[ul]
[li]There is an expense just to bring home the troops.[/li][li]Define “welfare.”[/li][li]Why only federal employees? There are about two million federal civilian employees out there doing work directed by Congress. What about the 20 million federal contractors out there as well?[/li][/ul]
The bond rating ship has probably already sailed, it’s predicated on more than simply not defaulting. Time to move your paper into the Isle of Man…
If I have $1000 in credit card interest due, as well as contracts that require me to pay $1000 to various folks that have done work for me in the last month, and I only pay the credit card interest, would you claim that I have avoided “default”?
Perhaps technically, but in the broader since of the word I have failed to meet my financial obligations for the month. That is basically the definition of default.
So yes, debt interest will almost certainly be payed - but commentators are not being deceptive by describing the resulting situation as default, IMO.
The facts don’t matter as much as the perception. A bank may be sound by every reasonable measurement, but if ten thousand people rush to its doors to withdraw their money, its in deep kim chee.
You know, that makes me wonder if we could have taken care of the credit crisis by resurrecting Jimmy Stewart. Probably would have cost less than the bailouts.
I read something today that indicated that the Treasury views any non-payment of legally required bills (not just repayment of debt due) as a default. Does anybody have a cite for this position?
The reality is that you can make all th cuts you want to future spending but you can’t not pay the people you already owe money to. In other words if you guys just paid your bills, you would already go past the ‘debt ceiling.’
If I make my credit card payment but don’t pay the invoice from the plumber, I’m defaulting on a debt owed. Do you really need a cite for that?
No, I agree with that entirely (see post #23). I meant a cite for Treasury explicitly defining “default” as the failure to pay any bill.
Because this would seem to run counter to one of the main Tea Party talking points, which is that as long as we pay the interest on the debt we haven’t defaulted. Although I guess they would probably just say the Treasury was lying…
Reality as a whole runs counter to Tea Party talking points.
OK, I found the cite I was looking for:
From the Treasury: Featured Stories | U.S. Department of the Treasury
A counter-point from Felix Salmon here: http://blogs.reuters.com/felix-salmon/2011/01/21/treasurys-astonishing-statement-on-us-default/
Is the OP saying that if Tuesday comes and a tax increase is not passed, that the government should just cut spending so drastically that it can still pay the interest on the debt and not have to borrow any more?
I’m pretty sure that’s the solution that most of the Tea Party conservatives are after. That’ll show them!
No. Did you even read my OP?
If we hit the debt ceiling, we instantly cannot pay for about 40% of the things we pay for now. We’re going to have to make drastic cuts simply because we will only have the ability to pay for 60% of what we need.
So then the question becomes what do we cut and what do we pay for?
I think most people would be in favor of prioritizing stuff like having social security checks go out, and have essential government functions remain intact, and to just stop paying back our debt interest as one of the things we’re going to cut.
I’m saying that we should keep paying the debt interest, and cut social security checks and other essential services. My reasons are outlined in the OP.
I’m saying that we need to preserve our credit rating in the future, and a side benefit of having all of the negative effects hit immediately will be to make people realize they need the government to function and will riot in the streets demanding that the debt ceiling be raised. How in the world is that like the tea party?
Right. And as Omar points out that is exactly the Tea Party position, at least with respect to what should be done. Pay the debt, pay SS and some Medicare, and pay most of defense. Don’t pay the rest.
Well, that’s the difference then. You believe people will realize they need all that stuff and demand more revenue or debt. They believe people will realize they didn’t need all that stuff, and without the government yoke the economy and markets will take off and everything will be wonderful.
Those sound pretty similar, if not the same thing to me.
Where do you get the idea that the Tea Partiers want the government to default? From the media? No, they want a spending cut solution only.
FFS, I’m saying don’t send out the social security checks. Don’t let people on medicaid see their doctors. Where not contractually obligated, stop all work by federal contractors. I’m not saying this because it’ll lead to a new utopia where everyone realizes they don’t need the government anyway, I’m saying this will be catastrophic. The “keep the government out of my medicare!” crowd will realize what happens when their tea party style recreational outrage leads to actual results. Everyone will realize how much they need the government and there will be a massive backlash against the tea party, it will be essentially destroyed.
So yeah, you got me, I’m secretly working for the tea party while advocating that they essentially become destroyed.
The debt ceiling issue is going to be resolved soon after Aug 2 if not before. When people realize how drastic the cuts are, there’s no way they’ll stand for it, and a debt limit increase will be passed. I’m interested in reducing the long term damage in the mean time so the priority should be on maintaining the credit rating of the US. If all of the tea partiers realize how much they’re railing against their own self interest when the government teat runs dry, that’s just a side bonus.
The flaw in your plan is that there are lots of cuts that can be done without going to the extreme you propose.
Your solution is like the spoiled child that says, “if I can’t play with my train, I’ll just hold my breath until I turn blue, that’ll show you.”
Some have declared that default is exactly their desire.
Others say they want the government to not pay many of the things it has already agreed and/or contracted to pay. (That’s what the budget defined – those things that Congress agreed to pay for. But they don’t feel obligated to abide by those decisions.) They say that of the things chosen to be paid out of the money available after August 2nd, service on the debt should be included. Then, when we run out of money, just stop paying for anything else.
And they assert that, since we would still be paying our obligations to our financial creditors, this somehow does not equate to a “default”. Hey, no harm, no foul!! :dubious:
As was noted above, paying back VISA but screwing the plumber can only be viewed as “not in default” by morons.
My plan was only about setting priorities. I’m not saying cut anything that isn’t necesary to cut. But do you understand that we’d need to cut 40%!!! of outlays? That’s a huge number.
So I’m saying we should prioritize it with the debt payments at the absolute top. Below that, basic infrastructure services to keep society running. Below that, contractual requirements to entities that work for or with the federal government. And then below that, entitlements. The entities that the government legitimately owes a debt to, who aren’t at fault for causing this situation, should be prioritized over the citizens who let it happen on their watch.
If we somehow have enough money after cutting 40% revenues and paying back debt and honoring our contracts, then by all means send out the social security checks and stuff. But then if we’re able to do all that, what exactly are we cutting with that 40%?
Now there’s the rub, isn’t it? Do we “need” a government that is of the size we currently have? Do we “need” to spend 300 billion dollars a month? Democrats say, “Yes, and we should spend even more than that.” Republicans say, “Hell no.” Republicans know from experience that government spending will never go down under normal circumstances. So they are using this “crisis” to get what they can. You may not agree with them, but I think it is easy to see their point.