Scare Tactics

Even as the two sides  have been inching closer to an agreement on raising the debt ceiling (or not), there’s been a lot of talk floating around about how the United States might default on its obligations if Democrats and Republicans don’t finalize a deal by August 2.

Not true.  The treasury takes in more than enough tax money to pay off bondholders.  And if bondholders get paid on time, there is no default.  It’s really that simple.

But that didn’t stop the venerable Associated Press from running this when the debate got hot a few months ago:

WASHINGTON (AP) — The United States has never defaulted on its debt and Democrats and Republicans say they don’t want it to happen now. But with partisan acrimony running at fever pitch, and Democrats and Republicans so far apart on how to tame the deficit, the unthinkable is suddenly being pondered.

Pondered by whom?  Political journalists who are abysmally ignorant of financial matters and so don’t know what default actually means?  But we can’t blame the press entirely.

Here’s what President Obama told reporters at a press conference on July 11:  “It is not acceptable for us not to raise the debt limit and to allow the U.S. government to default. We cannot threaten the United States’ full faith and credit for the first time in our nation’s history.”

The president surely knows better.  The only way the U.S. government could default is if he, the president of the United States, told his treasury secretary not to pay bondholders.  Mr. Obama is many things, but nuts is not one of them.  So what’s this about?

It’s about scaring everybody into thinking that if a deal isn’t struck before the deadline the nation would face a financial catastrophe.  And with the president’s allies in the press writing the story, whose fault do you think it would be?  If you said, the Republicans, give yourself a gold star.

What about social security checks?  Would they go out to seniors who need the money to live on if the two sides don’t make a deal?  The president was asked that very question by Scott Pelley on CBS.  Here’s what he said:  “I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it.”

That’s not true, either.  He absolutely can guarantee that those checks go out on August 3.  After paying off our lenders, there would still be plenty of money to send out social security checks – unless, of course, the president, for some unfathomable reason, decided he didn’t want to.

It’s true that there would not be enough money to pay for everything the federal government currently pays for.  Pot holes on interstate highways might have to wait.  We might not be able to fund a teapot museum.  Maybe a few National Parks would have to close for a while. But our debts would be paid on time and social security checks would go out – even if everyone in Congress went on vacation to Fiji and didn’t come back until October.

But President Obama made a decision to scare old folks — hoping fear would force the Republicans to make the kind of deal that he and the liberal Democrats in Congress want.

Wouldn’t Mr. Obama have been better off if had told Pelley:  “I am telling our senior citizens that no matter what happens, no matter how intransigent the other side is, I Barack Obama am promising you that you will get your social security checks.”

That would have made him a hero with everyone who depends on those checks.  Instead he opted for fear, just as he did when he said this nation might default on its obligations for the first time in our history.

Eric Hoffer, the longshoreman philosopher from San Francisco, once said that, “The leader has to be practical and a realist, yet must talk the language of the visionary and the idealist.”  President Obama talked the language of the visionary and idealist when he ran for president.  And a majority of the voters thought he meant it.  Now that he has the job, he is doing what liberal Democrats so often do.  He is speaking the language of fear.  And for nothing more than to score some cheap political points in order to get his way.

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  • TOMMY FREEDOM

    BILL, ON THE FUNNY FACTOR FIRST TRASHED MICHELE
    BACHMANN, BECAUSE SHE DIDNT WANT TO RAISE THE DEBT CEILING. NEXT, HE TRASHES THE TEA PARTY
    SAYS THEY ARE RADICALS, EXTREMISTS, OBSTRUCTIONISTS, THATS RIGHT, NO TAXES AND NO MORE SPENDING. NO, BILL WANTS A COMPROMISE, HE JUST CONCERNED ABOUT HIS MILLIONS ON WALL STREET
    AND WORRIED ABOUT A DIP, NOT THE WELFARE OF THE
    ECONOMY. HES NOT LOOKING OUT FOR YOU !!!!

  • Trial

    It appears Mr. Hadley has come over to cause trouble =(

    When I first read the title of the article, I thought the article was going to be about how the media shuns the “birthers” and how they use scare tactics so people don’t bring up the issue. I am now disappointed. However, I agree with what Bernie has to say in this particular article.

