Moody’s dismisses default talk, says US will pay bills even if debt ceiling not lifted

posted at 9:21 am on October 7, 2013 by Ed Morrissey

We are on Day Seven of the 17% Shutdown, but a more ominous deadline approaches in ten days for the budget impasse in Washington. Treasury Secretary Jack Lew estimates that the US will have exhausted its borrowing power by October 17th, and that any additional deficit spending will require a new authorization from Congress for a higher debt limit. A failure to make the change by the 17th will create a technical default, the administration claims, while conservatives have argued for two years that the government can prioritize its spending to pay its Treasury and statutory obligations first to avoid one.

The CEO of credit rater Moody’s agrees with the conservatives, and reassured markets that the US will almost certainly choose to do so:

The CEO of credit rating agency Moody’s ruled out the chance of a U.S. government default, even if an agreement over raising the debt ceiling is not achieved by mid-October. …

“It is extremely unlikely that the Treasury is not going to continue to pay on those securities,” Moody’s CEO Raymond McDaniel said in an interview with CNBC.

“Hopefully it is unlikely that we go past October 17 and fail to raise the debt ceiling, but even if that does happen, then we think that the U.S. Treasury is still going to pay on those Treasury securities,” he added.

That probably explains why the markets are giving this the ho-hum treatment so far:

Thus far, financial markets have displayed a relatively muted reaction to the government shutdown, which began last Tuesday after Democrats and Republicans failed to renew the federal budget into a new fiscal year. Wall Street’s S&P 500 is up roughly 0.5 percent since the beginning of the shutdown to Friday’s close, for example.

McDaniel attributed the markets’ seemingly complacent reaction to the relatively fresh memory of the 2011 political stalemate over the debt ceiling issue, which was ultimately resolved.

“[It] feels a lot like we’ve seen this movie before,” said McDaniel. “Ironically because we have had this experience in the recent past [it] gives people more of a sense of calm than perhaps they should have.”

CNBC also notes that the moment of prioritization has almost arrived for Lew:

Treasury Secretary Jack Lew is about to face the very same choices confronted by any financially struggling American household: Which bills to pay and when to pay them.

If Congress fails to raise the debt ceiling by around Oct. 17, Lew, who has been in the job less than a year, will have to sit at his desk and figure out how to make due on roughly one-third less in the way of government funds for the bills he has to pay. Because he can no longer borrow, according to the Bipartisan Policy Center, government spending will fall by about 32 percent, or $108 billion in the first month.

It’s like the head of a household who has a family member gone wild with a credit card: Lew will be responsible for paying the very bills that Congress has rung up, even while Congress denies him the right to borrow money to pay for them.

But there are some key differences with households: While a homeowner might juggle a dozen or so monthly bills, Lew has to figure out which of more than 100 million monthly government payments to make. Because the government payment system is largely automated, Lew can’t just decide not write a check here or there. He has to figure out how to transform a system designed to pay all of America’s bills in full and in a timely way, to one that pays some of its bills, and not others.

My guess is that we’ll get some sort of face-saving deal by the 15th or so, which will make this unnecessary. However, Lew might want to expedite the development of this solution just in case.


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Of course we won’t default. The interest on the debt is around $30 billion per month and the Feds are taking in $250 billion.

The ONLY reason the US would default is if Obama and Lew refused to service the debt.

Resist We Much on October 7, 2013 at 9:24 AM

Yeah, it’s not like they have a problem printing worthless paper money.

Cindy Munford on October 7, 2013 at 9:24 AM

The ONLY reason the US would default is if Obama and Lew refused to service the debt.

Resist We Much on October 7, 2013 at 9:24 AM

Which means default is a distinct possibility.

crrr6 on October 7, 2013 at 9:25 AM

Must destroy McDaniel.

Must destroy McDaniel.

Must destroy McDaniel.

Must destroy McDaniel.

Ben Hur on October 7, 2013 at 9:26 AM

Obama will tell him no methinks

cmsinaz on October 7, 2013 at 9:26 AM

I wonder if the media is downplaying the default aspect of the government because the average person is less likely to understand or care about a few late payments? No national parks and Amber alerts make better press.

