That did not address the numbers. You have no leverage unless you are willing to freeze the debt ceiling, and if you do that, the numbers I laid out trigger.
It’s not a listing of cuts. When you freeze the ceiling, it’s a listing of spending — and when you do that you see that it’s not doable.
You can list cuts until the cows come home but unless you are 100% willing to allow default, Obama can just go on vacation and not even bother to negotiate. Boehner would have to raise the ceiling with no cuts at all — or not. Is he willing to freeze the ceiling and see all those necessary services ended? No, he’s not.
No, nobody would be. The most profoundly right wing Tea Party guy would not be.
We have no leverage at all. Were I Obama, I’d give nothing. Not a single dollar of cuts, or maybe $1 billion off DoD just to pretend. Why should he, if he knows they cannot freeze the ceiling.
Debt ceiling must be frozen in order to bring Dems to the table.
Congress can pass laws to change its obligations. That is exactly what they constantly propose to do with SS/Medicare. Somehow when we discuss Federal bureaucrats and welfare, everyone says we can’t legally stop those payments.
There is Federal revenue every month.
It should go to bare essential DoD and other barests of bare essentials. Strip State Dept and WH bare (end all foreign aid), pretty much eliminate all other agencies, i.e., Commerce, Agriculture, etc.
Soc Sec and MC have funding coming in every month, there is a small shortfall. Some of the $2.5 trillion in Treasuries held in the OAS/DI trust fund are redeemed by Treasury to cover this difference.
Everyone else in the Federal government should be shut down, laid off; not enough to pay them, no more borrowing permitted by the Congress.
Dept. of Ed., for example: shut down and go home.
Welfare checks, unemployment, etc., all stop.
Etc.
No default on debt, keep paying interest and rolling it over. But stop all social spending, highways, agencies, etc. Shut down. DoD will be running on a thin budget, States will have enormous pressure on them since they will lose all State aid.
This will happen anyway once no one in the world will pay cash for Treasuries any more.
The private sector has to buy Federal paper in order for gov’t to “borrow”. The Fed carries Fed paper as Assets on it’s balance sheet as well - but it is, in essence, bankrupting itself if it gets in too deep. It already holds far too large a portfolio of Federal debt instruments to be able to find a buyer for them, i.e., unwind the position. That means (like a ponzi) the Treasury will simply keep paying them interest on the paper they own, rolling over old debt into new, until tax revenue is not enough to even do that. Then, it’s Greece time.
The Fed and the banking system are merely enablers for Congressional spending.