Saturday, January 12, 2013

Caroline Baum: Obama’s phony default drama

New York Post

Excerpts:
  • The United States of America isn’t going to default on its debt
  • Why? Because the income taxes withheld from most of our paychecks each month exceed the interest the Treasury owes on its debt outstanding.
  • If it can’t issue new debt, it can roll over maturing debt.
  • I am not suggesting that a failure to raise the debt ceiling wouldn’t be disruptive...Social Security payments might not get processed. Medicare and Medicaid providers wouldn’t get paid. Neither would those serving in the military.[emphasis added]

Comment:

If you are going to lose anyway, why not accomplish something useful?  Instead of increasing the debt and paying for it by printing money from thin air, use that coin to pay off debts that the government owes itself.  One of these is the Social Security Trust Fund.  Make it a requirement that any coin used for those purposes must go to fund that account.


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