Patterico's Pontifications

5/12/2011

We Can Stand Firm on the Debt Ceiling Without Causing a Default

Filed under: General — Patterico @ 9:46 pm



Ace:

GAO: Yes, We Stand By Our Prior Ruling That, To Avoid a Default, the Government May Prioritize Interest Payments on Debt Over Current Government Spending

This is what the GOP keeps saying– that if the debt ceiling is not raised, it does not mean a default, because the government will have plenty of money coming in. Just not enough to pay interest on old debt and maintain current spending.

So, if we don’t raise the debt ceiling, it just forces the government to cut spending.

Of course Obama could also choose to not cut spending, and just default. But that would be his choice. He cannot say he was forced to do that, or the GOP demanded he do that.

There’s really just no excuse to raise the debt ceiling. And if Ace is right, the deadline is upon us, as early as Monday.

Take a stand for once, Republicans.

Ah, who am I kidding?

20 Responses to “We Can Stand Firm on the Debt Ceiling Without Causing a Default”

  1. Ace is correct; this story appeared on the zerohedge website approximately a week ago as well.

    Still, that doesn’t necessarily mean there will be no repurcussions in the stock and bond markets to this particular Rubicon being crossed.

    And unfortunately, once Obama begins his usual and customary demagogic lies, and aided by the MSM, that’s probably when Boehner&Co will fold like crummy poker player always do.

    Because really, they should “stand pat” instead, and everytime the press asks them about the situation, begin each answer with this tryptic of pronouncements as preface to their actual answer:

    1) The Democrats could have raised the limit before the last election, when they had a lock on all 3 branches of government.

    2) Remind that it really can’t be that bad for this occurance to come to pass, since some of the most reponsible Democrats in Congress currently, like Mr. Durbin and Schumer, as well as President Obama himself has voted against raising the debt ceiling.

    3) This could all come to a swift end if Messers Obama and Reid would agree to serious reductions in the baseline of the budget or Mr. Toomey or Ryan’s spending plan. But regardless, the US will meet it’s obligations to their bondholders.

    Do like Ronnie Reagan, and talk past the MSM to the people. We in the blogosphere can help facilitate that as well.

    Bob Reed (5f2db5)

  2. Still, that doesn’t necessarily mean there will be no repurcussions in the stock and bond markets to this particular Rubicon being crossed.

    Bigger repercussions are in the offing if we never do anything.

    I know you agree with me about that. Just think it needs to be said out loud.

    Patterico (c218bd)

  3. I feel as though the democrats played the GOP for fools with the recent budget. The GOP fell short of a laughably small $100 billion ‘cut’ (from the proposed increase). That’s demoralizing.

    The GOP made a ‘read my lips’ level promise, and I think our political opponents take these promises as objectives they need to ruin by any means necessary.

    The GOP can overcome this with a little backbone on the 2012 budget and the debt ceiling. Yes, at some point, we have to actually mean it when we say ‘enough’, and that point will come with massive dishonesty and pressure from the MSM/democrat party.

    They should draw that line at this debt ceiling. All the democrats have is this (ancillary) ‘we oppose spending in the tax code’ distortion. They can’t beat a ‘the debt is too damn high’ party. It is a simple, accurate notion that the public will absorb as leadership, if given a chance.

    If the GOP shows it is unable to lead on this issue, then I think the party itself will become an endangered species.

    Dustin (c16eca)

  4. Just yesterday, GOP Leadership said there won’t even be a budget for FY 2012 and that some form of a CR will happen.

    Yeah. I can totally see them forcing the issue on the debt next week.

    Qdaffy is a dead man as soon as our president needs a deflection from our fiscal reality.

    Ed from SFV (4a7c52)

  5. The tough part, Dustin, is that if the Republicans self-destruct, or lose the middle, we get four more years of BHO.

    Now, I know some people who appear to have the attitude that we need to burn down the country in order to build it back up the “correct” way.

    I sure hope not.

    But in the final analysis, it is up to the Republicans to stand up or not. I think they spend too much time in Washington, myself.

    Simon Jester (2c8f39)

  6. The tough part, Dustin, is that if the Republicans self-destruct, or lose the middle, we get four more years of BHO.

    Yep, and it’s hard for me to believe that the GOP keeps the middle if we have a default or shutdown or other contrived crisis. Yeah, I’d blame Obama too, but would the middle? These are the morons who elected Obama in the first place. They watch ABC news and actually find it compelling and reputable.

    If we had the electorate that saw through the BS, we wouldn’t be in this position in the first place.

