There's no disaster if debt deal fails

July 14, 2011

Letter: There's no disaster if debt deal fails

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To the editor:

We hear the punditry, the president and others tell us that we must raise the debt limit by $2.4 trillion by Aug. 2 or else! Or else what?

Well, to listen to the president, we would default on our debt, thereby plunging the world into financial ruin. The Republicans, however, want to see $4 trillion to $6 trillion in spending cuts over 10 years before they will agree to anything.

The Republicans are right — history bearing them out — to insist on cuts up-front. Typically, Congress will raise taxes immediately, while promising cuts five years out, then simply refuse to implement the cuts. This is how we got here, and it is disingenuous at best to hear the man who ran up $4.5 trillion in new spending in two years claim it is Congress' fault and problem, and play the part of the responsible statesman trying to broker a deal.

The point is that if the debt ceiling is not raised, it does not mean an automatic default. It means that we cannot borrow any further. That's it!

The government receives revenue daily, totaling approximately $200 billion per month. Debt service is $19 billion per month. Without borrowing any more the government could choose to continue paying the debt service, however this would mean that some other items would not get paid.

How serious is this? Well consider the following: We're spending $21 million to research how Frisbees fly; there's $137 billion in unspent stimulus funds; $129 billion in improper payments; $41 billion to the 423,000 new government employees; $8 million per month in limousine purchases; $2.3 million to chart shrimp on treadmills; a $427,824 research grant to design better video games for senior citizens based on their unique "game-play needs. Then there's the $712,883 research grant to develop "machine-generated humor." This project will design artificially intelligent "comedic performance agents", and will "deploy them both on- and off-line for the enjoyment and illumination of everyday citizens." There's the $54 million project to relocate one bridge for the Napa Valley Wine Train (!) in order to mitigate the possible impact of a "100 year storm event."

Yes, we could do without an awful lot of government spending before the politicians had to defund anything you care about. And when a politician — from congressman to president — tells you the world will end if they don't get more of your hard earned money, they are lying to you!