Cindy Munford on October 7, 2013 at 9:26 AM

Thank you! All this BS about default is just a bunch of fear-mongering aimed at a low information public.

Obama would have to intentionally not pay our interest payments to cause a default, otherwise the Treasury collects more than enough to pay our bills.

Charlemagne on October 7, 2013 at 9:27 AM

Obama and Lew will try to do more to scare the markets.

It’s obvious at this point who the hostage takers are.

gwelf on October 7, 2013 at 9:27 AM

Yeah, I would not be so sanguine about the US paying its bills. If Boehner for whatever reason declines to cooperate with Obama, he might well choose to deliberately default. This is the same thug who has been closing memorials and parks that get no federal funds or maintenance and harassing elderly WWII veterans out of sheer spite.

Don’t assume the default talk is just “all talk.”

Doomberg on October 7, 2013 at 9:28 AM

So the Treasury can choose not to pay. I guess that order would come from the WH.

Dongemaharu on October 7, 2013 at 9:28 AM

O SNAP.

There went a HUGE talking point for the left LOLOLOL!

REALITY STINKS liberals.

Hate to do it again buttt…..

WE TOLD YOU SO!

watertown on October 7, 2013 at 9:28 AM

Screw that. The Chinese and the bankers can wait in line like everybody else.

urban elitist on October 7, 2013 at 8:27 AM

So, your argument is that the debt ceiling is unconstitutional and that this whole circus can be avoided. I think we agree.

I assume that if the Republicans cared about the constitution they would lift the debt ceiling so that Constitutional obligations might be met and debt “would not be questioned” (is there a vaguer phrase in the whole document?)

But, if you don’t care, I don’t.

urban elitist on October 7, 2013 at 9:05 AM

We need new trolls. The ones we have now are too stupid for words.

NotCoach on October 7, 2013 at 9:28 AM

So, Lew’s statement that Obama will be forced to default without a raised debt ceiling is a …. Lie?

Heh, go figure.

socalcon on October 7, 2013 at 9:29 AM

Don’t assume the default talk is just “all talk.”

Doomberg on October 7, 2013 at 9:28 AM

Truly cutting off his own nose to spite his face.

NotCoach on October 7, 2013 at 9:30 AM

“It is extremely unlikely that the Treasury is not going to continue to pay on those securities,” Moody’s CEO Raymond McDaniel said in an interview with CNBC, he then continued, “But I’m afraid I’ll have to end this interview as I just received a text which says I’m going to be audited for the first time.”

Ruin the narrative and there will be punishment.

Bishop on October 7, 2013 at 9:30 AM

If GOP is even perceived to have caved at the end of this then it’s over for the country. It’s probably over anyway we shall see.

bgibbs1000 on October 7, 2013 at 9:31 AM

However, Lew might want to expedite the development of this solution just in case.

Won’t happen….not because it’s impossible to build a system to do this (it is not) but because the Democrats need this excuse so that they can continue to cry wolf.

Building a flexible payment system that allows the Treasury to prioritize payments is a rational thing to do, can’t expect the cesspool in DC to act rationally though…

powerpickle on October 7, 2013 at 9:32 AM

while conservatives have argued for two years that the government can prioritize its spending to pay its Treasury and statutory obligations first to avoid one.

Priority #1: President Petulant’s greens fees.
Priority #1A: Moochelle’s vacations.

everything else is unnecessary.

rbj on October 7, 2013 at 9:33 AM

Which means default is a distinct possibility.

crrr6 on October 7, 2013 at 9:25 AM

Exactly. If Obama decides to default and have a little speech blaming Rush Limbaugh, who’s going to stop him? The Republicans? Ha.

Fenris on October 7, 2013 at 9:33 AM

Yeah, I would not be so sanguine about the US paying its bills. If Boehner for whatever reason declines to cooperate with Obama, he might well choose to deliberately default. This is the same thug who has been closing memorials and parks that get no federal funds or maintenance and harassing elderly WWII veterans out of sheer spite.

Don’t assume the default talk is just “all talk.”

