The US will not default on its debts, and the idea that it will is a lie. A BIG, FAT LIE.
Our government, as it stands right now, pays all of its bills via revenues (tax income, which stands at approximately $2T) and existing borrowing. It does not require any new borrowing.
It works like this: If you were in debt up to your eyeballs and you owed your debt to Visa…..say $200,000. You’re struggling to pay the interest on this debt, much less the principal. Your income/production barely supports the debt that you carry. Then Mastercard sends you an offer for a brand new credit card with a similar interest rate. What happens if you borrow on that card? What happens when the payment is due not only on the $200,000 on Visa, but now on the $15,000 you racked up on Mastercard?
The only thing that happens if we fail to raise the debt ceiling, is that we don’t accept that new MasterCard. See how that works?
THEY ARE LYING TO ALL OF US TO SCARE US INTO BORROWING MORE!
See this chart? (Source ZeroHedge via US Treasury Department)
It shows what is due in the upcoming debt-ceiling cut off. It does not exceed our revenues let alone our existing borrowing capacity. Also the idea that doing this would negatively affect our credit rating is another BIG, FAT LIE.
How would YOUR credit rating be affected if you were over-extended already, and did not take on any more debt, but just worked at paying down your existing debt?
Conversely, how would YOUR credit rating look if your income and borrowing looked like this as you continued to accept and run up new lines of credit ?!!
The only reason the ratings agencies are threatening the US with a credit rating downgrade, is because the ratings agencies are owned by the Federal Reserve Member banks, and they want more borrowing. They will even try to force it on us, if we won’t accept it willingly. Why? Because that’s how they steal the American public’s wealth and production! If the government stops increasing the borrowing capacity, Americans will keep more of what they earn, and then they would be able to reinvest their money into productive activities that actually increase the GDP.
In the future, will a failure to expand the borrowing capacity mean that government must shrink? Yes, it will, because there is a lot of ‘discretionary spending’ that is not included in the above chart. Spending will need to shrink by about 30-40% of the overall budget (which includes things like haircuts for Senators at $1.2 million, $20,000 toilet seats, $250,000 annual retirement benefits for federal government secretaries, vacations for Obama and family, etc.). Is that trivial? No. Does it mean the US will default on anything? No, it does not. Does it mean that the government will choose things to cut from that chart above (all considered to be essential by the American public)? You bet they’re going to try, and they will make those cuts while trying to retain stupid expenditures like Senators’ haircuts and exorbitant federal benefits.
It is up to the American public to see this ruse for what it is, and to fight for what they believe the government should spend their hard-earned money on. It is well past time for the American public to understand this, and for us to stand up against this tyrannical manipulation.