Newest Fox News piece: Seven Myths About the Looming Debt-Ceiling 'Disaster'
If Congress and the president don't raise the debt ceiling, the consequences will be disastrous, politicians and pundits tell us, -- the equivalent of an economic Armageddon. And President Obama warns that the consequences are so dire that he cannot possibly tolerate any delay in making an agreement. He announced yesterday that any debt deal must be completed by today, July 15th.
According to Treasury Secretary Timothy F. Geithner, failure to raise the debt ceiling limit will cause the United States to default and "cause a financial crisis potentially more severe than the crisis from which we are only now starting to recover.”
On Thursday, he renewed these warnings. And President Obama alarmed retired Americans this week: "I cannot guarantee that those [Social Security] checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it."
But the list of terrible things to come, if the government is stopped from continued deficit spending, goes on. Failure to raise the ceiling, it is warned, will dramatically raise mortgage interest rates, cause housing sales to plunge, create panic on world financial markets, and destroy the value of the dollar.
Austan Goolsbee, Obama's head of his Counsel of Economic Advisers, went so far this week as to blame the continued slow economic recovery on those few politicians who are against raising the debt ceiling. "[I]t's important we remove this wet blanket of uncertainty that is permeating the private sector where they don't know that the government -- there are people actively advocating that the government declare it's not going to pay its bills," he told MSNBC. Yet, the slow recovery has been going on for over two years, well before Republicans obtained control of the House of Representatives.
A new CBS News/New York Times poll finds that Americans oppose increasing the debt ceiling, by a 69 to 24 percent margin.
Mr. Obama dismissed this finding recently and, as usual, he believes he knows better. According to him, Americans just don't understand the complexities of the arguments: "Let me distinguish between professional politicians and the public at large. The public is not paying close attention to the ins and outs of how a Treasury (bond) auction goes. They shouldn't. . . . They've got a lot of other things on their plate. We're paid to worry about it. . . . Now, I will say that some of the professional politicians know better. And for them to say that we shouldn't be raising the debt ceiling is irresponsible. They know better."
But the general public is right. There is an overload from all the doomsday predictions. Earlier this year, before the debt limit was hit on May 21, the Obama administration already used the same scare tactics.
Here's a look at seven myths that the Obama administration is pushing on the American people: . . .
Obama at his press conference today was asked what he was willing to cut in spending (at 11:27 into the video): "You know, I am not going to get into specifics." At 13:20, "But if you are trying to get to 2.4 trillion without any revenue then you are effectively gutting a whole bunch of discretion domestic spending that is going to be too burdensome, that is not something that I am going to support." Note that this is $2.4 trillion out of $46 trillion.
Fox News has an online poll asking people whether the threat of default is a "Scare Tactic." The poll is available here. This discussion by Rove is interesting:
Note: I have been asked about the 14th Amendment claim. For those who need more than the link in the piece, the Supreme Court decision in Perry v. United States (1935) ruled that any legally incurred debt must be paid.
The Fourteenth Amendment, in its fourth section, explicitly declares: "The validity of the public debt of the United States, authorized by law, . . . shall not be questioned." While this provision was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War, its language indicates a broader connotation. We regard it as confirmatory of a fundamental principle which applies as well to the government bonds in question, and to others duly authorized by the Congress, as to those issued before the Amendment was adopted. Nor can we perceive any reason for not considering the expression "the validity of the public debt" as embracing whatever concerns the integrity of the public obligations. . . .