Sadly folks, the debt-ceiling debate is still unresolved since I posted last and personally I am disgusted by what is going on in Washington D.C. over the past week..to the point I couldn't find the inspiration to post.
Thankfully the good people at PolitiFact don't take as much time off from posting as I do and are trying their best to sort through the bull and get to the real truth of the debt-ceiling debate.
And today they posted an article that I think is very helpful to those who want to understand the seemingly counter intuitive argument that the government will not go into default after August 2nd. In my previous post, I pointed out that Michelle Bachmann was a supporter of this belief, claiming that the government has enough revenue coming in to cover the most important payments...But there is the real flaw in the argument. There isn't nearly enough money coming in per month to cover ALL of the payments.
According to the Bipartisan Policy Center, the government will bring in roughly $172 Billion for the month of August. At the same time, the government has $306 billion in "bills" to pay, meaning that without an increase to the debt ceiling (which allows the government to borrow money above the current $14+ trillion level) the government would be unable to pay some $134 billion for that month.
So in theory, the government could prioritize what bills get paid and what bills don't such as Social Security, Medicaid, Medicare, Pentagon Vendors, Unemployment benefits, and Interest on the Debt. Choosing to pay those bills would require the entire month of August's revenue and as such ALL other government programs will have no funds for the month of August and beyond. This includes: federal employee pay, IRS refunds, the entire Department of Justice (including the FBI), Active military duty pay, Veterans Affairs programs, Pell grants and many others.
And there lies the problem, people like Michelle Bachmann assume that the financial markets and credit lenders (who have already threatened to downgrade US credit) will be OK with the US only paying SOME of its bills as and that as long as some bills get paid the US will not technically go into "default".
Now hopefully, if the Debt Ceiling debate pushing past the August 2nd deadline, a compromise will follow sometime soon after, hopefully limiting the damage done to the United States' credit in the financial world but the damage will still be done. Now how extensive this damage will be no one truly knows but the risk of it alone should make every American stand and take notice and should a compromise not be reached in time and the financial markets tanks and creditors downgrade US credit, let us remember the idiots and twits who claimed that everything would be just fine if the debt ceiling isn't raised..Because I sure as hell will.
Finally, I would like to give all those Americans who have been calling and emailing their members of Congress this week, to the point that the switchboards are overrun with phone calls and the government's servers are crashing because of the sheer volume, a pat on the back. This flood of political participation started almost immediately after the President and Speaker's respective speeches last night and shows American are really watching this debate and want to see where their elected representatives stand on the issue and therefore are holding them accountable. Keep it up people!