Doomberg on October 7, 2013 at 9:28 AM

But would that work out as well as closing memorials and such. Obama has been losing the optics war so far. Would overseas bond holders call him on it?

Dongemaharu on October 7, 2013 at 9:33 AM

There’s no need for default? Just like there’s no need to close the Vietnam War Memorial?

Akzed on October 7, 2013 at 9:35 AM

…Would overseas bond holders call him on it?

Dongemaharu on October 7, 2013 at 9:33 AM

Does he care if they do? Does Obama seem like a responsible person to you?

Fenris on October 7, 2013 at 9:37 AM

guess the markets arent listening to this guy. the dow is down over a 100 points and has been barely been open today. at the least the SCFOAMF is happy, he talked the stock market down.

chasdal on October 7, 2013 at 9:38 AM

The ONLY reason the US would default is if Obama and Lew refused to service the debt.

Resist We Much on October 7, 2013 at 9:24 AM

Here’s the thing though. Obama is spiteful and stupid enough to do something like that. As long as he believes(I think he’d be mistaken, BTW) that the Democrat/media complex will have his back and try to blame it all on Boehner, he’d be insane enough to intentionally not service the debt.

Doughboy on October 7, 2013 at 9:38 AM

So, your argument is that the debt ceiling is unconstitutional and that this whole circus can be avoided. I think we agree.

urban elitist on October 7, 2013 at 9:05 AM

It’s not unconstitutional. Of course, if you want to return to the days before the debt ceiling where Congress had to approve EVERY bond issue, we can do that. I’m not certain that you’d like that situation.

I assume that if the Republicans cared about the constitution they would lift the debt ceiling so that Constitutional obligations might be met and debt “would not be questioned” (is there a vaguer phrase in the whole document?)

But, if you don’t care, I don’t.

No one is questioning the public debt…and it’s not vague.

Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

Resist We Much on October 7, 2013 at 9:40 AM

Boehner should pass a clean debt ceiling decrease.

crrr6 on October 7, 2013 at 9:41 AM

Obama wants a default. This was all coordinated to expire now. Remember for much of august and September, Lew exercised “extraordinary measures” and the debt remained mysteriously unchanged.

h a p f a t on October 7, 2013 at 9:41 AM

The dog eating Marxist will definitely allow default to happen if there is no agreement. Bank on it no pun intended. And I think short of a big win for the gop let him do it.

bgibbs1000 on October 7, 2013 at 9:41 AM

‘He said he will not negotiate on the debt ceiling — a reasonable position, ‘I will not be blackmailed.’ But he should be talking, they should be meeting and they should be discussing this because as I think Steve Rattner showed earlier, the America economy is at stake and the president, if there is a downturn or a collapse or whatever could happen here that’s bad it’s going to be on his head.

The history books are going to say, ‘We have an economic calamity in the presidency of Barack Obama. Speaker Boehner is indeed playing a role on this. Go back to the Great Depression in the 1930s, I’ll bet no one can name who was Speaker of the House at the time — Henry Thomas Rainey. He’s not in the history books. It’s on the president’s head. He’s got to lead, he’s got to talk. And the absence of discussion here I think is a baffling element.’

– Bob Woodward, Morning Joe, 30 September 2013

Resist We Much on October 7, 2013 at 9:42 AM

Charlemagne on October 7, 2013 at 9:27 AM

THIS …. the only thing the debt ceiling will do is keep the gov’t from putting us
deeper into debt. (cue Tennessee Ernie Ford singing 16 tons)

conservative tarheel on October 7, 2013 at 9:43 AM

The ONLY reason the US would default is if Obama and Lew refused to service the debt.

Resist We Much on October 7, 2013 at 9:24 AM

Which means default is a distinct possibility.

crrr6 on October 7, 2013 at 9:25 AM

No way. That wouldn’t just be political suicide but an impeachable offense. Deliberately attempting to destroy the American economy would instantly put Obama’s approval rating in the low 20s, and the Senate would be forced to yield to not just conservative, but bipartisan demands to reign in this administration, if not take up proceedings. Not to do so would mean double digit Senate losses in 2014 for the Democrats.

LOL, jk. The media will cover for the left in ways that wouldn’t even have occurred to Goebbels.

