[okie01]

"We should not wait for the trust funds to be exhausted to make the reforms necessary to protect our current and future retirees," said Treasury Secretary Timothy Geithner, who chairs the board of trustees.

So, now, Timmy is selling panic to the entitlement crowd (being over 65, I'm one of them). In this sense, he joins Bernanke -- who is demanding that the debt ceiling be raised NOW.

Yet, we all know that, in the absence of raising the debt ceiling, the government can keep running for months on cash flow. Assuming reasonable priorities, debt service, defense needs and even all entitlements are secure for months.

But, for some reason which isn't clear, the administration is signaling panic.

Which leads me to ask: "Is there something we don't know?" Is there cash that is supposed to be there...that isn't? Is there debt which was supposed to have been sold...which wasn't? Are there accounts which were supposed to have been in order...which aren't?

I wonder if we are approaching one of those Moments of Truth...

[Zeddicus]

Which leads me to ask: "Is there something we don't know?" Is there cash that is supposed to be there...that isn't? Is there debt which was supposed to have been sold...which wasn't? Are there accounts which were supposed to have been in order...which aren't?

I don't think it's anything so nefarious. It's simple math. The government makes about 58% of its budget through revenues, the rest is borrowed. Unfortunately, just the entitlement programs (Social Security, Medicare/caid, welfare, unemployment, etc.) plus interest payments on the national debt consumes 60% of the Federal budget. Entitlement programs consume 100% of revenue.

So yeah, if the government can't borrow anymore, they take an instantaneous 42% budget cut, which is now impossible without HUGE cuts to everything the government does (not that that's a bad thing).