Beaver County Reds – 10/15/13

“With the ugly government shutdown headed into its third week, Senate leaders are said to be close to a deal that could avert the unimaginable – the default on U.S. debt that could easily drive the world economy into depression.”

[RWC] False.  Neither the “shutdown” nor failure to increase the debt ceiling means default.  If it did, I’m sure then-Sen. Barack Obama (D-IL) would not have voted against a debt ceiling increase as he did in 2006. <g>

President Obama’s own proposed budget (Table S-5, page 189) estimates interest on our debt for fiscal year 2014 will be $223 billion ($18.6 billion/month).  That same budget estimates revenue will be $3.0 trillion ($250 billion/month).  This means debt service for FY 2014 is “only” 7.4% of total revenue.  As for principal, rolling over a bond requires no outlay.  Should an existing borrower want to cash out, a new borrower effectively pays the old borrower’s owed principal and again there’s no or little net outlay by the government.  If the U.S. defaults on its debt, it will be only because Mr. Obama chose not to pay bondholders despite having far, far more than enough revenue.  Mr. Borosage and BCR management know this, as does the press that keeps talking about default.

The “information” in rest of this piece is of the same quality as the first paragraph.  Nevertheless, I suggest you read it to see what the leftist elite tell their rank-and-file followers.