Gingotts on October 7, 2013 at 9:43 AM

Why do you assume Obama wouldn’t default? I mean he wants to inflict the maximum amount of pain on the population as possible and use it for political gain.

He knows the Media has his back, he knows Low-Information-Voters won’t read past the headlines, he knows the American Public already “knows” the US defaults if it doesn’t raise the debt-ceiling… exactly why would he choose to do what’s right for the country when it conflicts with what’s right for him?

Ukiah on October 7, 2013 at 9:46 AM

Why do you assume Obama wouldn’t default? I mean he wants to inflict the maximum amount of pain on the population as possible and use it for political gain.

Ukiah on October 7, 2013 at 9:46 AM

There is no gain in defaulting. Default means unavoidably reduced spending. Defaulting would ruin his dreams of government over the people, or else Barrycades.

NotCoach on October 7, 2013 at 9:49 AM

We need new trolls. The ones we have now are too stupid for words.

NotCoach on October 7, 2013 at 9:28 AM

Yeah, I don’t know what happened. They don’t even try anymore. The same trolls that at least tried to make a strong case for Obama are either nonsensical and free of facts like urban elitist or verbaluce or are like libfreeordie and refuse to actually engage on the topic and instead ramble like some hobo about the polls and the political battle.

You can hit them in the face with the corruption, special deals and general epic failure of ObamaCare and they don’t even respond.

gwelf on October 7, 2013 at 9:52 AM

A default would trigger, at best, a US recession. A real default would drive up interest rates. He might wish to inflict short-term pain to score political points, but does he want history to record him as the first US President to default on the debt?

If investors really believed that there was a possibility that we would default, interest rates would be ticking up on bonds. They aren’t. Goldman-Sachs and others were at the White House last week to meet with Obama. What did Obama tell them behind closed doors? If default was a real possibility, the banksters would be making a move in the bond market. They aren’t. What does that tell us?

Resist We Much on October 7, 2013 at 9:54 AM

The ONLY reason the US would default is if Obama and Lew refused to service the debt.

Resist We Much on October 7, 2013 at 9:24 AM

Speaking of self-immolation, I wonder why the media is ignoring the story of the guy who set fire to himself on the National Mall. I’m guessing it is because the motive was not favorable to dear leader.

Happy Nomad on October 7, 2013 at 9:55 AM

Yes the US does pay its debt maintenance, just like it always does.

That and the few things given to the federal government in the Constitution are its direct Constitutional duties… and they are quite few.

You would think that with $2.5 trillion coming in per year that you could run a government on that. And if you don’t want to raise the debt ceiling then, hey, you want to just spend what we take in. And not willing to negotiate means that you want the ceiling to stay just where it is…and I’m all for that!

Those direct, Constitutional obligations stated in the US Constitution come FIRST. Debt maintenance, military, USPTO, bits of trade and commerce, stuff like that. It is a simple document to read and find out the few critical duties and obligations of the government. Courts are in there, but only the SCOTUS gets named, other courts are lesser ones that Congress can create or abolish if it wishes. No DoJ is mentioned, no Dept. of Agriculture… heck State Dept. isn’t even mentioned, just Ambassadors. But at least they get some tie in to Embassy staff for the Ambassador…

So once all that immediate stuff gets paid out you should still have something left over for all this other stuff Congress wants to do. If you want SSA, in full, then most of the M&Ms get chopped… as do Energy, Education, EPA, FDA, Agriculture, Labor… you want those things then you have to pare back SSA which is just a spending program, after all. Once you can’t spend on to oblivion you have to make choices on what to axe and what can be pared down.

17% appears to be on the chopping block right now and that is a good start. The big bruisers are the M&Ms followed by SSA, and that is without Obamacare. You can’t have it all if you want to stop the madness of spending…and if Barry doesn’t want to budge, well, then he can expect more to start not being funded.

So sorry!

You could have negotiated.

Choosing not to has its consequences.

