|by Gary Varvel|
The US is expected to reach its statutory debt limit of $14.3 trillion on or before May 16.
- The Debt limit was last raised in early February 2010
- Senate vote: 60-39 (Late January)
- House vote: 27-212 (Early February)
- To avoid default, Congress must pay $207 billion in debt interest.
- Federal revenue: $2.2 trillion
- Federal spending: $3.3 trillion ($1.1 trillion more than revenue)
- Congress shouldn’t be rushed or bullied into raising the debt limit.
- No one is asking the US to default on its debt.
- All that is needed to avoid a default is to make payments on the interest.
- The Treasury is able to delay a default date by selling assets, shifting cash around, and borrowing money from the Fed that does not count to the debt ceiling.
- Congress has never failed to increase the debt limit.
- In the last 10 years, the debt ceiling has been raised 10 times.
- Since 1940, the debt limit has been raised 100 times.
- Geithner has changed the default date 4 times in 2011 alone, the latest projection being August 2.
- The debt ceiling does not effectively restrain spending, yet is simply raised at Washington’s whim, at a historic average of 1.5 times per year.
In the end, we are at greater risk to default under Washington’s charge card and excessive spending.
- American families cannot just increase their credit limit when their credit card debts become too burdensom, and Congress should not either.
- Excessive government spending has economic consequences for all Americans: higher cost of living, higher interest rates, and higher taxes.
- Interest and mandatory spending, such as Social Security and Medicare, will consume 90 percent of the budget by 2020; leaving 10% for everything from defense to education and infrastructure.
- Our heavy debt load is a bipartisan issue; spending doubled under President George W. Bush and is expected to double again under President Obama.
- We have seen Washington come together to make significant cuts to spending. The debt ceiling must be handled with the same sobriety and focus.
 Treasury Department’s Predictions:
January 6, 2011 Debt ceiling: between March 31 and May 16, 2011.
March 1, 2011 Debt ceiling: between April 15, 2011 and May 31, 2011.
April 4, 2011 Debt ceiling: no later than May 16, 2011.
May 2, 2011 Debt ceiling: still May 16; default August 8.
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