Hitting the Government's Credit Card Limit
President Obama has taken to the nation's airwaves raising the specter of a default on U.S. Treasury obligations, as if the only source of funds for paying interest and debt is further borrowing. This is as believable as his promise that Americans could keep their health care plans if they like them, following the implementation of Obamacare.
According to U.S. Treasury data, the federal government has averaged $238 billion in monthly tax receipts in 2013 through July. In the same time period, it has averaged $283 billion in expenditures for a delta of $45 billion/month. Hitting the debt ceiling does not mean that the government literally runs out of money. It is a hold on allowing continued deficit spending. It is similar to hitting the credit limit on your credit card. The difference between the U.S. government's finances and real life pocket book issues for American citizens is that many consumers tap out their credit cards and, even then, still need more money every month to pay for basic necessities than the cash they have coming in. That is not the case with our federal government. The $238 billion dollars/month in tax revenues which the federal government is taking in more than cover its "basic necessities."
So what is the consequence of bumping up against the federal government's borrowing limit? The first sentence of Section 4 of 14th Amendment states:
"The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."
By definition, public debt must include interest and principal payments on debts incurred by the U.S. government. Section 4 specifically includes pensions in its definition of public debt. Today, that would include Social Security and Veterans' retirement pensions. I believe you could plausibly argue the case that Medicare is a type of pension as retirees now depend on it. General public policy, however, and associated spending are subject to change by Congress at any time and cannot be considered "public debt." I do not want to parse the point too fine as to what the definition of "public debt" is because it is moot when considered in the context of all the cash flowing into the Treasury's coffers every month and the magnitude of spending which occurs which is definitely not "public debt."
Military funding was appropriated by a bill passed by Congress and signed by the President before the government shutdown so I am exempting that $39 billion/month from these calculations. $52.8 billion/month of federal budget expenditures are U.S. interest payments this year (bonds/Treasuries). Check. This has been the subject of the most hysterical, sky is falling, fear mongering on the part of the media and the Left. Right there, no more discussion is needed whether a lack of funds may cause the U.S. government to default on U.S. debt to its bondholders worldwide. $73.5 billion/month is the tally for Social Security in 2013. Check. Grandmothers across the nation don't need to starve. The 2014 Veteran's Affairs budget includes $86.1 billion in mandatory spending or $7.17 billion/month for veterans' pensions. Check. Our war heroes can be paid. You cannot possibly characterize the entire Health and Human Services budget as "pensions"; but, for argument's sake, since the Democrats are demagoguing that children will die because the National Institute of Health's funding is supposedly drying up (even though the Republicans offered to fund it), let's throw the entire HHS budget in, too. $78.3 billion/month make up the Medicare/ Medicaid/Children's Health Insurance program. $52.8 + $73.5 + $7.17 + $78.3 = $211.7 billion/month or $26.3 billion/month less than the $238 billion/month average 2013 tax receipts from Jan.-July.
There is no real risk to the "full faith and credit" of the United States except by hysteria-instigating Democrats who want you to believe that the U.S. is on the verge of default.
Therefore, if President Obama chooses to violate the 14th Amendment's commandment that the validity of public debt shall not be questioned, then that is his choice and his alone because the Treasury, and therefore the President, literally has the money in the bank to uphold this requirement regardless of whether the government's credit card has been maxed out.
So here is to those Republicans making a stand in Congress against the President's unilateral and unconstitutionally-issued exemptions and selective delays of Obamacare which ensure preferential treatment for the well-connected elites in government and among Obama's donors and union cronies while sticking it to the rest of us. May these brave men and women be stern in their resolve, resolute in their determination and have the courage of their convictions. We must all let them know that we stand behind them and exhort them to stay strong in the face of Democratic demagoguery.