Poor old mean, spiteful Barry, not wanting to be reasonable… or very reasonable if you cast him as wanting to start the liquidation process on most of the government. Depends how you look at it.

ajacksonian on October 7, 2013 at 9:55 AM

Maybe Mr. McDaniel should explain this simple step to Mr. Lew, since he obviously doesn’t know what the hell he is doing or talking about. It seems everyone on the left doesn’t mind supporting a political lie if it means no one on the right doesn’t cross prezzy I won’t negotiate’s red line. The lsm is not cheerleading from the side lines anymore they are running on the field to assist their team in the destruction of the R party and this country.

Kissmygrits on October 7, 2013 at 9:56 AM

But would that work out as well as closing memorials and such. Obama has been losing the optics war so far. Would overseas bond holders call him on it?

Dongemaharu on October 7, 2013 at 9:33 AM
I’ll submit he’s counting on that.

Do remember why Cinco De Mayo happened and shouldn’t be celebrated – France was trying (and ultimately successful for a short while despite the setback at Puebla on 5/5/1862 that is the “holiday’s” source) to get deadbeat Mexico to pay the interest on its debts to various European countries.

Steve Eggleston on October 7, 2013 at 9:56 AM

Would Obama decide to default in keeping with his spiteful reaction to the shut down?

Cindy Munford on October 7, 2013 at 9:57 AM

Moody’s dismisses default talk, says US will pay bills even if debt ceiling not lifted

Anyone with even half a brain has been screaming this since Barky first started threatening to cause a default before the last debt-limit tantrum. Not the GOP leadership, of course … they accepted the “default” idiocy and kept saying it, themselves. Barky’s default threats were totally un-Constitutional and Barky should have been impeached, tossed, and criminally prosecuted for them. Should have … but we only have the gutless GOP and they seem to think that criminality is another affirmative action set-aside.

But, now …Moody’s just haven’t taken into account the fact that Barky is going to intentionally cause a default the same way he’s trying to assault Americans in every way possible – petty and harmful – “blaming” it on “the shut-down”. The Treasury takes in over $200 billion/month in receipts while debt service is under $30 billion/month. It doesn’t require anything more than a 4th grade understanding of arithmetic to see that there is no default risk – if actual an actual, eligible American were in the Oval Office … but Barky would waste all the cash putting cones up on every inch of feral government land and then cry that nothing is left for debt service.

ThePrimordialOrderedPair on October 7, 2013 at 9:57 AM

We need new trolls. The ones we have now are too stupid for words.

NotCoach on October 7, 2013 at 9:28 AM

And then what?

Has anybody with an above room temperature IQ tried to defend any of zero’s decisions?

New trolls would be just as stupid as the old trolls.

cozmo on October 7, 2013 at 9:58 AM

It’s like the head of a household who has a family member gone wild with a credit card: Lew will be responsible for paying the very bills that Congress has rung up, even while Congress denies him the right to borrow money to pay for them.

Yeah, because the White House in general – and Barack Obama in particular – have nothing to do with how much we spend.

/sarc

DRayRaven on October 7, 2013 at 10:00 AM

Since the dept of labor or omb or whatever alphabet collection that is responsible for measuring the debt has stopped the clock, we don’t even know how much the debt is? It may have already punched through the ceiling.

Kissmygrits on October 7, 2013 at 10:00 AM

To quote John Boehner, this isn’t some damned game.

I think the GOP needs to make a stand here. No half-assed tinkering with “a package” of tax reform schemes which are never meant to be implemented in exchange for raising the debt ceiling.

Real reform now. But no negotiating with the administration until they do something about the FY14 budget. See who blinks first.

Happy Nomad on October 7, 2013 at 10:00 AM

Why do you assume Obama wouldn’t default? I mean he wants to inflict the maximum amount of pain on the population as possible and use it for political gain.

Ukiah on October 7, 2013 at 9:46 AM

I’m leaning that way now too. Destruction is easier than construction and so Dog Eater gains no matter what happens with any of this, and if he doesn’t like the path being taken he changes the path.

Bishop on October 7, 2013 at 10:02 AM

New trolls would be just as stupid as the old trolls.

cozmo on October 7, 2013 at 9:58 AM

But they would taste fresher.

