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Debt ceiling lies

January 26, 2013

[J.P.'s Moment of Common Sense on Broad View, KJFK 1230 AM Reno. Listen live Saturdays at 3:00 PM Pacific Time.]

This was a discouraging week. A year and a half ago I started this five-minute weekly commentary on the radio and the second one I wrote, dated August 6, 2011, was about the debt limit and how our politicians in Washington were lying to us.

Now it’s January of 2013, they brewed up another debt ceiling bypass this week, and they’re telling the same lies. No matter who you are, no matter what your political persuasion, it’s discouraging when you see the truth rendered irrelevant.

The biggest lie is that failure to raise the debt limit would cause the federal government to default on its debt. That one was repeated right here, last week, on Broad View. I was gnashing my teeth so hard it’s lucky I didn’t break an implant – maybe you heard the grinding noise in the background. The baloney about default is repeated so often by elected officials and national media outlets that it’s become accepted wisdom... unless you’re one of those increasingly rare people who remains immune to propaganda by thinking for yourself.

There are two ways to default on a debt obligation. Number one, you can fail to pay the principal when the obligation comes due. But remember, the debt ceiling doesn’t stop the federal government from spending – it simply doesn’t allow the amount of debt to increase. So when a Treasury note comes due, the government issues another one for the same amount, takes the money, and pays off the original one.

Voila! No default, no increase in the amount of debt, the debt ceiling is not violated.

The second way to default is by not making interest payments, but the federal government has plenty of current revenue to cover interest payments on debt plus basic functions like national defense, air traffic controllers, and air freshener for Harry Reid. Without a debt ceiling increase they might need to furlough non-essential people as they’ve done in the past... like those thousands of new IRS agents they hired to enforce Obamacare taxes; and like those Fish and Wildlife people who spend their time counting snail darters, sage grouse, and pupfish; and like those BLM people who round up wild mustangs and sell them to dog food manufacturers; and like those USGS people who are busy placing tracking collars on all the polar bears because they’re supposedly endangered (even though there’s more of them every year).

Who would miss any of those people if they were sent home for a while? I wouldn’t. And here’s a little secret from someone who was a federal employee himself: when the feds get furloughed because of the debt ceiling, they’re celebrating all the way out the door. They love it.

The other big lie about the debt limit comes from President Obama himself: he said it during the 2011 debate and he said it again last week. He claims that social security checks won’t go out if the debt ceiling isn’t raised. Here’s what he said in 2011:
“I cannot guarantee that those checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it.”
What a load of hooey! And he damn well knows it’s hooey! He’s trying to scare people, specifically older Americans who need that money to heat their homes and eat. It’s despicable.

Here’s what he said last week at his first press conference in eight months, talking about the Republicans’ reluctance to raise the debt ceiling:
“If congressional Republicans refuse to pay America’s bills on time, Social Security checks and veterans benefits will be delayed.”
Let’s look at some facts. Social Security benefits are paid from a trust fund. The trust fund doesn’t have actual money in it because over the years voracious congresscritters borrowed all the money and spent it, leaving behind special issue certificates of indebtedness issued by the U.S Treasury – IOUs, basically, from one government agency to another. But those IOUs are counted as part of the public debt of the United States so when people talk about the debt ceiling, currently $16.394 trillion, about $3 trillion of that is owed to the Social Security trust fund. Now then, here’s what happens when social security checks are sent out every month: the U.S. Treasury issues general obligation bonds to gather the necessary cash, retires an equal amount of those special issue certificates, and sends off the money to retirees.

Voila! Retirees get their money while the amount of debt stays exactly the same.

The President of the United States is a bald-faced liar. Sending out Social Security checks has nothing to do with the debt ceiling.

As for Republicans, the legislation they concocted this week to let federal spending continue unabated is frightening. They didn’t raise the debt ceiling like always happened in the past. Instead, they turned their backs on the problem and walked away. The legislation lets the president simply ignore the debt ceiling for three months.

The Constitution clearly says in Article 1 Section 8 that Congress is given the power to borrow money, not the president. By telling Obama he can ignore the Constitution and borrow whatever amount he wants, at least until April 15, House Republicans effectively amended the Constitution and abrogated their responsibility. For now, like it or not, the president is free of any sort of fiscal restraint and when that April 15th date arrives we can only hope he hasn’t grown fond of having that much power.

Once you give a man control of something, it’s tough to get it back.

That's... today’s dose of common sense.

