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Skepticism Grows On Debt Limit Deadline

From a missing the point intentionally Reuters:

Skepticism grows on Geithner’s debt limit deadline

By Tim Reid And Rachelle Younglai Tue May 17, 2011

WASHINGTON (Reuters) – U.S. Treasury Secretary Timothy Geithner is facing growing criticism for his changing predictions on when the country might face a debt default, shifts that have led some Republicans to discount his dire warnings that the debt limit must be raised soon.

Oh, those crazy ‘default deniers.’

Since January, Geithner has changed his forecast of when the U.S. would hit its borrowing cap, and the final deadline for raising the debt limit, at least four times — fueling a belief among rank-and-file Republicans that his latest August 2 deadline is artificial and can be ignored.

Some Democrats are increasingly worried that the changing calendar has been counter-productive, complicating efforts to get the $14.3 trillion borrowing cap raised because many conservative Republicans do not believe the country will start to default for many months.

Notice how Reuters tries to make it sound like the only reason the Republicans are skeptical is because Mr. Geithner and company keep changing the ‘drop dead’ date. But that has nothing to do with it.

The skepticism is not about the debt limit deadline. The skepticism is about the claims that if we don’t raise the debt limit the economic world as we know it will cease to exist. Because that simply is not true.

The skeptics, the "default deniers," simply don’t buy into the claim that we can’t keep the debt limit in place and simply reduce spending. Rather than raise the bridge, they want to lower the water.

They believe that the government could and should cut its spending and re-order its priorities and cut its spending enough to get back under the current debt ceiling. After all, that is the reason there is a debt ceiling in the first place.

"You can only cry wolf so many times," a former economic official in the Bill Clinton White House told Reuters. "If you are jumping from May to July to August, you can see people thinking that maybe you can jump from August to October.

"If people believe you can stretch this to October — and the truth is, we really can’t — we’re in big trouble."

Notice that there is no effort made to explain why we can’t go on under the current debt limit. The fact of the matter is that we can. We will just have to start cutting spending, at about a rate of $118 billion dollars a month, until we get down to what we can spend under current the debt limit.

That is quite doable. In fact, that is exactly what they are doing all over Europe and elsewhere around the world. And their economies are all the better for it.

Geithner first began warning in January of "catastrophic" consequences if the debt limit is not raised by Congress, saying then that the borrowing cap could be hit as early as March 31.

That prediction soon changed to April 5, but it was not until Monday — May 16 — that the ceiling was officially reached as the latest government bond sales were settled.

In early April, Geithner also said the drop-dead date for a debt limit rise, when the U.S. would begin to default on its obligations, was July 8. This month he changed that to August 2.

Rather than wasting all of this time trying to calculate when the debt limit will be passed, why isn’t the administration or Congress doing anything to try to get us back down under the spending limit?

The Treasury says it can use "extraordinary measures" such as dipping into government pension funds to fend off default until August.

Why are we "dipping into government pension" instead of coming up with ways to immediately reduce government spending? Why not start identifying programs and agencies and workers that can be quickly cut to bring federal spending back down to under the debt ceiling?

How come this kind of a remedy hasn’t even been part of the debt limit discussion so far?

Many conservative Republicans in the House of Representatives, especially those affiliated with the small-government Tea Party movement, say that Geithner and the White House are trying to panic them into raising the debt limit.

They also contend that the Treasury has other options to continue meeting the country’s obligations, such as selling assets including gold reserves and government land.

How preposterous. There are plenty of other, more viable options besides selling off our gold or land. And Reuters damn well knows it.

"There is no certain day," said congressman James Lankford, a member of the fiscally conservative Republican Study Committee. "It’s a moving target. Even if August 2 is passed, Treasury has the tools in its back pocket to keep us from defaulting."

[Congressman James Lankford, a member of the fiscally conservative Republican Study Committee said,] "Treasury has done a good job of trying to increase the panic, rather than giving us solutions."

In fact, the administration and the media and the rest of the Democrat Party are pretending there is no other solution except raising the debt limit. And that is simply not true.

After all, the Democrats must have thought there were other remedies when they, almost to a man, voted against raising the debt limit back in 2006. But suddenly that is an even impossible to imagine such an alternative now.

So it must be possible. Otherwise, why would such great Americans like Barack Obama and Harry Reid and Nancy Pelosi have voted against raising the debt limit back in 2007?

In reality, the Democrats wanted to use the debt limit to cut the spending on the war in Iraq. Well, if we can cut the spending for our military when we are in the middle of a shooting war, we sure as hell can cut it now.

Most economists and financial analysts agree with Geithner’s warning of a financial crisis if the debt limit is not raised. If that occurs, the fear is that investors, worried about the creditworthiness of the United States, will stop buying U.S. Treasury bonds, which will drive up interest rates and plunge the economy back into recession.

Where were these economists and financial analysts back in 2006? Where were the dire warnings of economic Armageddon then?

In reality, this supposed consensus on on the need to raise the debt limit reminds us of the so-called consensus on man-made global warming warming. Which is to say, there is no consensus at all — apart from the consensus in the media to advance the Democrat agenda at any price.

This article was posted by Steve on Wednesday, May 18th, 2011. Comments are currently closed.

7 Responses to “Skepticism Grows On Debt Limit Deadline”

  1. proreason says:

    This debt limit thing is the all-time best example of the power of the Big Lie.

    Every person in the world knows that the solution to reaching a debt limit is to stop spending. It’s not subtle, nuanced, difficult to understand, confused by climate science, or something that requires a phd to understand.

    Yet here we are with millions of people convinced that we simply have to go on borrowing money at a clip that everybody agrees will destroy the United States.

    It’s surreal.

    • Rusty Shackleford says:

      It is surreal because the analogy only works if there is a limit to the money supply. If the ruling class can’t acquire more real money, they just print it. Ipso-facto, no debt ceiling either real or imagined=lack of fiscal discipline. The cake that serves itself.

    • Right of the People says:

      You have to look who we’re dealing with. The first virtual reality president and his merry band. After all in the video game world Spike exists in, if you fail, you hit the reboot button and start over, no harm, no foul. Nobody has told him in the real world you can’t just hit Ctrl+Alt+Delete when things get hairy.

    • untrainable says:

      We can’t be out of money, we still have checks! An old joke that is now too real and no longer funny.
      One more example of the 3rd grade mentality of the anti-american elite class. (apologies to 3rd graders everywhere) You first have to understand what responsibility is in order to be responsible. We can’t expect a bunch of fiscal illiterates to understand consequences because they have never had to face any. Oblamer blames everyone but himself, for in his own mind he can do no wrong. Geitner blames Turbo Tax because he actually thinks we will believe him. And they all blame racism for anything they can’t fit under another umbrella.

      As soon as people start holding these elitist’s feet to the fire and hold them responsible for the fiscal nightmare we all face, they will all start screaming for their mommys. Then Hillary can walk in, blame the vast right wing conspiracy, give them all a cookie and pat them on the head. Losers.

  2. oldpuppydixie says:

    Never fear. Republicans will surely CAVE at the 11th hour…unless they do it sooner, of course.

    • Rusty Shackleford says:

      I’ll have grounds
      More relative than this—the play’s the thing
      Wherein I’ll catch the conscience of the King.

      Hamlet Act 2, scene 2, 603–605

  3. Mithrandir says:


    “The Can Stops Here!”

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