The request is out to make this video viral, so I’ll do my part. BTW, I was sounding the alarm as well on the debt interest over 2 years ago on my previous blog. Here is a link to the Treasury to see the debt interest history for yourselves.
In fiscal year 2010, we spent nearly $414 billion dollars just on interest on the Federal debt. This year, we are on pace for over $431 billion. That’s over $13,672 PER SECOND!!! And it only gets worse and worse from here. China is now proposing to cut its foreign debt exposure by two-thirds. What does this mean? Currently they hold over $1.15 trillion in U.S. Treasury debt. It means the Fed will have to implement QE3 and step up its purchasing of our own debt even more than they already have. Which means more downward pressure on the dollar. Which means more upward pressure on inflation and the cost of goods. Such as oil. And the price of gas. And the price of food. Yes, more of the same.
Yet we still have a debate on increasing the debt limit to raise our debt interest payments even more? Can you say stupid begets stupid? Such as the dire warnings of Treasury Secretary Timothy Geithner proclaiming the end of the world scenario if we don’t raise the debt limit? Won’t happen! The U.S. will NOT default on its debt without raising the debt limit. It simply means the government cannot continue to deficit spend this year. Yes, government programs will come to a screeching halt. The interest paid on the Federal debt will definitely not be one of them. Guaranteed. There is no way anybody in D.C. will let that happen because the results would be catastrophic if they did and they know it. Which is exactly why Geithner’s threats are hollow.
What it would do is force Congress to reprioritize their expenditures immediately. Just as state and local governments jump straight to laying off policemen and firefighters during a budget crunch to garner public sympathy towards restoring revenue levels (can you say tax increase?), the Feds will also jump straight to cutting high-profile programs that affect the people directly. Rocket science, it ain’t.
This will be the hurdle we face every time the debt limit debate comes up. We the people must demand austerity measures be enacted upon ourselves. As convoluted as that sounds, it’s true. Politicians on either side of the aisle (most, not all) have no interest whatsoever in stopping or reducing debt limits. It translates directly into smaller government. Smaller government means less power. Again, rocket science it ain’t.