The Treasury Department’s Big Lie…

Written by Scott

Topics: Archives, Politics

In January, Treasury Secretary Timothy F. Geithner wrote a letter to Congress about the debt ceiling. In the letter he lays claim to, and as the media has portrayed unceasingly since, the fact that failure to raise the debt ceiling would precipitate the US Government defaulting on its obligations. He even goes so far as to use scare tactics such as military salaries and Social Security benefits (and others) not being paid.

The thing is…it’s a big fat lie. No, it’s worse than that. It’s complete propaganda.

Failure to raise the debt limit would only do one thing: stop the Treasury from accumulating new debt.

Here are the facts:
Debt ceiling: $14.294 trillion (and we’re almost at that limit)
Budget: Over $3.5 trillion
Revenue: Over $2.1 trillion

This is much like a business with expenses of $10k per month, but only bringing in $8k. Sure the business can borrow, but even it has credit limits–on purpose. Unending borrowing is NOT sustainable. Expenses must be controlled and reduced, and income may need to be increased (but as we know, an increase in income taxes can have detrimental effects, so the government may need to be more creative than usual).

Would it precipitate default? Not at all, but continuing to spend more than we have without end certainly will. What it would precipitate is this: forcing the Administration to make some hard calls in reducing spending quickly.

But that’s not politically expedient now, is it?

He even makes the assertion that “[f]ailure to increase the limit would be deeply irresponsible.”  How much further from the truth can he be? It is not only responsible, but it is the right thing to do to prevent the unending borrowing of money we don’t have and leaving to our children and grandchildren (and theirs) to pay.

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