Dakota Beacon

Think about it. The United States, for all the media hype, is not about to default on its financial obligation, that is, the debt to its creditors. No default on the US debt obligation? How can this be? Hasn’t CNN, Fox, ABC, CBS, NBC told us the truth and we must believe it?

The United States does not have a shortage of money with which to pay its debt. The US has a shortage of executive and congressional discipline to live within its means. I would have said “live within its budget,” but the Democrat-controlled US House, for political purposes, chose not to prepare a budget last year. Nor has Senator Conrad’s Senate Budget Committee adopted a budget.

There is much less chance that the United States will default on its debt obligation than for congress and the president to create an even greater mess by imposing “fixes” to “solve” a phony “debt crisis.”

Don’t put the cart before the horse. Set aside, for a moment, the deficit. (Those are the dollars we spend each year above and beyond what we take in.) Set aside, also, thoughts of the debt. (Those are the shortfall dollars accumulated year after year by deficit spending.) Focus instead on the tax revenue the IRS takes in.

The US receives roughly $200 billion in taxes each month. The interest on the national debt is approximately $20 billion a month. (See Treasury Direct -- treasurydirect.gov and the American Institute for Economic Research -- aier.org.) There is more than enough tax revenue each month to pay the monthly interest on the debt. If the creditors get paid first, as they should, we won’t default on our debt -- unless a “debt crisis” is manufactured in order to generate political capital.

Pay interest on the debt first; fund everything else second. If the president and congress are serious, they could initiate and debate spending cuts without increasing the debt ceiling. A budget baseline would be a good place to start.

So why all the bickering? It doesn’t take a political strategist to see what’s coming.

A tax hike is out of the question. Period.

Raising the debt limit is a recipe for expanding government and government control over people’s lives. As noted, congress and the president have no stomach for spending restraint. More authority to borrow means more money to spread around bribing constituents and buying votes. In any case, there may not be enough votes in the US House to agree with a debt ceiling increase.

No crisis, especially a manufactured crisis, will go to waste. The president, in all probability, will fabricate a political advantage by blaming conservatives in the US House and Senate for failing to increase the debt limit he demands.

A punishment for debt ceiling opponents might look like this. When congress fails to pass a debt ceiling increase, then the Obama administration, through Treasury Secretary Geithner, begins to defund government programs. Federal spending cuts would be implemented on a targeted basis. Dollars to states whose congressmen and senators voted against a debt ceiling increase would bear the brunt of the spending cuts. After all, an administration that would sue a state because the feds don’t like that state’s law or close down oil drilling in the Gulf of Mexico or implement Cap and Trade regulations through the EPA to skirt congressional objections or impose mandatory health care on states who neither want it nor can afford it surely would not hesitate to defeat legislators by blaming them for spending cuts. It’s all about shifting the congressional balance of power.

As a one-term senator, Barack Obama voted against raising the debt limit. In his March 20, 2006, floor speech he said, “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the US Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies....Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’...America deserves better.” That’s when Bush was president.

So, what’s changed? A re-election bid for a second term, of course. Obama is looking for a way to stick it to the Republicans.

Bottom line: The US does not have to default on its debt -- unless the president decides it is in his political interest to do so.

Dennis M. Patrick can be contacted at P. O. Box 337, Stanley, ND 58784 or (JavaScript must be enabled to view this email address).