, 2013 at 9:01 pm
Randy Barnett at Volokh says the ACA is unconstitutional because, as a tax, it had to originate in the House (it originated in the Senate).
http://www.volokh.com/2012/09/13/new-obamacare-challenge-the-origination-clause/
Sounds like it’s time to fight it out in court. I always thought the media and Dems didn’t consider Robert’s finding of ACA legal as a tax (rather than the Commerce clause) as deeply as they should have.
Good thing we got a smart-as-a-whip, constitutional perfesser in the White House!
Was that racist?
October 8th, 2013 at 9:41 pm
Eliminate the debt ceiling. The debt ceiling is a joke. It serves no purpose except political posturing. It is not about the deficit – it is about paying the bills, and the U.S. will pay the bills.
October 8th, 2013 at 10:03 pm
BTW- if Obama keeps this up, no way he’s re-elected in 2016. I’d bet my life on it.
October 9th, 2013 at 1:21 am
Can somebody answer this question. I have an income of $45,000 a year and debts of $60,000 and I’m considered a bad credit risk. So how come the US government which you can say has a yearly income of $30,000 a year and debt of $170,000 is considered a very good credit risk?
Walter Hanson
Minneapolis, MN
October 9th, 2013 at 5:08 am
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October 9th, 2013 at 6:40 am
You may find it illuminating to become acquainted with the inflationary problems of Zimbabwe when they followed a policy similar to the one you suggest.
October 9th, 2013 at 8:12 am
Boehner and Cantor LET us default? That’s like saying it’s my boss’s fault I didn’t pay my rent. After all, I demanded a raise and he didn’t pay it! And I shouldn’t have to scale down to basic cable just because he’s greedy. So he’s a big poop and nothing is my fault so the landlord shouldn’t evict me.
There is plenty of money – even with the shutdown – to pay our actual debt obligations. There’s just not enough money to pay the debts plus every luxury. Defaulting on the national debt is like paying the cable bill instead of the rent. And that choice lies solely with President Barak Obama.
.
October 9th, 2013 at 9:27 am
Apparently, EmeryTheUSAHater’s talking points clouded mind missed the fine print – there is zero chance of default. But then reading and comprehension is not a libturd strong point.
October 9th, 2013 at 1:55 pm
It’s not so much there’s a zero chance of a default its what will happen when we hit the limit, sure our debts will still be paid, but those on SSI or SS won’t get checks. And Obama wants that to happen, don’t worry we’ve already got a special place in hell picked out for him
October 9th, 2013 at 8:17 pm
Republicans are not arguing that a debt default would not be terrible. They are arguing that a failure to raise the debt ceiling would not be so terrible. Two different things.
The federal government receives 8-10x the amount of cash needed from taxes and other revenues to make all scheduled interest and principal payments on all existing federal debt. The Treasury would then have to prioritize payment of other obligations with the remainder of the cash flow. Much as the federal government is now prioritizing its activities into “essential” and “non-essential” services during the shutdown.
There is debate as to how immediately disruptive this would be – perhaps very disruptive. But this is different from default on a bond. The bond markets are relatively calm because bond holders know they will be paid in full and on time.
October 9th, 2013 at 9:45 pm
This is not what jack Lew is saying:
Some claim that the United States does not need to meet every one of its commitments. They argue that the government could pay certain bills and let others go unpaid without consequences.
http://www.usatoday.com/story/opinion/2013/10/03/jack-lew-debt-limit-government-shutdown-obama-column/2918587/
Jack Lew sez the only choice is between people who say that triaging payments will have no consequences at all, and people like Jack Lew who know that it will mean letting old people and children starve.
Jack Lew, of course, would be the person doing the triaging. Love that Chicago style governance!
October 9th, 2013 at 10:02 pm
You don’t know what’s going to happen if you drive off a cliff, but you can presume it’s not going to be good.
October 10th, 2013 at 8:10 am
I think you are missing the point, Emery. Allow me to simplify.
Republicans say they won’t raise the debt ceiling, but the results won’t be so bad. Triaging payments will force spending cuts that will do little harm and some good. They won’t back down.
Obama (and his minions) say that not raising the debt ceiling will result in armies of starving widows and orphans, and the collapse of the social safety net. Default is possible and would destroy the world economy.
Obama won’t back down.
Who is nuttier?
October 10th, 2013 at 5:08 pm
Tea Party.
“Don’t Vote: It Just Encourages the Bastards’
P. J. O’Rourke,