Because all know that funds are, and will always be, available to pay interest on bondholder debts
President Obama’s default drop dead date pronouncements could precipitate a financial crisis that is unjustified based upon the actual funds available to pay interest on the debt.
The holders of U.S. Treasury bonds care about one thing: Being paid interest owed to them on time. They know that the U.S. Treasury receives approximately $200B in tax receipts each month and they know that debt service interest payments due each month are approximately $29B each month, or less than 15% of total cash on hand.
Further, these creditors know that there exists no “default” date, after which America would automatically and inevitably default on debts owed to them. So why would the Moody’s credit rating agency threaten to lower the supreme AAA credit rating that the United States of America has maintained throughout its history? Why would world financial markets go wobbly as Timothy Geithner’s faux August 2 default date approaches?
Could it be that Moody’s and the holders of T-Bills have lost confidence in the maturity and good judgment of President Barack Obama?
Surely they know that Obama and Geithner are proficient at basic arithmetic, Obama’s still-hidden Ivy League academic record and Geithner’s personal income tax transgressions notwithstanding. Yet, they hear the Chief Executive and his Administration playing a game of chicken with Republicans in Congress over, not just their debt service payments, but even refusals to guarantee payments Social security payments to the nation’s elderly, disabled and orphan survivors.
We know that there are, and always will be, for the foreseeable future, more than enough funds to pay monthly costs for:
- Interest on the national debt ($29B);
- Social Security retirement, disability and survivors benefits ($49B);
- Medicare and Medicaid ($50B);
- Military personnel ($3B); and
- Veterans Administration obligations ($3B), with tens of billions ($37) to spare for federal law enforcement, border patrol and what remaining government functions the Obama Administration deems essential, even if the debt ceiling is not raised.
Yet, this is the same administration that threatened not to pay the armed forces in the case of a government shutdown last Spring unless funds were restored to Planned Parenthood abortion mills.
Yes, everyone on Capitol Hill, at 1600 Pennsylvania Avenue and in foreign banks knows that there are no dates on, before or after August 2, 2011 when America will not have the money to pay its bills.
But they also are beginning to suspect that the man responsible for actually writing the checks is willing to precipitate financial disaster on his own country merely for his own political purposes.
There are consequences to putting community organizers in charge of the nukes and our money. We the People are reaping the whirlwind of an ObamaDemRecession aftermath, already devastating for the unemployed, underemployed and small businesses whose customers have no money with which to buy their goods and services.
It can get worse and it appears that if Obama doesn’t get his way, he is willing to make it so. In fact, whether we had this debt ceiling issue or not, the fact of the huge debt we already owe could cause markets to dump American dollars any day. The laws of Nature have not been suspended.
But when you add to Nature’s laws an unnaturally irresponsible actor in the role of the most powerful man on Earth, prepare for the deluge.
I just hope that Congressional Republican leaders will begin to educate their constituents, especially including seniors, from whom the threat to their welfare and security comes: Barack Hussein Obama
Legal Editor – The Minority Report
Atlanta Law & Politics columnist for Examiner.com
“One man with courage makes a majority.” – Andrew Jackson
More DeVine Gamecock rooster crowings at Modern Conservative, Hillbilly Politics, Unified Patriots, Political Daily and Conservative Outlooks. All Charlotte Observer and Atlanta Journal-Constitution op-eds archived at Townhall.com.