Note, this is updated from my original post of July 2011.
This morning I started with a GoogleSearch for “”August 2nd Default”” and zipped up 14 million returns.
Who did not KNOW this would be coming?? The Left is already well along on developing it’s Blame Strategy.? Beginning with this:
“The world as we know it may very well end on August 2nd. This won’t be the end of the world in a metaphysical or spiritual sense, but rather in a financial and economical one because of the incredible, almost unbelievable stupidity of the extreme members of the Republican Party. These wing-nuts…”
If you care to read more of that diatribe, Go There>
I submit that quote not because the author has any truth to provide, but to show you all the spin which has already begun.
I have been saying “Oh yeah, the Republicans will give up their bluster about refusing to raise the debt limit”, because the Left will spin it all to make it seem as though the Republicans are at fault for default and the collapse of America”. So here it begins already, and I can say that “I Told You So!”.
In a nutshell, here’s the problem:
The FY deficit is $1.65 Trillion – that is the DEFICIT for this FY ending September 30th. The only way of covering that shortfall is by allowing the Treasury to sell more debt, that being nothing more valuable than another issue of fiat money. TheFed “buys” that debt as “agent” for the Treasury and resells it (at some discount rate) to others, being investors, businesses with excess cash, other countries, etc.
The Federal revenue (from taxes) is only about 70% of the obligations, which means that 30% of everything the Treasury pays out must be borrowed. If the debt limit of $14.3 Trillion is not raised, it has been calculated that on August 2nd the Treasury MUST default on 30% of it’s payment obligations.
There are two ways of avoiding raising the debt limit. Whether for a Nation or for a company, the only rational solution is to immediately cut expenditures to match revenue, by NO LESS than the amount remaining due this Fiscal Year. Keep in mind that will take care of ONLY a relatively short period of time – next FY it starts all over again!
That means defunding favorites like the EPA, OSHA, FBI, NEA, TEA, AgDept, Czars, Justice Dept, ICE, IRS, Foreign Aid, FEMA, FCC, ATF, BLM, BIA, FTC, ZeroCare, NASA and ALL PORK,until the outgo is equal to OR LESS THAN revenue. NEVER forget that the only place Gov gets revenue is from YOU! Why send them any more to maintain the charade? This Gov is beyond saving, and Good Riddance!
In case you’ve forgotten, thus far Congress has managed not $1.65 Trillion in cuts, but only a token $39 Billion.
The other way? Last week Obama came forth with another non-solution, asking for a $600 Billion tax increase as a “Reward”for raising the debt limit. Look, Stupid, when you are up to your ass in alligators you don’t feed them, you get the hell out of the swamp!
So what will happen? The Republicans will cave, because they’re too damn chicken to bite the bullet and get real about the coming economic collapse. They will raise the debt limit or perhaps even agree to Remove that pesky detail. It won’t be on Principal or rational economics, it will be simply that they don’t want to be blamed for the collapse.
Now despite that the worst of this ballooning debt is the fault of the Democrats a.k.a. Collectivists, since 2006 and made much worse since the election of pseudo-prez in 2008, rest assured that the Left will spin the blame for any default to the Republicans, who will be unequal to the challenge. Therefore the debt limit WILL be raised, the buildup to collapse will continue but be a bit delayed, and We the People will continue to be screwed by this Government We so revere.
In case you’re wondering, that collapse became unavoidable on the Day of TARP, and we have seen nothing but “tinkering” since that day. The tinkering has continued with bailouts, stimulus, and increases in the Debt Limit, so nothing has improved while the debt continues to pile up.
This collapse will be much more than another “recession dip”, it’s going to be The Great Collapse. This irrational Government of Force will simply disappear. The Keynesians and the Left and the grey Middle RINOS and other confused politicos will disappear along with their Government (I wrote “Their” government, as it is most certainly Not “Our” government! )
Now then, this predicament is world-wide, as virtually every “Nation” has it’s very own Government of Force, by which all have buried themselves in impossible debt payable in it’s own Fiat Money. Where on this planet is this not true? As America’s government falls, so will all governments on this Planet Earth.
If there is a Question here, it is simply WHO will prevent this; HOW and WHEN?
Will the “Gods” finally show up to unravel the tangled mess they created, or allowed?
Will mankind just continue self-abuse by “creating” more Governments, with more total Powers of Force, choosing “new” Rulers — just like the Old Rulers — until mankind finally becomes extinct? Are you ready now to help formulate a Voluntary System WITHOUT Governments and “Nations” which Sacrifices it’s “citizens” to make Wars — pure Liberty in which then-truly free & truly-sovereign human beings chose for themselves within a truly-free market — in which real Humans join together in voluntary entities they create to accomplish common objectives of their own volition, whatever they may desire.