I was reading a current NY Times article and it made a statement on a quote from Timothy Geithner that represents a position from the majority of Democrat/Liberal/Progressive supports. Here is that statement:
“A failure to increase the limit in time would force the Treasury to default on legal obligations and payments to bondholders here and abroad “causing catastrophic damage to the economy,” Mr. Geithner said, threatening the dollar and stopping payments for a range of federal benefits, including military salaries, Social Security and Medicare.”
Lets address the first part of this statement, “A failure to increase the limit in time would force the Treasury to default on legal obligations and payments to bondholders here and abroad”, why? All the debt ceiling does is restrict the governments ability to barrow more funds. So why does that mean we will have to default on legal obligations?
This is a political ploy to scare the American people in to allowing the federal government to print more money and barrow more from foreign governments. If we tell them that they must operate under the debt ceiling, and they must pay all out standing debt interest payments as scheduled, then where is the danger of “catastrophic damage to the economy”?
Yes, the federal government would then have to cut spending somewhere to make sure our bills are paid, now they start with scare tactic number two: “stopping payments for a range of federal benefits, including military salaries, Social Security and Medicare.” This is a lie. Instead they could cut benefits and salaries of non-essential public servants like congress and white house staff. We could lower the cost of the military without reducing our security by closing military bases in non-combat zones and station those soldiers within the borders of our country, this would reduce the upkeep cost and would let those servicemen to spend their pay in American cities which would add to those cities revenue.
There are solutions to problems that do not include creating more debt. We only need to force our representatives to represent us and not themselves. Don’t fall for the progressive scare tactics and make your voice heard.