A major component of President Obama’s debt-ceiling brinkmanship has been threatening that the United States could default on its financial obligations. The argument goes that if we don’t give him more deficit spending, he won’t be able to pay the interest on the national debt. In other words: “If you don’t raise my credit limit, I won’t be able to pay my credit card bills.”
In his address to the nation last night, Obama mentioned the danger of default eight times. Here’s the most important passage:
Unfortunately, for the past several weeks, Republican House members have essentially said that the only way they’ll vote to prevent America’s first-ever default is if the rest of us agree to their deep, spending cuts-only approach.
If that happens, and we default, we would not have enough money to pay all of our bills – bills that include monthly Social Security checks, veterans’ benefits, and the government contracts we’ve signed with thousands of businesses.
For the first time in history, our country’s Triple A credit rating would be downgraded, leaving investors around the world to wonder whether the United States is still a good bet. Interest rates would skyrocket on credit cards, mortgages, and car loans, which amounts to a huge tax hike on the American people. We would risk sparking a deep economic crisis – one caused almost entirely by Washington.
This fearmongering has already done some damage, as Bloomberg News reports: “The dollar slid to a record low versus the Swiss franc, stocks fell and the cost of insuring U.S. debt rose to a 17-month high as President Barack Obama dueled with House Speaker John Boehner over the U.S. debt limit.”
Except the “default” scare is a fraud. Barack Obama is lying, in a deliberate effort to generate panic that serves his political agenda.
He’s telling the truth quietly, behind the scenes, to a privileged audience of big-money bankers, according to a Fox News report:
While officials from the Obama Administration raised their rhetoric over the weekend about the possibility of a debt default if the debt ceiling isn’t raised, they privately have been telling top executives at major U.S. banks that such an event won’t happen, FOX Business has learned.
In a series of phone calls, administration officials have told bankers that the administration will not allow a default to happen even if the debt cap isn’t raised by the August 2 date Treasury Secretary Tim Geithner says the government will run out of money to pay all its bills, including obligations to bond holders.
There is still risk to America’s credit rating, but as rational analysts have been saying all along, it comes from our skyrocketing national debt, not the phony threat of immediate default.
A senior banking official told FOX Business that administration officials have provided guidance to them that even though a default is off the table, a downgrade “is a real possibility for no other reason than S&P and Moody’s have to cover (themselves) since they’ve been speaking out on the debt cap so much.”
This guidance is a big reason why Wall Street has largely dismissed the possibility of default, and though the markets have been jittery amid the talk of default, they haven’t imploded as would be the case, many economists fear, if the nation missed a payment on its debt.
Sorry, liberals, there’s no way you can spin this. It’s not a mistake, a misunderstanding, a slight exaggeration for effect, or a “nuanced” position that lesser men cannot understand. President Barack Obama has been lying through his teeth, for the express purpose of scaring people out of their wits.
And even as he lies to you, he’s been reserving the truth for a group liberals are supposed to hate: wealthy bankers.
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