    Anyway, we have to have faith that if we simply say the debt is too damn high, and Obama has to choose between making our debts or keeping spending ramped way up, that the voters will eventually consider that argument long enough to realize it’s the truth. We have to hope that Obama’s retort that he wants to cut spending like mad, but he means ‘spending in the tax code’ is also considered long enough, and discussed clearly enough, that people understand what is being said.

    It seems like a major error to have cooperated with the 2011 budget, which is so high it is an existential threat to our nation. I know many say this was a smart move, but now the GOP has a mixed record instead of a clear one. The narrative is much harder to convey to the voters. Many have little confidence the GOP will balance the budget. Was all that worth a shutdown? Yes, if those things are necessary for the GOP to continue winning elections.

    Perhaps the solution is to primary every single GOP incumbent with a tea partier promising a few key votes.

    Dustin (c16eca)

  7. Comment by Simon Jester — 5/12/2011 @ 10:46 pm

    No, a folding on the deficit/debt by the GOP will not result in four more years of BHO.
    It might result in his re-election.
    But, if current economic trends continue, an “Arab Spring” will bloom here too, and the govt WILL fall.
    The only question is who will be the person who picks up the pieces of a broken Presidency.

    Regime change:
    It’s not just a Middle-East street faire!

    AD-RtR/OS! (166457)

  8. #5 Simon Jester: I think you’re a little late in your analysis. This country burned to the ground years ago, we’ve been living in the ruins for ages already.

    You mean to tell me you haven’t noticed?

    Para espanol, marque 2.

    d. in c. (ac417f)

  9. Take a stand for once, Republicans.

    Shall I go stand at the steps of the Capitol Building and yell that?

    Scott Jacobs (dbfc1e)

  10. The choice is between intense pain now and excruciating, unbearable pain later. I think the best choice is to…oh! Look! American Idol!

    (We’re doomed.)

    navyvet (db5856)

  11. The left are hypocrites……………..They have ties to millionaires but decry them every chance they get.

    DohBiden (15aa57)

  12. We can count on the GOP to take a strong stand. The leadership will get together for a televised press conference and they’ll all politely take turns at the microphone mouthing focus-group tested platitudes, each one outdoing the other with solemn pronouncements of principled conviction and unassailable oaths of everlasting solidarity, all delivered deadpan with well practiced facial expressions conveying utmost sincerity. It’ll make us all so very proud.

    Then they’ll send out urgent requests for campaign contributions right before they break and run for cover like cockroaches when the lights come on, like they always do. It’s instinctual.

    ropelight (ac959c)

  13. Shhh. Your exposing the difference between maxing out on a credit card and not paying the credit card. The liberals, who are trying to create another crisis to exploit, are hoping that the American people can’t understand the difference.

    Also, it important to keep quiet about the many cases where Congress took their time (two or three months) about raising the debt limit. If this got out, it would also ruin the “crisis” nature. Veronique de Rugy keeps pointing this out (e.g., see here or here). She is being very naughty. Please simply ignore her.

    (Tongue now removed from cheek.)

    ConMan (57505c)

  14. No sense even having a debt limit, if every time you get near it you raise it.

    Loren (998d8f)

  15. The problem is that it’s not just interest payments. It’s also other payments due. If I “prioritize” paying interest on my business loans, but don’t make payroll, you can say that’s not default, but my employees did work and are owed their money. Sure I can tell them I’m “cutting spending.” Like I can tell the electric company I’m “cutting spending” by not paying my bills. But that payment is still due, “cut” or not.

    What makes cutting spending in order to affect the debt ceiling difficult is that it is about payments due. So it’s about things we’ve already decided to spend, and in some sense, things that people have already delivered on. Like my example with the employees above.

    The other problem is that the spending that is defaulted on is totally within the control of the treasury — they’re deciding which accounts payable to pay and which not to. Not sure this is the stand republicans want to take.

    Bruuuuce (b12fab)

  16. Not sure I would let Bruuuuuce determine what is a good stand for Republicans to take.

    JD (194dc5)

  17. Immigration reform, forcing banks to make bad loans again and cutting oil company subsidies will solve all our problems.

    Plus taxing the rich. Never forget about taxing the rich.

    daleyrocks (bf33e9)

  18. We need more WTF from Obama and the Democrats.

    daleyrocks (bf33e9)

  19. Bigger repercussions are in the offing if we never do anything.

    I know you agree with me about that. Just think it needs to be said out loud.

    You’re correct Pat, both on it needing to be said aloud and my agreeing with you :)

    Thanks for rescuing my comment from the spam filter.

    My Regards

    Bob Reed (5f2db5)

  20. Democrats are trying to avoid any meaningful deficit reduction and their main tactic is cheap extortion.

    SPQR (26be8b)


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