Obama narrative on debt ceiling increase proven false

Discussion in 'News / Current Events' started by Revmitchell, Oct 9, 2013.

  1. Revmitchell

    Revmitchell
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    One of the nation’s top credit-rating agencies says that the U.S. Treasury Department is likely to continue paying interest on the government’s debt even if Congress fails to lift the limit on borrowing next week, preserving the nation’s sterling AAA credit rating.

    In a memo being circulated on Capitol Hill Wednesday, Moody’s Investors Service offers “answers to frequently asked questions” about the government shutdown, now in its second week, and the federal debt limit. President Obama has said that, unless Congress acts to raise the $16.7 trillion limit by next Thursday, the nation will be at risk of default.

    Not so, Moody’s says in the memo dated Oct. 7.

    ” We believe the government would continue to pay interest and principal on its debt even in the event that the debt limit is not raised, leaving its creditworthiness intact,” the memo says. “The debt limit restricts government expenditures to the amount of its incoming revenues; it does not prohibit the government from servicing its debt. There is no direct connection between the debt limit (actually the exhaustion of the Treasury’s extraordinary measures to raise funds) and a default.


    http://www.washingtonpost.com/blogs...?hpid=z2#c1e3ada3-dc00-41d8-92cb-327c5c814d82
     
  2. thisnumbersdisconnected

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    That's what I've been saying all along, that there will be no "default" because we are not insolvent, not even close to being insolvent, and would, like over-extended credit card holders, pay minimum balances until such time as we could afford to do otherwise. Which is, essentially, all we've done throughout the years of the Great Pretender's dictatorship anyway.
     
  3. InTheLight

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    If the debt limit isn't raised we will be insolvent, i.e. unable to pay our liabilities. Yes, we will be able to pay the principal and interest on our debt, so technically we will not "default on our debt". But we will not be able to pay all our obligations.

    The US is obligated to pay expenses of about $10B a day. Tax receipts are about $6.8B a day. Let's see how far the government will last with those numbers in operation. Pick and choose winners and losers by deciding who gets paid and who doesn't. That's a recipe for anarchy.

    Suppose we decide not to pay the interest on the debt favoring to keep Homeland Security and Immigration operational instead. Then we would be both insolvent and in default.

    And no, our expenses are not like a credit card balance. There is no minimum monthly payment option.
     
    #3 InTheLight, Oct 9, 2013
    Last edited by a moderator: Oct 9, 2013
  4. Revmitchell

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    The problem is obama is trying to make it out to be something it is not. And we should not be committed to debt that we will knowingly have to barrow for later. This needs to come to an end and this is the way to force it.
     

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