Below is a list that was put together by Tea Party Patriots. If you agree with them please consider signing their petition.
We absolutely will not default if we prioritize our spending. President Obama and politicians of both parties in DC want us to believe that America will default on our obligations if we do not raise the debt ceiling again. They think that we don’t understand the situation well enough, so we should just allow them to do what they want to do. They believe that we are so naïve that we will believe them when they promise to make spending cuts… someday.
If their big reason for raising the debt ceiling is the claim that we will default, then we’ve got good news for the politicians!
• Tax revenues for this year are projected to be around $2.2 trillion.
• Interest payments for this year amount to approximately $300 billion.
• If we pay the interest first, that leaves us with about $1.9 trillion to spend on our most important priorities, and we avoid default.
• If we enact Senator Toomey’s Full Faith and Credit Act (S. 163) directing the Treasury to pay principal and interest on the debt held by the public before all other obligations it would ensure that the nation does not default.
Think of it this way:
Your annual income is $44,000. Your annual interest payment on your debt is $6,000. This would leave you with $38,000. Now if you had been living beyond your means for a while it might be hard to go back to living on that $38,000. But you would make it work.
And that’s the difference between you and a bunch of spend-aholic politicians.
You would cut out the unnecessary expenditures, the things you’d like but just can’t afford, and you would probably work to get out of debt.
If America defaults on her obligations, make no mistake about it… IT WOULD BE DELIBERATE.
Mr. Timothy Geithner says that we need to consider tax increases along with raising the debt ceiling. The truth is that the power to prioritize our spending is in his hands. It is no wonder that Mr. Geithner of all people would be the one to say that we must borrow more money to pay our debt obligations. He is no stranger to skipping out on paying his debt obligations. Mr. Geithner, this time it is not your money… this time it is the American people’s money!
Tell Congress that you want them to pass the Full Faith and Credit Act (S 163 in the Senate and HR 421 in the House) so that America’s credit doesn’t hang in the balance while politicians do their familiar dance with each other. The President, the Secretary of Treasury, and Congress all have the ability to secure our credit.
Our states prioritize their spending by applying the first portion of their revenue to their debt. The federal government can, and MUST, do the same.
If they raise it, they will spend it.
Politicians in both parties want us to see the concern in their eyes and hear the emotion in their voices as they speak of an “unsustainable path” of spending that we are on. Unfortunately for them, we know the difference between words and actions. And we know, from experience, that if they get their hands on more money, they will spend it. Therefore, if we raise the debt ceiling by $2 trillion, as they want to do, all we can say for sure is that we will be $16.3 trillion in debt instead of $14.3 trillion. How exactly does that remove us from the unsustainable path?
• The debt ceiling has been raised 10 times in 11 years. In fact, since Congress enacted the first debt limit, they have never failed to raise it.
• Since World War II, government spending, on average, accounted for around one-fifth, or 19.6 percent, of GDP. Today, federal spending accounts for over one quarter, or 25 percent, of GDP.
• The national debt in 2006 stood at approximately $8.5 trillion. The debt is now over $14 trillion.(It’s actually over $100 trillion if we count unfunded liabilities.)
The federal government spends over $114,000 per second. The median household annual income is approximately $49,777. Think about this. If your annual family income were $50,000, you would spend about one-sixth of one cent per second. It would take your family around six seconds to spend one penny! In the same time it takes your family to spend one measly cent, the federal government will spend over $700,000. And in the politicians’ eyes, it is your family that should fork over even more money every year.
(Just for fun, how much do the “wealthy” spend per second? You know, those greedy people that need to “pay their fair share” that earn $250,000 annually? Yeah, they spend four-fifths of one penny per second – not even one whole cent per second. And keep in mind that most families don’t even spend their entire salaries. Our estimations don’t take into account taxes or money not spent due to savings and retirement accounts, etc. So our numbers here only reflect a hypothetical family that could spend every penny they earn.)
Doesn’t this make you wonder what they’re spending all that money on? Wouldn’t you like to know if all of that spending is legitimate? When the government spends $699,999.99 more than your family every six seconds, you have a right to ask questions and to know if they are spending your family’s money wisely. And you most definitely have the right to demand that the spending spree be stopped. NOW.
We’ve been warned to stop the reckless spending.
