Thursday, October 10, 2013
Attention all of you who believe that the Federal Government is about to default on its debt. Obama has made the claim repeatedly, so it must be true, right? I've got an offer for you which is too good to pass up.
Don't get stuck with a handful of worthless Treasury Bills. Next week they won't be good for anything more than lining your birdcage. Sell them to me! I'm offering two thirds of the bond's present value, cash money on the spot, no questions asked.
If you believe your glorious leader, this is the best deal you are going to get.
That is right. I'll give you sixty seven cents on the dollar. See, I even rounded that two thirds of a cent up, all because I'm that great of a guy. If we were equally sure of our position, a fair offer would be fifty cents on the dollar, but because I am twice as confident as you, I'll go two to one. Act quickly, as this offer only lasts until America defaults on its debt. Why, might you ask, am I so brimming with confidence that we are not headed for a default? The monthly cost to service our debt is right around $20 billion. It varies a bit and is generally increasing over time, but for a ballpark figure, that is the current cost. Every month the Treasury collects well over $200 billion in taxes.
It requires nine percent of the money being collected to pay the interest on the debt. For the mathematically challenged Democrats out there, that leaves ninety one percent of the money to spend on Food Stamps, Medicaid, Social Security, Defense, Welfare, etc. Some Treasury Bills will come due, and the Treasury can issue new bonds to replace them without increasing the total debt. So there is absolutely no reason that the government has to default on its debts. As a matter of fact, the 14th Amendment requires the government to pay its debts as a first priority, so even if Obama wanted to spend the money and blow raspberries at our creditors, he could not legally do so.
When you hit the credit limit on your credit card, it doesn't mean you stop making the monthly payments. It means you can't keep charging new stuff.
So why does Obama keep saying it? A demagogue is gonna demagogue. He wants to scare people, plain and simple. He can't win on fact, so he is trying to get people to panic and demand that Congress give him what he wants: more money to spend on his failed policies. What is really at stake is Obama being forced to set some budgetary priorities. He doesn't want to do this because it means saying "No" to someone's demand for Federal money, and no one is ever happy when their money is cut back. Obama's greatest horror is that he might be forced to balance the budget and live within our means. That, not the possibility of default, is why Obama can't permit the debt ceiling to be reached.
Reality is that we can't afford the current levels of spending, so cuts have to be made somewhere. If the results of this mess is some small step towards fiscal sanity, it will all be worthwhile. Seeing Obama's hypocrisy on clear display is just a bonus.
So I repeat my offer. If you believe the demagoguery, get in line to take me up on this deal. I'll give you two thirds of the present value of any outstanding US Treasury Bond. It's better than your President is offering.
Posted by Don Dodson at 9:58 AM