I know this is getting repetitive, but I'm going to keep pounding the table on this until it sinks in to the American public and they rise and demand that we cut the crap with the deficit spending.
Bloomberg is once again stoking the "tanks in the streets" fear game, with this crap:
“The markets will be under very real pressure at the open because the assumption will be there is really no resolution to this,” Cooper said. “The breakdown in negotiations has crossed the line from the political posturing of the last few weeks to potentially a very real crisis.
“The Tea Party is effectively playing Russian roulette with the bond market and they will, with certainty, lose,” Cooper said. Jefferies is one of 20 primary dealers that trade with the U.S. Federal Reserve.
Utter and complete crap.
Look folks, there is absolutely zero risk of default based upon payment flows without a deal. None. Nada. Zip.
I want you to look at the following - this is from Treasury itself. It's the monthly treasury statement, otherwise known as "MTS":
Click for a larger copy that's easier to read.
There's no magic here. The "heavy" revenue months are January (Corporate 1120 filing deadline), April (tax day, of course), June (estimated taxes), September (estimated taxes) and December (estimated taxes and end-of-calendar year deposits.) The other months, of which July and August are two, tend to be significantly lower revenue months.
But when I say "significantly lower", I am still referring to somewhere around $150-170 billion in tax revenues.
Bloomberg has nice enough to categorize expected outlays for August. Here we go, assuming we have $150 billion (I'm a pessimist) in revenue to spend.
First, there's what we must pay. That's $29 billion in interest. We have $121 billion left. Everything else is, legally, a choice.
Social Security ($49.2 billion, Medicare (28.6 billion) and Medicaid (21.4) billion are up next. They're big. If we pay them all without exception we now have $21.8 billion left.
We can pay military active duty pay and IRS tax refunds (you're going to have trouble getting people to send in taxes in the future if you simply steal them) which total $2.9 billion and $3.9 billion, respectively. We can also pay Veterans benefits ($2.9 billion.) We now have $12.1 billion.
We now have a choice. We can pay a third of the defense vendor payments, or nearly all of unemployment benefits, most of which are not insurance - they're extended benefits. Those are $31.7 billion and $12.8 billion respectively. We cannot, however, pay both, and whichever we choose we just ran out of money.
That means we can't pay TANF ($7.1 billion), federal salaries (awwwwww, that's $14.2 billion) or the Department of Wasted Minds (otherwise called "education") at $20.2 billion. HUD gets stiffed ($6.7 billion), energy, highway admin and justice. I suggest, incidentally, that for the Department of Justice we let Mexico have Eric Holder and his pals at BATFE - they'll take care of that for us.
There's much more of course, but this outlines the problem.
It also outlines the solution.
We will not default in August, unless Treasury intentionally spends the money that they are legally required to pay in interest on the equivalent of "hookers and blow" instead.
However, a refusal to pass the debt increase will force an immediate balanced budget.
If you think we can't find 50% savings in Medicare and Medicaid, I assure you that we can. We have to fix the entire medical system, starting with refusing to give away billions to illegal aliens in "free" medical care along with permitting medical drug and device vendors to price-fix in this country while selling for far less everywhere else in the world - for openers. We also have to deal with the fact that not everyone can be given a triple-bypass and two new hips when they're 70. Sorry, the money doesn't exist.
Unemployment insurance? It's supposed to be 26 weeks; that's actually insurance since premiums are paid for it. Cut off the extended programs. Poof - there goes a lot of spending.
Federal salaries and benefits? Cut 'em in half. Anyone who doesn't like the deal can quit. With as many unemployed as we have, there will be plenty of people willing to work for the offered wage.
Education Department? Gingrich told us in his "Contract for America" it was going to go away. There's no time like the present. Poof.
HUD? Poof.
Justice? Legalize pot tomorrow. There's more than enough tax revenue from that to cover the expense, not to mention the decrease in the cost of jails with all the people we'll release the next morning. Resolved.
Health and Human Services grants? Poof.
"Other spending"? If you can't itemize it then it must not be important.
Defense? Now that's a tough one, but I got an answer. President Obama told us he was going to leave Afghanistan and Iraq when he campaigned in 2008. Well, let's do it. Like now. As for those who want to be paid for past performance they'll have to wait. We'll pay 'em, but not today, and we won't need so many tanks, body armor sets and bullets going forward since we're bringing the boys home immediately.
Yeah, this will be a rough ride.
Have you ever lost your job? I have.
What happened? You went through the family budget and figured out what you couldn't kill off. Cable TV? Gone. Second phone line? Gone. Expensive cell plan? Gone. Internet? Gone or seriously cut back. Air conditioning? Hahaha - turn it off. (For those who think it's impossible, my girlfriend, who lives in Florida, proves otherwise. Yes, you can have a $30 electric bill in this state. Shut the damn thing off!) Eating out? Nope. Chicken thighs are inexpensive and nutritious. So are a few apples, bananas and broccoli crowns and a dozen eggs and a hunk of cheese for your breakfast. Starbucks? Nope. Lunches out? Nope. Movie night? Redbox - $1 - instead of $50 at the theater. Netflix? Gone.
You get the idea.
We can do this. We must do this. But the reason the political parties don't want to do it is right here:
Our GDP is being overstated by more than 10%, and has been for the last three years running. If we balance the budget we'll be forced to recognize what condition our economy is truthfully in and has been since 2008 - a Depression.
We can't keep doing this, and the time to stop lying was three years ago, as I have repeatedly pointed out. But since we didn't, and we can't turn the clock back, the best time to "eat our peas" is right now.
The time for lies has passed ladies and gentlemen.
It is now time for truth, because the mathematics have caught up with the forked-tongue brigade in Washington DC on both the left and right.
