Republican leaders STRUGGLE to find votes to up debt limit

Good.  moneywhirl

That’s the headline we’re faced with this week:

Congressional Republicans say they are short of the votes for raising the debt limit and avoiding a first-ever government default. With barely a week before deadline, there’s no plan on what to do.

It’s a huge problem for House Speaker John Boehner and a potential nightmare for his successor-in-waiting, Rep. Paul Ryan, R-Wis.

GOP leaders promised Friday that the House will act next week — just days from a Nov. 3 deadline. Increasing the government’s $18.1 trillion borrowing cap so that it can continue to pay its bills in full and on time would prevent a potential meltdown in the financial markets and save the Republican Party from presiding over a default on U.S. obligations.

Treasury Secretary Jacob Lew has warned lawmakers that the government’s ability to use accounting steps to pay its bills for veterans, Social Security recipients, federal employees and others will run out early next month.[…]

Nightmare. Huge Problem. Really?momoney

Here’s a different perspective on the matter — making the case that it’s IMPOSSIBLE for the US to default: 

With so many economic, political, and social problems facing us today, there is little point in focusing attention on something that is not one. The false fear of which I speak is the chance of US debt default. There is no need to speculate on what that likelihood is, I can give you the exact number:

there is 0% chance that the US will be forced to default on the debt.

We could choose to do so, just as a person trapped in a warehouse full of food could choose to starve, but we could never be forced to. This is not a theory or conjecture, it is cold, hard fact. The reason the US could never be forced to default is that every single bit of the debt is owed in the currency that we and only we can issue: dollars. Unlike Greece, we don’t have to try to earn foreign exchange via exports or beg for better terms. There is simply no level of debt we could not repay with a keystroke.

Don’t take my word for it. Here are just a few folks from across the political spectrum and in different walks of life saying the same thing:debt

“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.” Alan Greenspan

“In the case of United States, default is absolutely impossible. All U.S. government debt is denominated in U.S. dollar assets.” Peter Zeihan, Vice President of Analysis for STRATFOR

“In the case of governments boasting monetary sovereignty and debt denominated in its own currency, like the United States (but also Japan and the UK), it is technically impossible to fall into debt default.” Erwan Mahe, European asset allocation and options strategies adviser

“There is never a risk of default for a sovereign nation that issues its own free-floating currency and where its debts are denominated in that currency.” Mike Norman, Chief Economist for John Thomas Financial

“There is no inherent limit on federal expenses and therefore on federal spending…When the U.S. government decides to spend fiat money, it adds to its banking reserve system and when it taxes or borrows (issues Treasury securities) it drains reserves from its banking system. These reserve operations are done solely to maintain the target Federal Funds rate.” Monty Agarwal , managing partner and chief investment officer of MA Managed Futures Fundbig spender

“As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.” Federal Reserve Bank of St. Louis

“A sovereign government can always make payments as they come due by crediting bank accounts — something recognized by Chairman Ben Bernanke when he said the Fed spends by marking up the size of the reserve accounts of banks.” L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City and a Senior Scholar at the Levy Economics Institute

Mind you, that doesn’t mean there might not be other economic or political consequences. Inflation and currency depreciation, for example, are possibilities. Also from Dr. Wray:biggovt

“Government needs to be concerned about pressures on inflation and the exchange rate should its spending become excessive. And it should avoid “crowding out” private initiative by moving too many resources to our public sector. However, with high unemployment and idle plant and equipment, no one can reasonably argue that these dangers are imminent.”

 

[…]

The ruling class is petrified that their bottomless wallet and vote-buying / job-securing scam will screech to a halt (or at least be slowed).  The writer above makes an excellent point: the government is not set up like our household budgets.  We can’t print more money when we run out. 

This is like a broken record.  We elected these people to get our financial house in order.  Yet, we keep getting told we need to have an increased debt limit.

Holding the debt limit in place, while implementing some budget austerity, is a hell of a lot more responsible than continuing to pile on currency-crushing debt that drags down our country and our children’s future. 

6 thoughts on “Republican leaders STRUGGLE to find votes to up debt limit

  1. Congressman Walter Jones is speaking out to stop the debt ceiling increase, and writing op-eds for newspapers in his district on the subject:

    http://www.beaufortobserver.net/Articles-NEWS-and-COMMENTARY-c-2015-10-23-280177.112112-Walter-Jones-on-increasing-the-debt-ceiling.html

    I wonder where the rest of the NC delegation stands? Including our two Senators?

    Walter Jones has for many years stood up and voted against all debt ceiling increases, He is one of the most dependable opponents of big spending in the entire Congress.

    In contrast, Paul Ryan has always voted FOR debt ceiling increases,

  2. “Holding the debt limit in place, while implementing some budget austerity, is a hell of a lot more responsible than continuing to pile on currency-crushing debt that drags down our country and our children’s future.”

    Holding won’t be voting to be holding the debt limit in place. 😉

  3. Yep George Holding is one of the biggest frauds in the NC delegation. He consistently states: He will cut, cut, cut federal spending. But, HE NEVER votes that way. George Holding brought us the Cromnibus! He is just another RINO liar!

  4. Having witnessed the tantrum thrown by this administration to inflict unnecessary pain upon the citizenry during the last government shutdown, they will do everything possible to cause mass suffering if their credit card spending limit is not increased. Obama would default just to punish us for our insubordination, and our Representatives and Senators will do nothing to stop him.

  5. As North Carolina’s next U.S. Senator, I will NEVER vote to increase spending, I will NEVER vote to increase taxes, and I will NEVER vote to increase the debt ceiling. Period.

    I will NEVER vote for Mitch McConnell as Senate Majority Leader, and he will NEVER dictate or influence any of my votes in the Senate!

    Larry Holmquist
    http://www.holmquist4senate.com

  6. Unfortunately, we are in the era of Obama’s Imperial Presidency. Even though Republicans have the majority in both houses, they have been neutered and turned into Obama’s Wusses.
    The other problem is that 98% of the Main Stream Media – (other than Fox) is in Hussein’s corner, so if the Republicans stand their ground (even though it may be Obama’s fault), his sycophants in the MSM will blame those “Wascaly Wepublicns” for it.
    So of course they are going to raise the debt limit. You and I have to balance our household budgets. But the Federal Government (those Washington scum bags), get to borrow and spend money we don’t have.
    The other question is, who do we owe this “national debt” to?
    Oddly enough, the largest domestic holder is the Social Security Administration. That’s right! The Washington scum bags have been borrowing our FICA taxes from the SSA, spending it on something else, and giving an IOU to the Social Security Admin. ERGO: THERE IS NO MONEY IN THE SOCIAL SECURITY TRUST FUND, just IOU’s from Congress.
    The other largest holders of the US national debt are China and Japan, and such US friendly countries as the Arab Oil States, Iran, Iraq, and Libya (yes, that’s right).
    (Any wonder why Obama bows to their leaders)?

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