The spending addicts in Washington DC would have you believe that our debt is unconnected to spending. They would like you to think that with some fancy pledges and gimmicks they can control the debt and keep it from spiraling into oblivion. They want you to ignore that overspending is the driver behind the debt.
Why would they want you to believe this? Because if you do, then they can continue to spend, spend, spend, spend. Sadly, most of our elected officials care more about their own power than the fate of this nation. In fact, a CBS poll recently found that 80% of Americans believe that members of Congress work to satisfy special interests rather than their constituents.
The reason so many Americans feel this way is because the politicians’ actions leave no room for any other possibility. And American constituents are not the only ones that have come to this conclusion.
• Moody’s and Standard & Poor’s have warned us that our credit rating will be downgraded if we do not control our debt.
• If the nation’s credit rating goes down, borrowing money becomes more expensive, making our existing debt crisis even worse.
• China issued a statement, as our primary lender, saying that the US must rein in spending now, or will likely face abrupt and severe austerity measures.
Here’s a doozy of a fact that no one in DC is acknowledging:
When the abnormally low interest rates normalize (i.e. increase to normal rates), our annual interest expenses will skyrocket – making mincemeat out of any budget deal brokered today! Right now the average cost of borrowing for our Treasury Department is 2.5 percent, while the average over the last couple of decades was 5.7 percent! (Please read the article linked above in its entirety.)
Now get this – Our interest expenses, over ten years, will jump to $4.9 trillion once interest rates “normalize,” and the Republicans are “pledging” a decrease of $2 trillion in spending over ten years… so that $2 trillion in savings will be swamped by $4.9 trillion in new interest expenses!
We are now at the point where the entities that lend money to us are starting to get nervous because they can see the writing on the wall. The politicians try to scare the American people by using rhetoric like “draconian cuts,” but imagine how “draconian” the cuts will be when our creditors decide suddenly to stop lending us money. Forty cents of every federal dollar is borrowed. Either we cut spending our way, or our creditors will force us to do it their way. Which way do you prefer?
We don’t have to reinvent the wheel on spending.
Some Americans are old enough to remember a time when the federal government was smaller, leaner, and more manageable. Some Americans remember when most of the decisions were made closer to home, either by the individual himself, his family, the local community, or the state. Amazingly, even some younger Americans can recall a more limited government because we used to have one – even in the last fifteen years! This isn’t rocket science. It’s not like we are asking our elected officials to come up with some totally new and untested budget. We know, for a fact, that the federal government has functioned perfectly fine with a smaller budget and less spending. There are old budgets we can revert back to as well as other actions that would allow us to pay our obligations without raising the debt ceiling or raising taxes.
• It would take about $750 billion in spending cuts by the end of this fiscal year (ending September 30) to get us back to 2003 spending levels, which would allow us to avoid default and pay for the rest of government, all without raising the debt ceiling or increasing taxes.
• The Federal Government holds more than $1 trillion in highly liquid assets that should be sold to the private sector, and doing this now would allow the cuts to be phased in more slowly.
• If we even rolled spending back to the Clinton-era budget we could make our obligations without raising the debt ceiling or increasing taxes.
• America’s politicians have a spending problem NOT a revenue problem. There is no reason to raise taxes or the debt ceiling except to grow government.
How can we actually make cuts of this size? Here are just a few examples:
• Downsizing Government by the Cato Institute – a department-by-department guide to downsizing the federal government.
• Strong America Now – a plan that will save $500 billion a year and balance the budget by 2017 with no new taxes, reducing the debt along the way.
• Government Accountability Office (GAO) report – found hundreds of duplicated programs and agencies that could be consolidated, saving taxpayers at least $100 to $200 billion. (Though probably more as we know that when businesses are forced to deal with multiple agencies for the same issue, it costs them a lot of money. Actual report here.)
When the politicians try to scream and throw temper tantrums about how spending cuts will damage the economy and throw Grandma to the wolves, just remember that we’ve always spent less than we spend today, and Grandma was just fine. The question is, would you rather have America be $14.3 trillion in debt or $16.3 trillion in debt. That’s the choice they are offering, but don’t be fooled. We know there is another choice, and it’s called CUT SPENDING and DON’T RAISE THE DEBT CEILING.