"All governments are run by liars and nothing they say should be believed." – I. F. Stone

"The reason there are so few female politicians is that it is too much trouble to put makeup on two faces." – Maureen Murphy

From Grand Rapids, Michigan, USA       

January 31, 2013 - I am thoroughly disgusted with our politicians on both sides of the aisle regarding the budget, deficit, and the debt ceiling. Honestly, to borrow a line from my husband, our duly elected officials make the keystone cops look like a fine oiled machine. I do sort of like the approach, that the House has come up with, to force the Congress to make a budget, which is going without being paid, until they do their job. But...will it work; only time will tell. Congress hasn't been exactly on the ball with getting anything accomplished. The 112th Congress passed 14 bills in a year's time, that's barely one a month. They were much more productive, naming post offices and approving nominations. In fact, the recent fiscal cliff bill that was passed after the first of the year, was originally passed by the House in August 2012, sent to the Senate in September 2012, and there it sat. That bill basically just dealt with tax increases, oh yea, except for the additional pork spending thrown in there too, for good measure. On a funny note, there is a new program on one of the channels, which is all about cooking with bacon. They should just film from Washington, DC, because they already know how to put the pork in everything.
For many years, I did collections. I dealt with all sort of people. Their money problems were not created by death, illness, loss of job. Most of them were just terrible with money. They couldn't live within their means. They charged up all their credit cards, then went out and got a bill consolidation loan, then since their credit cards were at Zero, they charged them up too, and by then they couldn't get their home refinanced, (or didn't have any equity to borrow against) no one would give them another bill consolidation loan, and ultimately they ended up filing for bankruptcy. HMMM, doesn’t this sound like our federal government? They have a tendency to take such great glee out of spending other people's money, not realizing it's some of their money too. They are like many of the delinquent customers I used to deal with, who can't comprehend the difference between want and need.
I recently looked up how many lobbyists there are. It's disgusting. There are 22 lobbyists for every one of our representatives and senators. 22 of them all vying for favor of some sort be it in a bill or money. Maybe that's why much of our tax dollars are wasted on things like, doing a study on how African men wash their genitals. Or studying prostitutes in Vietnam, (what we don't have any in the US?) or building bridges and paving roads that go nowhere. It took me awhile, but I finally figured out, that our politicians may be intelligent, rational, logically, but then they step foot in Washington, and they lose their minds! Sort of like some sort of Bermuda triangle that affects all those things at the same time. I heard recently that the right now that the Debt ceiling discussion can be put off now until August. Yup, let’s just kick that can farther down the road. How bout, we just be like Nike and just do it! Oh, and a counter offer is to raise the debt limit, pending cuts in spending. You really don't have to be a rocket scientist to figure out, that if we don't raise the debt ceiling, that it really does take care of additional spending and borrowing. Maybe that would motivate them to start looking around, and realize that every program, every study, every idiotic idea is worth taking a hard look at, and either cutting or doing away with entirely. Every time the Republican House suggests what they think is a compromising offer, the Democrats come back with, not only do we want to raise the debt ceiling, but we also want to figure out how to raise additional income (tax increases) and we want to spend more too! Quit offering up any proposals, and get your heads out of the sand, and draw a line in the sand that we are sick and tired of this and we aren’t going to take this anymore. – Pam T., Virginia
J.P. replies: "I'm as mad as Hell and I'm not going to take this anymore!"

January 26, 2013 - I watched the press conference and was impressed by the president's sincerity. It looked like he really believed what he was saying. He may be an excellent deceiver, or he may simply be a patsy who says what he is told to say. For some reason I just don't see him as the intellectual type who sits down each day and crunches numbers. He just comes across as a talking head to me. Partly due to the lifestyle that he and his wife live while representing a struggling economy. I feel like he shouldn't be telling me to sacrifice more if he, the leader of our nation, is living high on the hog on our dime. I feel like if he really had compassion, and actually understood the trouble we're in that he'd have a hard time spending millions of our dollars on his numerous extravagant vacations. There's a real disconnect there. – Samantha, Michigan

January 26, 2013 - Of course Obama is a "bald-faced liar." He's a politician. What makes him different is that he believes a lot of his own crap and surrounds himself with yes men who don't tell him the truth. It's possible he actually believes Social Security checks won't go out if the debt ceiling isn't raised. It's sad to think this is where we are as a country: debating whether the president is dishonest or ignorant. – P.T., Reno

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