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And it needs to be passed anyway.

You don't have to like that simple fact.  In fact, the proper response is most probably disgust.  However, the repercussions of it not passing are so severe that even if it cut benefits for every SSI/SSDI recipient in half it would unfortunately and horrifically be necessary to pass.  Again, you may not like that fact but it is true.  Unless your goal is to undermine and destroy the U.S. Government, there is no other option.  That is the goal of teabaggers and their Representatives in the House.  Which is why they are unhappy that any deal was made whatsoever.  Their goal, just like Grover Norquist is to make it so the Federal Government cannot afford to exist.

You may think defaulting on the debt ceiling is preferable but the fall out will be far worse than the "deal" that was worked out.  Starting with over 70 million SS/SSDI, Federal Workers paycheck, VA Benefit, etc checks that will directly removing hundreds of billions of dollars from the economy each month.  What are the tens of millions of people who are counting on those checks to pay for rent, food and other necessities of life supposed to do?  Its not likely that many of them are going to have enough savings to last even a couple of weeks.  Most will not be able to pay rent and risk being evicted.  Even if a deal is quickly reached and their checks are only delayed a few days they will have to pay late fees that for many rentals are extremely high.

Then there are all of the various federally funded projects/programs which will come to a screeching halt.  The failure of the bill reauthorizing the FAA offers an excellent blueprint of the fallout.  All federally funded programs will not have the staff to properly oversee and administer them.  This will mean that all National Parks and Forests will be closed down.  SNAP (Food Stamps) will not be distributed both due to direct lack of funding and staffing.  Public Housing will be in limbo at the very least.  Payments for programs such as Section 8 will cease and anyone on such programs would be in grave risk of being evicted.  Department of Justice, FBI, Federal Marshals, EPA Inspectors, and pretty much every employee of the Federal Government not guarding prisoners in Federal Penitentiaries will be sent home and their jobs not being done.

Then there is the interest rate on the national debt will increase drastically.  This will happen even if a deal that meets approval is put together in the first couple of days.  At the very least the bonds will increase by a couple of percentage points.  Considering the current rate is hovering around 1%, it would likely triple or quadruple the amount taken out of the budget simply to pay the interest on the debt.  Which, in turn, will leave far less money in the budget to be spent upon social programs or cause the debt to increase that much faster.  This will happen even if a new agreement is put in place within a couple of days of the default or the mythical 14th Amendment option is used.

I say mythical because all the 14th Amendment would authorize is the payment of debts.  It does not guarantee salaries of federal employees or the funding of programs such as SNAP (Food Stamps) or Public Housing or Medicare/Medicaid any of the other myriad social programs.  It is even debatable as to whether SSI/SSDI and VA Benefits are required.  

None of which addresses the simple fact that just the interest payments on the national debt is nearly equal to the monthly receipts of taxes and fees.  In order to pay for anything else within the budget would require new bonds.  Those bonds require someone to purchase them.  Very few people are going to risk purchasing bonds when what has been an extremely ideological/party stacked Supreme Court can conceivably rule that the 14th Amendment does not apply or that its scope is limited to only payment of the bonds and interest on the bonds.  Such a ruling would nullify any bonds sold under the auspices of the 14th Amendment.  Any purchasers of those bonds will demand exorbitant interest rates to justify the risks. Making the costs of issuing any such bonds far to expensive for even a short term solution.

So in short, not ratifying the deal currently on the table will force a defaulting on the national debt.  Which will remove more money out of the economy in one month than the stimulus package the put in over the course of two years.  It will cause millions of people to not be able to feed themselves and likely as many to suddenly be homeless.  It will shut down nearly all functions of the Government except Federal Prisons.  The interest payments on the national debt will consume the budget making the ability to fund any discretionary spending almost impossible.  Which is the reason that the teabaggers in Congress don't think its a problem.  As it would effectively cripple the government and force cuts that make the ones in the deal seem paltry in comparison.

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Comment Preferences

  •  Tip Jar (4+ / 0-)
    Recommended by:
    Cedwyn, TBug, atdnext, Drewid

    A person's character is measured by how they treat everyone. Not just your pet group.

    by Tempus Figits on Mon Aug 01, 2011 at 03:18:20 PM PDT

  •  Heh. I remember us getting into it... (1+ / 0-)
    Recommended by:
    Tempus Figits

    Many moons ago, back when Obama was trying to get through the primary. I find it funny I'm now being called an "Obamabot"! :-D

    Anyway, long story short, both my parents are on Social Security and Medicare. And while I'll keep a close eye to make sure there won't be any cuts that hurt their health care, it would have been disastrous if they were to start losing checks and being denied any care altogether. Government shutdown is NEVER a pretty picture.

    •  I didn't think the racism would be this big. (0+ / 0-)

      I knew there would still be some residual but miscalculated at how much was still latent in our society.  

      I still think Hillary would have been worse in obtaining any legislative victories and would have an already set narrative working against her that would have completely derailed any chance at the progress we have seen.  And Edwards turned out to be exactly what my impression of him had been.  Oddly enough, it still put him higher on my list than Hillary as I was pretty sure he was a say anything/do anything to get elected kinda guy and the best route would be to stay on the course that got him there in the first place.

      A person's character is measured by how they treat everyone. Not just your pet group.

      by Tempus Figits on Mon Aug 01, 2011 at 04:14:41 PM PDT

      [ Parent ]

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