Steve Eggleston on October 7, 2013 at 10:03 AM

…What did Obama tell them behind closed doors? If default was a real possibility, the banksters would be making a move in the bond market. They aren’t. What does that tell us?

Resist We Much on October 7, 2013 at 9:54 AM

That, just like the Insurance and Medical and energy businesses Obama seeks to destroy, they haven’t bargained on just how big a radical and liar Obama is. Well, I’m not predicting it, but I think he’s considering it.

Fenris on October 7, 2013 at 10:03 AM

Here’s another reason why a default is a miniscule possibility: Would Barack Obama really give up the opportunity not to seize more power for the Executive Branch when Reid, Pelosi & Co have his back?

He would give a televised address to the nation and say:

‘While I really don’t want to do this – and I wouldn’t have had to if the hostage-taking Republicans would have raised the debt ceiling without strings attached (even though overwhelming majority of Americans D/R/I oppose such) – but the fallout from not raising the debt ceiling would be too catastrophic. So, I am going to just go ahead and do it myself because the American people ‘just can’t wait.’

Illegal and impeachable, but who would stop him? Harry Reid and Senate Democrats? lolz

Resist We Much on October 7, 2013 at 10:04 AM

But they would taste fresher.

Steve Eggleston on October 7, 2013 at 10:03 AM

You have been eating the trolls?

I think I found your personal aroma problem.

cozmo on October 7, 2013 at 10:07 AM

Will we default? Won’t we default? Come on folks, we all know if it’s not today, it will be tomorrow. Better to take the bitter medicine today than to let it get more bitter and take it tomorrow.

A favorite line from The Walking Dead comes to mind: “What do you want me to do, pay ya some money?”

JoseQuinones on October 7, 2013 at 10:08 AM

Does he care if they do? Does Obama seem like a responsible person to you?

Fenris on October 7, 2013 at 9:37 AM

I’m saying the more people see his BS antics, the more they hate him, the better. He’s exposing himself, and even the media is having a hard time corralling the spin.

Dongemaharu on October 7, 2013 at 10:15 AM

Dongemaharu on October 7, 2013 at 10:15 AM

That’s true to an extent. But Obama can’t get elected again and he’s making hay while the sun shines.

Fenris on October 7, 2013 at 10:19 AM

I’m saying the more people see his BS antics, the more they hate him, the better. He’s exposing himself, and even the media is having a hard time corralling the spin.

Dongemaharu on October 7, 2013 at 10:15 AM

Meh. Barky’s been pulling this same sh!t since he first slimed into office. ANyone who didn’t already know what a vindictive, inept, incompetent, lying, America-hating pr!ck Barky is before now certainly isn’t going to learn.

ThePrimordialOrderedPair on October 7, 2013 at 10:21 AM

You have been eating the trolls?

I think I found your personal aroma problem.

cozmo on October 7, 2013 at 10:07 AM

Among ogres, trolls are a delicacy (or so I’ve heard ;-)

Steve Eggleston on October 7, 2013 at 10:52 AM

Because the government payment system is largely automated, Lew can’t just decide not write a check here or there. He has to figure out how to transform a system designed to pay all of America’s bills in full and in a timely way, to one that pays some of its bills, and not others.

No doubt this is true to some extent, but why does Lew’s argument that the Executive Branch can’t and won’t because of the system in place sound so much like the the Executive Branch’s NSA argument that they can’t and won’t do things because of the system that is in place?

Yeah, the two are different in that the former is something we want done and they say they can’t and won’t do it, and the latter is something we don’t want done and they say they can’t and won’t do it, but both are about a system which the the limits of which control their flexibility. And we’ve seen that the NSA’s assertion was pretty much a lie in service to the Administration’s desires.

Maybe we should send the Treasury over to run the NSA and send the NSA over to run Treasury at least until the shutdown/debt limit fight is over because the NSA knows how to override the “system”.

Dusty on October 7, 2013 at 11:01 AM

Just remember the promise to begin “fundamentally transforming America”. What would most certainly transform America, perhaps irrevocably? Default on the debt. It would bring the US crashing down to the same level as Europe. End all the internationally offensive exceptional nation talk. DO NOT put this past Obama

Count Mahdrof on October 7, 2013 at 11:06 AM

ajacksonian on October 7, 2013 at 9:55 AM

Yer talk’n my kinda language.

