The default lie

The following statement is a gross distortion of the truth touted by President Obama, the Democrat-controlled Senate and their lap dog media: “On October 17th the sky will fall, our country will economically implode due to a default caused by Republicans.”

What nonsense.

Most authorities will limit the use of “default” to mean a failure to abide by the terms of bonds or other debt instruments. There is always revenue coming into the U.S. Treasury, certainly enough to pay interest.

In round numbers, the Treasury takes in $300 billion in tax revenues monthly. Again, in round numbers, the monthly interest to our debtors is around $30 billion.

There is an Office of Management and Budget directive from the 1980s, the last time we got fairly close to not raising the debt ceiling, which clearly lays out the process by which the Treasury secretary prioritizes interest payments.

So, the only thing that technically can throw our country into default is missing an interest payment. There is clearly enough “cash flow” from tax revenue to cover this. If a decision is made to not pay this interest it will be a deliberate decision on the part of the administration to default.

The responsibility will rest squarely on the president.

So, you may ask what about Social Security and Medicare payments? The monthly outlay for Social Security averages around $64 billion and $45 billion for Medicare. Those will be paid, as well.

After $30 billion is paid on interest, we have $270 billion. Take away the aforementioned obligations on Social Security and Medicare and we are left with a balance of $161 billion of monthly tax revenue.

What about defense? Our monthly budgeted outlay for defense averages $56 billion. That leaves us with $105 billion each month to cover the, more or less, non-essentials. What about all of the other government agencies?

The administration would then have to make the same kind of tough priority spending decisions that average Americans do with their own budgets. The government needs to trim the wasteful spending instead of increasing the debt limit to borrow from China. We are stealing from future generations in order to satisfy the political whims of career politicians.

In conclusion, President Obama and the Senate Majority Leader, Harry Reid, know full well that we will not “default.”

What we are witnessing is a gross mischaracterization of the truth (some might say they are lying) to the American public. Fear mongering is the name of the game with the petulant goal of demonizing the opposing political party. It demonstrates a total lack of leadership by this president and his ruling political elite in Washington.

Steve Halloran

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