Along with the Default Lie is the lie that we have already incurred these debts, and need to raise the debt limit to pay for them. (BTW, if you need one creditor to raise your debt limit so that you can pay another creditor, you have a serious problem.)
The video clip is here. Listen to Sen. Reid at time 3:47 through 4:05:
This is not money that we’re borrowing to take care of the wars in Afghanistan and Iraq in the future, or to take care of the obligations we have as a country in the future, it’s to take care of the bills we’ve already run up, things we’ve already… we… we have… we have a credit card that we have to pay.
That is, quite simply, a lie. We have to borrow money by August 2nd because we have to make Social Security payments on August 3rd. Social Security is not the immediate problem — at least it wouldn’t be if 0bama had not reduced the FICA tax this year. In general, Social Security has run a surplus, and that surplus has gone to buying special-issue Treasury Bonds, which are now in the Trust Fund. The Social Security Trust Fund counts against the debt ceiling. So the Treasury can sell general-issue bonds, use the proceeds to redeem the bonds in the Trust Fund, and the SSA will have the cash it needs to pay benefits without increasing the total debt.
Social Security will need to be dealt with, but not immediately. The drivers of the problem are the other welfare programs.