Obama Administration officials continue to say that "the nation's borrowing will exceed its $14.3 trillion limit on Aug. 2 and that economic shockwaves around the world would result from the first financial default in U.S. history." I have pointed out before that this is a direct and deliberate lie.
I'm not the only one say this. (If I were, you all would be fully justified in ignoring what I said unless my evidence and argumentation convinced you.) Here are just a couple of the others making the same point.
The Seattle Post-Intelligencer reports on Michele Bachmann's appearance on CBS' Face the Nation on Sunday:
Earlier Sunday, Bachmann had harsher words for those warning economic calamity unless Congress raises the government's borrowing limit by an August deadline.Meanwhile, Pennsylvania Senator Pat Toomey insists that
"It isn't true that the government would default on its debt," Bachmann told CBS' "Face the Nation." She later added, "It is scare tactics."
Instead, she said the U.S. could avoid a default by paying only the interest on U.S. obligations while lawmakers work on a deal to cut spending dramatically as part of a new debt ceiling.
the Treasury can easily pay interest to bondholders first. The remaining funds would cover about two-thirds of the budget, and the president would simply be forced to make drastic cuts because he lacked money to pay all the bills.President Barack Obama and Treasury Secretary Tim Geithner are like the guy who wants to buy a big screen TV but needs to buy groceries and pay his mortgage, but doesn't have enough money to do all three. He should pay the mortgage and buy the groceries, and has enough to do that with more left over. He could decide to default on his mortgage so he can buy the TV he wants. But if he does so, that default is his choice. It simply is not necessary.