Sunday, July 17, 2011

Fox News "7 Myths About the Looming Debt-Ceiling 'Disaster"'

Provides great insight into what Cantor et al are thinking. In particular, 'myth 1',
1) Not increasing the debt ceiling means the U.S. government will default on its debt. This is probably the biggest lie that almost all other claims arise from. Default occurs if the government stops paying interest on the money that it owes. Not increasing the debt ceiling only means that the government can't borrow more money and that spending is limited to the revenue the government brings in. And, with interest payments on the debt making up less than a ninth of revenue, there is no reason for any risk of insolvency.
This is true. The Federal Government does have income to pay our bills, just not all of them. First and foremost, Treasury will pay interest on the national debt, and after this obligation is satisfied the executive branch must decide and prioritize what other bills will be paid.

For Cantor and his fellow 'conservatives' this is a dream come true. They imagine that
Social Security and Medicare (both programs have their own income stream from separate payroll taxes) will be de-funded proving to the American people that those programs are not dependable and must be abandoned.

And our soldiers must be paid, and be supplied. Cantor et al know that this will take a lot of money and if there isn't enough, they presume that the voters will blame Obama.

And finally, what ever bills Obama chooses to pay and not pay will give the GOP plenty of ammunition going into the election. Obama is damned if he does, and damned if he doesn't.

The debt ceiling quagmire is simply the natural extension of the GOP strategy since Obama took office. Simply vote 'no' on everything to stymie his government and destroy his presidency. The 2010 election was seen as an affirmation of this strategy, and certainly Obama didn't appear to do anything to make the GOP pay a price for this strategy.

Below I wrote that that Cantor et al were simply waiting for Obama to cave to all their demands, passing the debt ceiling upon Obama's unconditional surrender, but that might be naive. It may be that House conservatives have no intention of making a deal, any deal.

(h/t @STLWasker)

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