I don’t normally re-post my past comments, but this needs to be repeated…

RE: Niall Ferguson’s “The debt is the threat’.

He’s right… the proper thing to do, since the ‘rats are determined to operate without a Constitutionally required budget, is to refuse to raise the debt ceiling. Period.

The effort from that point on is to proclaim to the public that the government’s insane spending spree is OVER!

Yeah yeah… the LSM will burn the GOP at the stake but… so what?

That’s happening anyway…

If the polls aren’t lying, a majority of Americans think the government is spending too much money.

So… bite the bullet, and shove King Obama into a corner… he’s expecting the GOP to blink. Okay… call him up, privately, and tell him… the party’s over.

The current revenue intake is enough to cover all Constitutionally required spending… all Obozo’s shiny’s… not so much.

I believe that the GOP can win 2014 with this stance… Cut the spending, or else.

Fvck the LIV’s, Obamabots, and parasites. Cut off the gravy to the Left’s rent seekers and pets… leave them hanging until 2014.

It’s time to force this battle…

the Republic, or nothing.

CPT. Charles on October 5, 2013 at 12:13 PM

Add to that a recent Rasmussen poll

One of the key foundational concepts in the Declaration of Independence which Lincoln referred to “four score and seven years ago” is that “governments derive their only just powers from the consent of the governed.” Just 17% of Likely U.S. Voters now think the federal government has that consent.

Emphasis mine.

Americans still overwhelmingly agree with the central tenets of the Declaration of Independence. Most also continue to believe the U.S. Constitution should be left as is and remain the nation’s fundamental law.

[More Americans than ever (63%) think a government that is too powerful is a bigger danger in the world today than one that is not powerful enough.]

[A new Rasmussen Reports national telephone survey finds that 56% of American Adults think the Constitution should be left alone.]

The Republic or Nothing!

CPT. Charles on October 7, 2013 at 11:46 AM

Moody’s remembers what happened to Standard and Poor’s after the downgrade.

agmartin on October 7, 2013 at 12:11 PM

If Congress fails to raise the debt ceiling by around Oct. 17, Lew, who has been in the job less than a year, will have to sit at his desk and figure out how to make due on roughly one-third less in the way of government funds for the bills he has to pay. Because he can no longer borrow, according to the Bipartisan Policy Center, government spending will fall by about 32 percent, or $108 billion in the first month.

Yeah, eliminating about 4% of GNP in an already fragile economy overnight will be a big nothing burger, just as long as we can honor the debt. And as the economy slides into recession, and even depression, and tax revenue shrinks, leaving even less for the government to spend, we’ll be just fine, because, hey, the budget will be in balance.

Excellent analysis! Some real cogent economic thinking here at Hot Air!

Mr. Arkadin on October 7, 2013 at 3:37 PM

Moody’s dismisses default talk, says US will pay bills even if debt ceiling not lifted…

…conservatives have argued for two years that the government can prioritize its spending to pay its Treasury and statutory obligations first to avoid one.

The CEO of credit rater Moody’s agrees with the conservatives, and reassured markets that the US will almost certainly choose to do so:

There is plenty of revenue coming in every month from tax withholdings and fees.

AFAIK, that revenue can be used to service current debt and fund necessary government spending.

The debt limit prohibits the government from borrowing additional money once the limit is reached.

However, AFAIK, the government can also use revenues to pay off currently due debt, if necessary. It can then immediately borrow it back, keeping the debt at the same level.

farsighted on October 7, 2013 at 4:01 PM

THIS …. the only thing the debt ceiling will do is keep the gov’t from putting us
deeper into debt. (cue Tennessee Ernie Ford singing 16 tons)

conservative tarheel on October 7, 2013 at 9:43 AM

You got it.

A reminder that Unions once upon a time actually did something good for the country in breaking this pernicious company practice.

AesopFan on October 7, 2013 at 9:23 PM

…but…will we be able to pay for the shrimp, Kobe beef and green fees?

KOOLAID2 on October 7, 2013 at 10:06 PM