Salon | What happens if the debt ceiling bomb explodes?:
In some quarters of the American political system, there are people — predominantly of the Tea Party Republican persuasion — who believe that Congress doesn’t need to raise the debt ceiling. If the U.S. government isn’t allowed to borrow any more money to pay its bills, runs their line of thinking, that’s fine and dandy. Finally, we’d be forced to tighten our belts and “live within our means!” Ignore the fearmongers predicting disaster — they’re just trying to scare markets and voters.
[...] Let’s start with the basic numbers. According to the Bipartisan Policy Center, the U.S. Treasury will have about $172.4 billion in revenue in August that can be applied to $306.7 billion in outstanding bills. If the U.S. Treasury is forbidden from borrowing any additional funds, it will therefore have to cut total August spending by about $134 billion, or 44 percent. …Click on over to this cool interactive widget at Bloomberg Government and decide for yourself who gets paid and who doesn’t if Congress fails to raise the debt ceiling.
[...] Now, there are plenty of Tea Partyers who would no doubt be happy to get rid of the EPA, food stamps, unemployment benefits, Medicaid and any number of other government spending programs…
Since this is usually “all about me” when we’re talking teapartyers, and so many teapartyers are receiving Social Security and Medicare benefits, why shouldn’t the rest of us — the working people, the unemployed, the college students — all agree that Social Security / Medicare should be cut if the limit isn’t raised? Those two programs total $77.8 billion out of August’s budget — which is over 25% of all the money due. The majority of us don’t receive those benefits and we’re learning quickly that only two things should matter: ME and MINE as opposed to YOU and YOURS. In other words, boot straps.
…There are lots of different ways to divvy up government spending according to your personal priorities… if the U.S. government cut its spending [by 44%] for both August and September, GDP growth [c]ould drop by 2.3 percent from the previous quarter.
[...] Choose your poison: global market chaos, savage cuts to the social welfare safety net or recession. Or, heck, all of the above. …Slower economic growth means less tax revenue, which would force even more budget cuts. Laying off hundreds of thousands of federal employees would further boost the unemployment rate. And if the U.S. government ever did end up authorized to borrow money again, the yield it would likely have to offer to attract buyers for its damaged goods would undoubtedly skyrocket — putting further pressure on government finances.
Of course despite this alarming situation, those tax cuts for the wealthy are #1 on the list of important things for teapartyers and their corporate sponsors and their Republican leaders — Boehner, Cantor, Kyl and McConnell. This budgeting lesson should clearly illustrate how we’re all paying to provide the wealthy with their tax cuts. There’s no way the federal government obviously needs more revenue, right? We’ll just cut YOUR programs and services instead of mine.