STOP the FEAR: The Truth About the Debt Ceiling
original article written by Net Advisor™
WASHINGTON DC. There continues to be this chicken little game going on in Washington and by some in the media.
The false rhetoric is this:
“Debt-ceiling breach would push economy into free fall, without a government safety net”
The liberal writers who posted that article at WP (and many others) want to try and put fear into Social Security recipients, etc, that seniors will not get money to buy their medications, etc. All of this is hog wash.
The ONLY – repeat – the ONLY way for this to occur is that the President DECIDES such, and orders the U.S. Treasury who is under HIS control to NOT fund or to fund certain programs.
In 2011, the U.S. Treasury took in revenues of about $200 Billion per month. Interests cost on the debt at the time was about $15–20 billion per month (Source: Market Watch, 07-12-2011).
In 2012, the U.S. Treasury took in about $2.449 Trillion in revenues or about $204 Billion per month – REVENUE.
Total receipts (in billions of dollars):
|Individual income tax||1,359|
|Social Security and other payroll tax||959|
|Corporate income tax||348|
|Estate and gift taxes||13|
|Deposits of earnings and Federal Reserve System||80|
|Other miscellaneous receipts||21|
*Actual total receipts to the Treasury were $2.449 Trillion in FY 2012 (Source: U.S. Treasury Monthly Statement, PDF, P2).
In 2012, the U.S. had $2.239 Trillion of “Mandatory Outlays” of expenses for the whole year.
Most of this money went to:
- Social Security (including social security checks) ($871 Billion)
- Healthcare, including Medicare and Medicaid ($860.3 Billion)
- Dept. of Agriculture (food stamps, school lunches, etc) ($127.7 billion)
- Dept. of the Treasury (including paying interest on the debt) ($96.2 Billion)
- Dept. of Labor (unemployment checks, etc) ($88.4 Billion)
- Veterans Affairs (VA income, pension, medical, death and other benefits) ($79.4 Billion)
- Dept. of Transportation (including FAA) ($74.5 Billion)
All of this PAID for with the EXISTING tax receipts and revenue the U.S. Treasury gets on a monthly basis.
Total outlays by agency (in billions of dollars):
*Actual total federal spending for 2012 was about $3.538 Trillion which includes about $615 Billion of Discretionary Spending. If excluded discretionary spending, the U.S. still over spent by $475 Billion. The U.S. spent $1.101 Trillion in 2012 beyond its revenues (deficit).
Defense Department apparently had about $6.7 Billion in mandatory spending and $666 Billion in discretionary spending in 2012 (table above). This is not to suggest all we have to do is slash defense and fund all welfare programs. While reading over the Treasury statements (below), there are tons of questionable projects the federal government supports that should be reviewed. The U.S. can’t fund every pet project when we have to borrow to do it.
Thus, in 2012, the U.S. had money to fund all “mandatory spending” under law, PLUS $453 Billion surplus for “discretionary spending.”
The U.S. does not technically nor legally need to raise the debt ceiling, that is why we call expenditures in government that are not mandatory, “discretionary spending.” That means it is not required by law. In 2012, we had $453 Billion to put toward discretionary spending.
Spot Checking: U.S. Treasury Statements
- Sep 2012. $262 Billion in receipts for the month including a surplus of $75 Billion (PDF).
- Dec 2012. $270 Billion in receipts for the month including a deficit of $1 Billion (PDF).
- Jan 2013. $272 Billion in receipts for the month including a surplus of $3 Billion (PDF).
- Oct 2013. $184 Billion in receipts for the month including a deficit of $120 Billion (PDF).
During the October 2013 government shutdown, HUD spent $3 Billion in three days, and the U.S. Treasury continued to borrow $106 Billion in new debt (report).
So when Bush was President, raising the debt ceiling was “bad.” When Obama is President, raising the debt ceiling is now “good?” The hypocrisy in this Administration is unlike anything I have ever read in U.S. history. People should be outraged because they are paying the bills on someone else’s checkbook.
So far, the U.S. National Debt grew by 58% or over $6 Trillion under President Obama, now approaching $17 Trillion in debt. Somehow, many in Washington DC and liberals think that MORE DEBT will somehow solve our debt problem?
Dems always promise to have a balanced budget and handle their finances LATER – after you give them more money, but never own up to the problems. If a crack head promised to get off crack if you gave him one more rock of crack, would you do it? All that is being done here is enabling the addict.
The government will probably increase the debt ceiling anyway because that is what they have done in the past. We are all being brainwashed with media propaganda that we have to keep going into debt so we can continue to live? That’s not the best fiscal strategy, just ask Spain, Greece or Cyprus.
They think voters are stupid and that we can’t live unless we have a government that spends, spends, sends, until one day our mandatory outlays are not covered by existing treasury receipts. THEN…. Houston, we have a problem.
Credits: Cartoon property of their respective owner as noted. Charts/ tables: Wikipedia. Obama graphic property of Fox News.
NetAdvisor.org® is a non-profit organization providing public education and analysis primarily on the U.S. financial markets, personal finance and analysis with a transparent look into U.S. public policy. We also perform and report on financial investigations to help protect the public interest. Read More.