Call the Republi-CON Bluff

UPDATE VII: "There is a strange redness to America’s safety net. Why do the regions that need the helping hand elect politicians who want to tear it down?" Read The New York Times, Moochers Against Welfare, which notes that "the vast bulk of entitlement spending goes to the elderly, the disabled, and working families, so any significant cuts would have to fall largely on people who believe that they don’t use any government program. . . . [and so-called conservative] voters would be both shocked and angry if such politicians actually imposed their small-government agenda."


UPDATE VI: The number of bills paid by the federal government each month was misunderestimated. It is not 80 million, it is around 200 million!! Read the Washington Post, The government sends out more than 80 million checks a month - a lot more.


UPDATE V: "You choose: who gets paid (and who doesn't)

On August 2, the federal government will not have enough cash to pay for all of its programs and obligations. The U.S. will take in a total of $172.4 billion in revenue during the month, but its total payments exceed $306 billion, resulting in a $134 billion shortfall. If a debt-limit increase is not approved, the U.S. Treasury will have to choose among 80 million monthly payments and prioritize which programs are funded and which ones are not.

Which programs would you choose to pay? Make your choices" here.


UPDATE IV: What if the debt ceiling is not raised? Who would be paid, and who would not? Ask your favorite Republi-CON. From the Washington Post, With no debt deal, Obama would face tough choices Aug. 3 about what bills to pay:

"On Wednesday night, several Republican leaders were briefed on the Bipartisan Policy Center report as concern grew in the party about the potential impact of not raising the debt ceiling.

According to the center’s analysis, the government would have to cut 44 percent of spending immediately. Through August, the government could afford Social Security, Medicare, Medicaid, defense contracts, unemployment insurance and payments to bondholders.

But then it would have to eliminate all other federal spending, including pay for veterans, members of the armed services and civil servants, as well as funding for Pell grants, special-education programs, the federal courts, law enforcement, national nuclear programs and housing assistance.

After the debt ceiling was breached, there would be no delay in the tough decisions.

On Aug. 3, the Treasury is set to receive about $12 billion in tax revenue — mainly from people paying their taxes late — and is slated to spend $32 billion, including sending out more than 25 million Social Security and disability checks at a cost of $23 billion, according to Powell’s analysis.

Obama could decide to pay half of the Social Security checks and ignore other bills coming due that day, which include $500 million in federal salaries and $1.4 billion in payments to defense contractors.

Or he could decide not to make any Social Security payments and instead hoard tax revenues to pay investors in U.S. bonds. A failure to pay those investors would severely destabilize the financial system, analysts say. (Some also argue that the Treasury could engage in a never-before-tried swap of government bonds that would allow it to pay for Social Security. But Treasury officials say it is highly unlikely to work and may not be legal.)

Aug. 4 could prove even more difficult. The government is slated to spend $10 billion and raise only $4 billion in revenue.

More worrisome for government officials is the $100 billion in Treasury bonds that come due on Aug. 4 and must be paid off. Ordinarily, Treasury would pay off those bonds and issue new bonds.

But if the debt ceiling isn’t increased, Treasury could run into trouble “rolling over” this debt. Ratings agencies are threatening to downgrade U.S. bonds if the debt ceiling isn’t raised. If the bonds are downgraded, many investors — such as retirement funds — can’t buy them.

As a result, there could be far fewer buyers of Treasury bonds and the U.S. government would have to pay much higher interest rates.

Government officials and analysts say a spike in rates would dramatically increase the cost of funding the government and lead to far higher interest rates on mortgages, credit cards and other types of debt."

UPDATE III: Republi-CONs ready to fold, but rae trying to shift the blame for any debt-limit increase to the Naive-ocrats. The question is, will the Naive-ocrats play the chumps again?

"Senate Minority Leader Mitch McConnell moved Tuesday to head off a potentially disastrous U.S. default by offering President Obama new authority to raise the federal debt limit without cutting government spending...The proposal would transform the political dynamics of the debate, placing the entire burden for raising the $14.3 trillion debt limit on Obama. Republican lawmakers would be spared from voting to raise the limit and could shift their campaign for unprecedented spending cuts to the congressional appropriations process, where the risk of stalemate is shutting down the government instead of capsizing the U.S. economy."

But some have taken to calling it the "Pontius Pilate Pass the Buck Act of 2011".


UPDATE II: "Is the Republican Party so blinded by its tax-rate fixation that it misses the chance to exchange a few revenue increases for huge spending cuts?" Read The New York Times, The Mother of All No-Brainers.


UPDATE: What if the debt ceiling is not increase? Eighty million bills are paid by the federal government each month!! Who will not get their federal check?

"Since the Treasury has never had to make these decisions before, no one quite knows how they’ll be made. The BPC estimates a 44 percent drop in federal spending, but can’t precisely estimate where that drop will happen. "

Read the Washington Post, What failure to raise the debt ceiling will look like.

"Bear in mind that G.O.P. leaders don’t actually care about the level of debt. Instead, they’re using the threat of a debt crisis to impose an ideological agenda. If you had any doubt about that, last week’s tantrum should have convinced you. Democrats engaged in debt negotiations argued that since we’re supposedly in dire fiscal straits, we should talk about limiting tax breaks for corporate jets and hedge-fund managers as well as slashing aid to the poor and unlucky. And Republicans, in response, walked out of the talks.

So what’s really going on is extortion pure and simple. As Mike Konczal of the Roosevelt Institute puts it, the G.O.P. has, in effect, come around with baseball bats and declared, 'Nice economy you have here. A real shame if something happened to it.' . . .

And the reason Republicans are doing this is because they must believe that it will work: Mr. Obama caved in over tax cuts, and they expect him to cave again. They believe that they have the upper hand, because the public will blame the president for the economic crisis they’re threatening to create. In fact, it’s hard to avoid the suspicion that G.O.P. leaders actually want the economy to perform badly.

Republicans believe, in short, that they’ve got Mr. Obama’s number, that he may still live in the White House but that for practical purposes his presidency is already over. It’s time — indeed, long past time — for him to prove them wrong."

Read The New York Times, To the Limit.

As I stated before, the Naive-ocrats have been too stupid to call the bluff -- give the public what it claims it wants until they don't want it anymore.