But since the debt ceiling fight will flare up again in 3 months, I want to declare my disgust over the recent Leftist lies, because it seems like they’re getting off scot free. I’m going to lift the toilet lid and show you the load of crap the Leftists defecated on America about a “government default.”
I personally feel the debt ceiling votes should be required at the beginning of each year, before any other legislation is voted on to spend any money. But that’s another topic.
Once the debt ceiling brinksmanship begins, only the LEFTISTS have ever taken the fight further by claiming that a government default will occur if the other side doesn’t back down.
That goes beyond political brinksmanship.
That is flat-out unlawful defiance of the Constitution.
Think I’ve gone rabid? Please withhold judgement a moment. I believe I can get you there, in 10 logical steps:
1. Financial definition of the word default. Per Wikipedia:
“In finance, default occurs when a debtor has not met his or her legal obligations according to the debt contract, e.g. has not made a scheduled payment, or has violated a loan covenant (condition) of the debt contract. A default is the failure to pay back a loan.”
The financial word default refers only to failing to make payments to lenders. To disguise their dishonest rhetoric, the Leftists are projecting a distorted interpretation of “default” to include any government inability to “pay its bills.” Not just the cost of servicing federal debt, but ANY federal spending requiring more debt.
2. The U.S. debt ceiling is like your credit card limit. If your borrowing limit is capped, it doesn’t mean you lose your credit card. It doesn’t mean you can’t spend any new money you made from other sources. It just means you can’t BORROW any more until you pay some back.
3. No one in government can legally claim that the public debt is to be ignored. As stipulated by this sentence in Section 4 of the 14th Amendment:
“The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
4. The government doesn’t need to raise the debt ceiling to redeem bonds that reach maturity. Principal can be returned to those bondholders by refinancing with new bonds, with no net change to the national debt. This happens all the time.
5. The government doesn’t need to raise the debt ceiling to afford interest payments on its debt. Federal tax revenues are about $288B per month. Payments to government debt holders are about $25B per month.
6. It’s in the government’s obvious best interest to prioritize interest payments as #1, before ANY other expense. The worldwide public’s confidence in the “full faith and credit of the USofA” must not be shaken.
Why? Our national debt is now over $17T which is 107% of the U.S annual GDP. America is leveraged to the hilt. Our financial house of cards only stands if interest rates remain low. Shaking the confidence of government bond investors with intimidating warnings of default is NOT the way to keep interest rates low. If rates rise significantly to continue attracting willing investors, America’s prosperity party will be over in a hurry.
7. The Republican-led U.S. House passed H.R. 807 in May 2013 to legally require the public debt to be the #1 priority. Called the Full Faith and Credit Act, this was consistent with the Constitution (see my Step 2) and with common sense (see my Step 6). It passed with a 221 to 207 vote in the House.
8. The U.S. Senate majority leader, Democrat Harry Reid, blocked H.R. 807 from even coming to the Senate floor. Reid called it the “Pay China First Act.” China holds just 8.4% of the U.S. public debt. By contrast, 66% of the U.S. public debt is held domestically, in America’s Social Security Trust Fund and quite probably your public or private pension fund, 401K, or IRA.
Why didn’t Reid call it the “Pay America’s Current and Future Retirees First Act” ? Because that would have been the truth, and he’s not much into that. Instead he sent HR807 to the Senate Finance Committee to be buried.
9. By even saying the government is at risk of an unprecedented default, the Leftists call the validity of the debt into question. They threaten default despite the irrefutable fact of the government’s ability to service the debt without raising the debt ceiling, as I have explained above. The only way the federal debt would not be serviced is if somebody in the government committed an unlawful act.
10. By calling into question the validity of the public debt, these elected Leftist politicians are defying their sworn oaths to preserve, protect, and defend the Constitution of the United States. Why are they doing this? To use unconstitutional deception to manipulate public opinion, and to intimidate the minority view into silence.
Those are my 10 steps of logic. As can easily be done with many Leftist positions, I have circled their “government default” argument back around upon itself, showing that it PROVES ITSELF WRONG. It’s another Progressive Paradox.
Please listen to Rep. Tom McClintock (R-CA), the author of the Full Faith and Credit Act, explain this circular LEFTIST lie in his speech on the House floor on October 9th.