Of what might happen if Republicans refuse to raise the debt limit, is beginning to emerge. According to analysis by the Bipartisan Policy Center – if the debt limit isn’t raised by the end of February – then a chain reaction of events will happen that will ruin both the United States’ and global economy. To begin with, the Treasury Department has to make roughly 100 million payments a month, to pay for things already spent by Congress. Without an increase in the debt limit – those payments will not be able to go out.
Yes, in the short term, the Treasury can prioritize what they pay out first – and keep payments to Social Security, Medicare, Medicaid, Education, and Defense going for a little while – but that would mean everything else would cease getting funding after March 1st. That includes food safety inspectors, prisons, researchers, courts, the FAA, and the list goes on and on. And then there’s the subsequent shock to global financial markets, that will occur once America defaults on her debt – and the benchmark interest rate for US debt skyrockets – forcing rates on credit cards, mortgages, and complex derivatives to spike as well. The interest on our debt will go up – revenue into the government will go down – and we’ll be in an even worse fiscal situation than we were before.
This would be a nightmare for everyone. Yet, it’s exactly what House Republicans are willing to bring about, unless President Obama agrees to significant cuts in Medicare and Social Security Insurance programs. There’s no other way to describe this than economic terrorism. And the President must cut off negotiations with these terrorists right now – and embrace either the 14th Amendment, or the trillion-dollar platinum coin, to raise the debt limit on his own
Listen to The Thom Hartmann Program Monday through Friday 3 PM to 6 PM on WWRL 1600.