The Obama administration is praying for panic. Obama made up an arbitrary deadline to try and pressure Republicans into passing irresponsible legislation. There was no real deadline, other than in the deluded mind of Obama. The United States is not at risk of defaulting on its debt any time soon. There is plenty of revenue available to pay that. There is also no risk of defaulting on social security, Medicare and/or veterans benefits. There is also enough money to do that and more.
While the main stream media, including people like Bill O’Reilly, bought this artificial disaster date hook, line and sinker, the real experts didn’t. It is becoming more and more obvious that the rating agencies and the investment community are far more concerned about the size of our debt, than the size of our debt ceiling.
The problem isn’t that the U.S. isn’t borrowing enough; the problem is we have borrowed too much already. I now believe that August 2nd will come and go and the rating agencies and the investment community will adopt a wait and see attitude. It will soon become apparent that Obama’s doomsday prediction has the same credibility as the preacher who predicted the end of the world.
I may be surprised, but I don’t expect to see any legislation passed before the August 2 deadline. While Boehner, McConnell, Reid and Obama might be willing to cut a deal, Boehner is facing a near revolt from the Tea Party caucus. He can cut any deal he wants, but that does not mean he can get the House to agree. They are not in the compromising mood.
Obama is likely to wake up Tuesday morning to discover that the only people experiencing panic are those in his own administration. He has limited options. He could just ignore congress and raise the debt limit himself, but unless there is a legitimate worldwide financial meltdown, that would be an act of political suicide. In spite of his rhetoric, he can’t arbitrarily stop paying our debt. He certainly can’t try and solve the problem by stopping social security checks, Medicare checks or Veterans checks. Odds are he will try to solve the problem by printing more money, by selling some assets and ultimately by shutting parts of the government down. He could shut down the EPA, the Commerce Department, Housing & Urban Development, the Department of the Interior, and the Department of Education and it would be weeks if not months before anyone noticed. He needs to be very careful, because he held accountable for his decisions.
Ironically, Obama and the Democrats are panicking over the lack of panic. I don’t know how this will work out, but I do know who is praying for panic.
TDM