The public’s mindset right now regarding our fiscal situation is one of anxiety which is being carefully constructed by politicians and the media portraying the absurd notion that without increasing the debt ceiling a default is imminent. There is absolutely nothing further from the truth; in fact it is next to impossible for a default to occur without our Government actively choosing to bring about such default. Regardless of the outcome of the debt ceiling discussions, the Treasury is raising revenue in excess of $2 trillion annually and the interest expense on the debt is about $400 billion. This clearly leaves an excess of about $1.6+ trillion available for other remaining obligations, therefore averting a default takes nothing more than our Government acting responsibly and paying the interest owed before any other disbursements are authorized. It could not be any simpler, the interest should be paid first and then everything else prioritized for the remaining funds with the lower priorities bearing the brunt of any limitations. However, the message being politically orchestrated is that default is to be expected if more debt is not authorized; this can only be true if all other obligations are intentionally prioritized ahead of the interest payments hence creating a default. This deliberately crafted strategy is designed to alarm the public thereby providing the opportunity for manipulating them into acquiescence on the debt ceiling so that the big Government agenda can continue uninterrupted. This is the response chosen by politicians in order to avoid any backlash certain to occur from spending cuts by those that benefitted by such spending. These reductions are going to be painful, but they will definitely not get any easier in the future as the debt level continues higher. If our nation accepts the viewpoint that we are incapable of decreasing spending with $14.5 trillion in debt, how could we possibly believe that it will be more achievable at $17 or $20 trillion? The answer is as obvious as the strategy of shameless propaganda asserting that our Government is unable to prevent a default if they are not allocated more money to waste.
Filed in Politics on Jul.18, 2011