It never stops — the lies of the left.
Yesterday at his press conference, President 0bama stood in front of the press and the nation and repeated the lie that increasing the debt limit means defaulting on our national debt.
By August 2nd, we run out of tools to make sure that all our bills are paid. So that is a hard deadline. And I want everybody to understand that this is a jobs issue. This is not an abstraction. If the United States government, for the first time, cannot pay its bills, if it defaults, then the consequences for the U.S. economy will be significant and unpredictable. And that is not a good thing.
We don’t know how capital markets will react. But if capital markets suddenly decide, you know what, the U.S. government doesn’t pay its bills, so we’re going to start pulling our money out, and the U.S. Treasury has to start to raise interest rates in order to attract more money to pay off our bills, that means higher interest rates for businesses; that means higher interest rates for consumers. So all the headwinds that we’re already experiencing in terms of the recovery will get worse.
Uh, no. If we don’t pay our debts, then the people lending us the money will stop lending us money, or charge us a much higher price for it. But hitting the debt limit will not force a default any more than a person who has maxed out his credit cards will default on them if the bank doesn’t raise his credit limit.
President 0bama goes on to address this point with another bald-faced lie. (Is that why politicians don’t have beards, because then their lies would not be bald-faced? But I digress.)
Point number two, I want to address what I’ve been hearing from some quarters, which is, well, maybe this debt limit thing is not really that serious; we can just pay interest on the debt. This idea has been floating around in some Republican circles.This is the equivalent of me saying, you know what, I will choose to pay my mortgage, but I’m not going to pay my car note. Or I’m going to pay my car note but I’m not going to pay my student loan. Now, a lot of people in really tough situations are having to make those tough decisions. But for the U.S. government to start picking and choosing like that is not going to inspire a lot of confidence.
Moreover, which bills are we going to decide to pay? These guys have said, well, maybe we just pay the interest on — for bondholders. So are we really going to start paying interest to Chinese who hold treasuries and we’re not going to pay folks their Social Security checks? Or we’re not going to pay to veterans for their disability checks? I mean, which bills, which obligations, are we going to say we don’t have to pay?
Bills are not obligations. Obligations are those things that one has to pay to avoid being in default. Mortgages, car loans, and student loans are debts. Things like next month’s bills — cable, trash, water, power — are not obligations. If you cannot afford them, cancel them or reduce your usage to lower your costs. He gives more bad examples to reinforce the lie:
And last point I want to make about this. These are bills that Congress ran up. The money has been spent. The obligations have been made. So this isn’t a situation — I think the American people have to understand this — this is not a situation where Congress is going to say, okay, we won’t — we won’t buy this car or we won’t take this vacation. They took the vacation. They bought the car. And now they’re saying maybe we don’t have to pay, or we don’t have to pay as fast as we said we were going to, or — that’s not how responsible families act. And we’re the greatest nation on Earth, and we can’t act that way.
Congress has not already spent the money on Medicare, Medicaid, Social Security, Unemployment Insurance, defense, courts, etc. Congress has promised to spend that money, but it is under no obligation to do so. If we hit the debt ceiling, the Treasury Secretary decides which bills to pay first. If the nation’s top tax cheat chooses not to make our debt payments, then we will default on our national debt and our Treasury Secretary will be solely to blame for the default. Congress should immediately pass a bill requiring that our debt obligations be paid first.
Then what? 0bama does have a point that we need to make choices. Well, that choice is actually quite simple — pay what we are contracted to pay. Contracts, like debt payments, are obligations. Defense contracts are — until the contract expires. Employee salaries (including soldiers, sailors, airmen, and marines) are — up until the employee’s contract is terminated. Social welfare payments, however, are not contracts.