Posted on 07/06/2011 9:27:28 PM PDT by upchuck
A small team of Treasury officials is discussing options to stave off default if Congress fails to raise the country's borrowing limit by an August 2 deadline, sources familiar with the matter said on Wednesday.
Senior officials, including Treasury Secretary Timothy Geithner, have repeatedly said there are no contingency plans if lawmakers do not give the U.S. government the authority to borrow more money.
But behind the scenes, top Treasury officials have been exploring ways to prevent a financial meltdown that would be triggered if the government were unable to pay its bills on time, sources told Reuters.
Treasury has studied the following issues:
- Whether the administration can delay payments to try to manage cash flows after August 2
- If the U.S. Constitution allows President Barack Obama to ignore Congress and the government to continue to issue debt
- Whether a 1985 finding by a government watchdog gives the government legal authority to prioritize payments.
The Treasury team has also spoken to the Federal Reserve about how the central bank -- specifically the New York Federal Reserve Bank -- would operate as Treasury's broker in the markets if a deal to raise the United States' $14.3 trillion borrowing cap is not reached on time.
The U.S. government currently borrows about $125 billion each month. The Obama administration wants Congress to raise the limit by more than $2 trillion to meet the country's borrowing needs through the 2012 presidential election.
(Excerpt) Read more at reuters.com ...
Of course it’s BS. When was the last deadline? May was it, the month came and went and nothing happened. If nothing is done before August 2nd the deadline will just be pushed back, than again, possibly in a process that will go on for years.
The politics of FEAR...and they said Rove was good at it...these guys have mastered it.
We don’t need to “borrow” money from the Fed. They can just give it to us.
It is BS...there’s plenty of revenue to pay Medicare, Military, government salaries...etc...
Theres the money quote
“The Obama administration wants Congress to raise the limit by more than $2 trillion to meet the country’s borrowing needs through the 2012 presidential election.”
Yes folks. it will take 2,000,000,000,000 in borrowed dollars to keep the US government afloat for 16 short months or 125,000,000,000 per month.
Then, after the election the bomb goes off and (fill in the blank) republican president gets the blame.
The GOP will cave and raise the limit. Thus kicking it down the road for another year. Eventually, and probably very soon, nobody will loan us anymore money and the dollar will tank. That will be the end of this country. And we can blame ourselves for making politicians royalty.
Ain’t no “maybe” nd there is no question mark.
The guberment has scaremongering us since 9/11 and it was further exacerbated under this current administration starting with the ‘doom and gloom, end of the world tomorrow’ passage of the Stimulus and has proceeded forth since.... =.=
Senator Pat Toomey was the first one I heard talk about this not being the end of the world at least 6 weeks ago. He offered lots of options and explanations. I do not have a link, though.
This year our local County government was again faced with more projected expenditures than revenues. Unlike the federal government, it is required to have a balanced budget. First it froze all unfilled personnel vacancies. Then it froze all new planned purchases. It also froze long distance travel. It carefully reviewed these for need and rejected the rest. It asked department heads to cut and strategically administratively redlined non-essential programs. It layed off many employees.
To save the jobs of others, it negotiated to eliminate all planned COLAs for employees. It rescinded the prior year’s COLA and returned salary to what it was two years ago. It negotiated with the unions for a greater employee share of medical and retirement benfits.
Why isn’t this being done on the federal level? If revenues have flatlined or decreased and union salary and benefits are automatically increasing each year, you are going to run a deficit. You have to figure out your revenue, subtract debt service and the amount needed each year to pay down the debt in an orderly fashion. Then the budget has to be trimmed to fit what revenue is left. Is that so hard to understand?
Who is leaking this and why?
Trial balloon? Through some sh*t and see what sticks?
My dad used to say that Bush Sr. was going to declare martial law and take power. I can’t imagine what he’d think about this mess. “nobody will loan us anymore money and the dollar will tank.” You left out the other option, a huge war. More and more history repeats itself. All I know for sure is when its all over the liberals will be referred to as conservatives.
Simple. Let Ben Bernanke keep the books. He’s great and creating money out of thin air. he can pay the creditors off the Fed balance sheet.
call it QE3.
“My suggestion:
1) Money comes into the treasury as usual.
2) Prioritize spending so that debt obligations are serviced before any other obligations are met.
3) Pay for other obligations according to some politically expedient formula.
4) Observe no default. “
Your sensible suggestion that Tiny Timmy cant seem to grasp and the fact that you can operate TurboTax without cheating make you over-qualified for Treasury secty. we’ll have to find another job for you.
- If the U.S. Constitution allows President Barack Obama to ignore Congress and the government to continue to issue debt <<
This is the trial balloon. A bunch of attorneys keep saying the 14th amendment guarantees public debt and using that theory, the president can ignore the debt ceiling.
They are LYING.
The 14th amendment, after guaranteeing legally authorized debt, in the next section gave the enforcement power to the congress to enact laws to enforce the amendment. The president is not empowered to ignore the congress with respect to spending, that is moronic (if they actually believe what they are saying).
DK
Congress can choose to give. Much less than $2 trillion in order to make it a major issue in the 2012 campaign.
...can delay payments... prioritize payments... the Federal Reserve... would operate as Treasury's broker in the markets...The Congress can repeal Zerocare and the Zero Stimulus, open the ANWR and the continental shelf for drilling, close the border with the former nation of Mexico, investigate Mr & Mrs Feinstein and Mr and Mrs Pelosi, and Reid's mob connections, and Zero's fake birth certificate(s)...
“...nobody will loan us anymore money and the dollar will tank.”
So be it. I’d rather face the inevitable now than have it haunt us. I see no advantage to kicking the problem ‘down the road’ indefinitely.
Those who have prepared for such an event will suffer far less than those who didn’t. Maybe it’ll be a lesson in basic economics for those who have depended on welfare, food stamps, free medical etc. for the past 3-4 generations.
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