printDavid Henderson of EconLog, for the Library of Economics and Liberty, debunks the nonsensical (and irrational) notion that not raising the debt-ceiling will result in the US defaulting on its debt. Treasury Secretary Tim Geithner might be as gormless as his boss, since he has confused “debt obligations” with “other expenditures.”
As U.S. Senator Pat Toomey explained, in a January 19 Wall Street Journal op/ed, “the amount of money required to continue to make payments on all the U.S. government debt is a small fraction of the amount of revenue the U.S. government raises.”
Henderson again: “On car payments and student loan and credit card payments, Geithner is right. But on insurance premiums and utility payments, he’s wrong. Those are not typically debt obligations. Geithner is effectively saying that if the government wants to spend x and has only enough money to spend 0.67x, then not spending on the other 0.33x is a failure to keep an obligation. In a political sense, that might be: the government has made a lot of spending promises to a lot of people. But in an economic sense, it’s not. On the narrow issue of whether failure to raise the debt limit would necessarily mean U.S. government default on its debt, Toomey is right and Geithner is wrong.”
Is Toomey offering anything beyond a political gimmick. With the irrational herd mentality of both the media and the financial markets, I would be a bit leery than to just “f**k” with the status quo. What needs to be done are scheduled phase-outs of federal programs with most undergoing rapid phased outs (1-5 years) and some (SS & Medicare) requiring longer term elimination.
“Gormless” or conniving?
Obama and gang are playing to the gormless crowd, pinning the blame for their latest faux crisis on Toomey, Ryan and company. Meanwhile, they will continue huffing and puffing into the debt balloon. When it finally bursts, the media will feature “far right extremists” brandishing a pin.
Obama will eagerly come to the rescue. He’ll bypass Congress and appeal directly to the mousey masses, who will gladly endorse any scheme — no matter how dictatorial — so long as grocery shelves are stocked with pet food and national guard armories with “law and order.”
Sixty years ago, despite a soaring federal debt, not a man in this war-weary country would have stomached such talk, even though they’d seen it play out firsthand in Italy and Germany. “Not in America!” they’d scoff.
Today the spineless sons and grandsons of these same men will stomach almost any outrage in the name of “security.”
http://www.youtube.com/watch?v=-3sH1GaO_nw
At least the coming coup d’etat will be well-documented on videotape.
By the way, in researching Geithner’s academic credentials, I ran across this Wikipedia entry:
“Geithner was born in Brooklyn, New York, but spent most of his childhood in other countries, including present-day Zimbabwe, Zambia, India, and Thailand where he completed high school at the International School Bangkok…he studied Mandarin at Peking University in 1981 and at Beijing Normal University in 1982…He earned an M.A. in international economics and East Asian studies from Johns Hopkins University’s School of Advanced International Studies in 1985…His father, Peter F. Geithner, was the director of the Asia program at the Ford Foundation in New York in the 1990s. During the early 1980s, Peter Geithner oversaw the Ford Foundation’s microfinance programs in Indonesia being developed by Ann Dunham Soetoro, President Barack Obama’s mother, and they met in person at least once.”
http://en.wikipedia.org/wiki/Geithner
A coincidence worthy of Glenn Beck’s blackboard.
When the circle of economic and political thuggery is closed, it is amazing how we find elitist graduates of Johns Hopkins University standing shoulder to shoulder with common Marxist lunatics.
…AND INTO THE DEPTHS OF ECONOMIC DARKNESS, APPLIED MARXIST IDEOLOGY, VAPORIZATION OF INDIVIDUAL RIGHTS, FINANCIAL SLAVERY, AND FALLING VICTIM TO THE SIREN SONG TO BOARD THE “TRAIN”…
THANK YOU … FOR ALLOWING THE WIZARD OF THE RESERVE TO WORK HIS MAGIC UPON THIS COUNTRY AND DRIVE ITS DEMISE.
MERDE!
[no more caps on entire letters please.]
1. Sorry Ilana, didn’t know that was a rule re caps…won’t happen again.
2. I am on the verge of disappearing having neither the time, money, or energy to continue the fight. [I hope you keep up your presence here on BAB.]
We who wish to function under a rational system of rights are facing both the fascists of society as well as the total anarchists of society.
Please read:
http://city-journal.org/2011/21_2_vandalism.html
I am dismayed…
I’m afraid I agree with Mr. Schaefer. Progressives have decided, by whatever process they substitute for reason, that One World Order is the next step of “progress”.
Because debt is the road to servitude (see Ireland), America must be indebted. We may safely assume malice rather than ignorance, in that our overlords in D.C. have both means and an inarguable motive.
Toomey may be factually correct, but it doesn’t matter. Same old bankster blackmail: “do what we want, or we will crash this sucker right now.” And the the Republicrats will cave yet again. On the other hand, the longer banksters and pols keep spending money that isn’t there, the worse the ultimate crash will be. Leading to Civil War and a complete system re-set. So it’s all good.
According to Dennis the country is going to hell in a handbasket. And, he’s right. Don’t disappear. I have long been in the same boat. Maybe people agree with my rants and maybe not, but I won’t be silenced. Hang in there Dennis. We need all the grumps we can get.
[Seconded.]