We have a Debt and Spending Problem as we are Spending so much that we have to Raise the Debt Ceiling
Contrary to popular belief the government doesn’t just borrow money. They also raise money by taxing us and charging us fees. A lot of it. In this past fiscal year (October 2012 to September 2013) they raised $2,450,200,000,000. That’s $2.45 trillion dollars. Sadly, they spent $3,537,100,000,000. Or $3.5 trillion. Giving us a deficit of $1,086,900,000,000. Or $1.1 trillion. Which is why we’re having a debt crisis.
Interestingly, the left does not believe that we have a debt problem. Or a spending problem. For they see no problem with these numbers. The only problem they have is with Republicans. Who do believe we have a debt problem. As well as a spending problem. And they want to do something about it. Before the debt grows so big that it threatens the full faith and credit of the United States.
Now the Democrats, who don’t think we have a debt or a spending problem, are saying the Republicans are threatening the full faith and credit of the United States. With their shutting down of government. And their demand for spending cuts before raising the debt ceiling. Which proves the Republicans point. We have a debt and a spending problem. Because we are spending so much that we have to raise the debt limit.
The Interest on the Debt is only 11.75% of the Available Revenue so there is no Danger of Default
Of course, this explains the $1.1 trillion deficit. Out of control spending. That the government is funding with more and more borrowing. Which threatens the full faith and credit of the United States. Because the more debt we accumulate the less likely we’ll ever be able to pay it off.
But are we risking default on the debt now? With this battle over the debt ceiling? No. Yes, the debt is huge. Currently it is in excess of $16 trillion. About six and a half times total federal revenue. To get an idea what that means consider you have the median household income which is approximately $51,000. If you carried the same amount of debt the federal government carries you would have approximately $331,500 in credit card debt. Any household with a median income of $51,000 with credit card debt of $331,500 has a bleak future. And unless they win the lottery they will not escape bankruptcy.
So $16 trillion in debt is recklessly high. And impossible to pay off. But as bad as that is the amount of revenue the federal government collects via taxes and fees greatly exceeds the interest on the debt. The interest on the debt is $415.7 billion. This is the amount the government has to pay to avoid defaulting on the debt. Which is easy to do with $2.45 trillion in revenue. The interest on the debt is only 11.75% of the available revenue. So even if the Republicans refuse to raise the debt ceiling there is no way in hell the government will be unable to pay the interest on the debt. Unless the government chooses NOT to pay the interest on the debt. Even when they have the ability to pay the interest on the debt.
The Democrats become Chicken Little whenever anyone ever Threatens their Spending Authority
So why all the talk of defaulting on the debt? And ruining the full faith and credit of the United States? Simple. Democrats are liars. And what do liars do? They lie. The interest on the debt is in no danger of going unpaid. It’s all that other government spending that is in danger of going unspent. That spending that makes people dependent on government. And buys votes.
The left tries to frighten the people so they can keep spending. And keep buying votes. They try to scare Social Security and Medicare recipients. Telling them they will lose their benefits if the Republicans don’t stop what they’re doing. Even though they won’t. First of all we pay into our own retirement account. At least that’s what the government tells us. And there is a Social Security Trust Fund. Full of our money just waiting to pay our benefits. Or so they say. But the Trust Fund doesn’t have money in it. It has government IOUs. Because the government spent that money.
So that’s why Democrats lie. So they can keep spending and buying votes. Which they won’t be able to do if they can’t borrow more money to spend. And they’re spending so much that they can’t afford to lose their charging privileges. This is why they warned the sky would fall if the sequestration spending cuts went into effect. But as we all witnessed the sky did NOT fall with those spending cuts. There was some discomfort. But nowhere near the calamity the Democrats warned would befall us if they didn’t get their way. Bringing us to their greatest fear. That life can go on with a large spending cut. And telling us that the government can cut spending even more. Far more. Which is a threat to their ability to buy votes. And to their power. Which is why they become Chicken Little whenever anyone ever threatens their spending authority.
Tags: buying votes, debt, debt ceiling, debt crisis, debt limit, debt problem, defaulting on the debt, deficit, Democrats, fees, full faith and credit, interest on the debt, Republicans, revenue, Social Security, Social Security Trust Fund, spending, spending cuts, spending problem, taxes, taxes and fees