The Real Threat of the Debt Ceiling

The days are counting down and the dollars are counting up to the point that the Treasury of the United States of America will no longer be able to borrow money.  Some "experts" (perhaps expert politicians) are claiming that if this point is reached, the US will default on its debts.  The Constitution requires the US to pay its debts, and there are more than sufficient revenues to do this, so a default is pure fantasy.  What is not fantasy, is that the US will have to pick-and-choose which programs continue to operate, and the ones in charge of doing the choosing are President Obama and the federal courts.  The State of Minnesota provides us a glimpse into the bleak future of an Obama led apocalypse.

Minnesota makes a great parallel to the current federal situation.  Both Congress and the Minnesota legislature are led by Republicans, who want to shrink the size and budget of government, while holding ridiculously high taxes from going higher.  President Obama and Governor Dayton are both highly partisan Democrats, who are trying to score points for their party, at the expense of the people.  That's an outrageous charge, you say?  Then consider this.

Many of the facilities and programs which have been shut down in Minnesota are actually revenue-generators, or at least supported by user fees.  There is the zoo, which people pay to use.  Camping in state parks generates a fair amount of revenue for the parks.  Professional licensing is also paid for by user fees.  Rest stops generate vending machine sales, and companies pay to advertise in them.  Who would ever accuse the lottery of being a money drain?  Certainly drivers' licenses provide a sizable revenue stream.  Meanwhile, the state employees are paid, and the facilities themselves must be maintained.  While revenue-generating divisions are "shut down," the money pits which caused the problem remain open.  Illegal aliens will still receive billions of dollars in free medicine, food, housing, education, and tax breaks.  City dwellers will still receive their subsidized public transportation.  People who can actually afford to buy their own food will still have free food provided to them.  The police will still be out arresting people who do not have the proper licenses, because the state refused to sell them licenses, regardless of the fact that a state cannot require a license but provide no means to obtain it.

What is happening in Minnesota will not improve its budget situation, because it has effectively destroyed a good percentage of its revenue streams, while maintaining most of its spending.  The selection of things to cut is clearly aimed at inconveniencing people and making them angry, while the bread and butter of the Democratic handouts remain unaffected.  If this were a true and honest shutdown, then we would see the revenue-generating and fee-based services remaining operational, while the scofflaws, fraudsters, and illegal aliens using Minnesota's safety nets as hammocks would find themselves kicked to the ground.  People using public transportation would have to start paying the full price of their rides.

Governor Dayton is clearly playing partisan politics at the expense of the people, but is President Obama also a partisan hack?  There is considerable evidence, some of it from the President's own mouth, that he let the (serious) birth certificate issue drag on for so long, as an attempt to tarnish the Republican Party.  When Senator McCain paused his presidential campaign to address the serious financial crisis, and Senator Obama butted in on the meeting, he acted as a spoiler, constantly regurgitating anti-Republican propaganda, and singlehandedly ruining the meeting.  Just recently, in his own budget address, Mr. Obama fanned the flames of class warfare and belittled the Republicans so egregiously that Mark Halperin, who usually carries the water for Mr. Obama, was prompted to call Mr. Obama "a dick."

The most convincing evidence of life under an Obamalypse is what Mr. Obama has already threatened to do if the debt ceiling is reached.  He has threatened to stop USDA inspection of meat, which is a revenue-generating, user-fee program, along with other user-fee programs, such as the National Parks and the Department of Commerce seafood inspection program.  The National Weather Service also sells some products.

This might surprise people, but about 7/8 of the core (non-welfare) federal mission is funded by user fees, with only 1/8 coming from income and corporate taxes.  The bulk of the income and corporate taxes go to paying for welfare programs (e.g., Medicare, Medicaid, Social Security), military, and interest on the existing debt: the things that have bankrupted the country.  At least, it was this way under Bush.  Under Obama, we have borrowed and spent an extra 1.5 trillion dollars every year, and it is not clear where that money has come from or gone, but 7/8 of the core, non-Obamulus, federal mission is still funded by user fees.

So when Mr. Obama shuts down the national parks, stops meat inspections, stops processing OSHA and EPA filings, but continues to pay out Social Security checks and Medicare bills, we will be on an accelerated debt program.  At least, we would, if the federal government were allowed to borrow more money, which it could not.  While partisan hackery may be Mr. Obama's first response, ultimately, to fulfill obligations under a fixed debt ceiling, President Obama will be forced to maximize federal revenues, while minimizing federal expenses.  User-fee programs will be forced to remain open, possibly with 10% to 15% higher fees.  When someone claims to be black and had attempted to farm, instead of receiving an automatic $50,000 check, he might receive an FBI agent investigating him for fraud.  Social Security checks might see a 5% reduction, and fraudulent Medicare claims will be investigated more thoroughly.  Then again, Mr. Obama is so partisan that he might just continue running up more debt under the Minnesota model, and find himself impeached.

So the threat of the debt ceiling would be laughable, if we had a good president who would institute minor fee increases and minor welfare cuts, but we have Barack Obama instead, so lock your belts, watch your back, and stay away from things against which you might be bent over.

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