    With or without a deal being made, Obama will still have his birthday party.

    • Bob Hadley

      I come over a lot to cause trouble, ever since last December. :P

  • don f

    by saying that he could not guarantee ss checks would go out on 8/3, wasn’t he admiting that ss money is not in the “lock box” and that we had to borrow to pay ss checks. will he also call the landlords and mortgage cos of seniors when they can’t pay thier rent or house payment?

    • Bob Hadley

      The so-called “lock box” was Al Gore’s idea during his 2000 campaign. That idea was never implemented because George W. Bush won the election.

  • Will Swoboda

    Good morning Bernie,
    I’m like Bill O’Rielly. I’m a simple guy. My wife and I went through credit card debt not once but twice. After the second time we were determined to live inside of our means, whatever it took. It took shopping in the bulk food isles, very simple vacation like camping close by, hotdogs & beans & fresh air. We decided that if we couldn’t pay cash, we would do without until we could. (Mecical things were an exception) We started to save, were able to buy our first house and after our sons were grown, we started a photograghy business. We were doing a job in Nashville TN. and I went to rent a car. I pulled out a wad of cash and the manager said they were not set up to deal with cash only major credit cards. I did need a credit card for the business but have been very careful ever since. Sometimes we just plain have to do without.
    Thanks

  • EddieD_Boston

    Unfortunately most democrat voters are either hysterical loons or double digit IQ members of Rikki Lake nation and are too stupid to grasp what is actually happening. The press just follows along and makes a mockery of professional journalism.

    What made Ronald Reagan a great president is he was able to rise about the peanut gallery and talk to the average Joe with common sense.

    I think John Boehner needs to get out front and center on this (more so that he is now) and hammer home the fact we have a spending problem, not a tax revenue problem.

    It’d be very tough for the lapdog media to paint him as a fat cat when he grew up in a family of 12 kids and his parents struggled paycheck to paycheck.

    • Bob Hadley

      What made President Reagan successful in different ways was pragmatism. He raised taxes several times, he granted amnesty to illegal aliens, he cut and run (from Beruit)when the going got rough and not once did he even propose a balanced budget.

      Reagan’s true genius was fooling masses of rightwingers into believing that he was a true blue conservative who never waivered from principle. Yes, his soaring rhetoric, and his wit and charm were disarmig, even hypnotic.

      If I were you, I wouldn’t talk about double digit IQs or hysterical loons.

  • Bob Hadley

    “It’s true that there would not be enough money to pay for everything the federal government currently pays for. Pot holes on interstate highways might have to wait. We might not be able to fund a teapot museum. Maybe a few National Parks would have to close for a while.”

    Bernie, Did you hastily slap together this column to throw red meat to the looney Right after the hit you took from them on your other column? I hope not. If so, you are degrading yourself and your brand as a hard hitting but fair and honest journalist.

    Where are the facts and figures to back up your bald assertions? How much money is the federal government projected to take in over the next month or so? How much must the federal goverment pay per month in obligations?

    You are probably right that the feds wouldn’t default in the classical sense, but to imply that the disruptions would be relatively minor (as you indicate in the above quote)is irresponsible. You know that you’re providing cover to those who advance this thinking.

    Yes, we would probably have enough money to pay the bondholders and even social security recipients. But what about medicare? What about medicaid? What about the VA hospitals and veteran’s benefits? What about paying our soldiers and officers? What about the financing to keep safe our military who are fighting overseas? What about the FBI? What about the CIA? What about air traffic controllers? What about the food and drug safety? The list goes on…

    What about interest rates on homes, cars, other consumer loans, the interest on the federal debt?

    If you’re going to say that there’s enought flab in all these areas to keep all these obligations and programs intact, then show us the proof. Where are the facts and numbers? What are your sources?

    • Ron Kean

      Bob,

      Who are you to make demands…’…show us the proof.’?

      Who are you to judge anybody…’…hastily slap together…’, ‘…you are degrading yourself …’,'…loony right.’?

      Cut it out.

      • bob hadley

        Ron,

        I think you’re being partisan. If someone wrote a column with contrary conclusions with no supporting evidence, what would you say?

        A critical thinker is critical (in the hgihest sense of the word) of everyone, especially those with whom he agrees. You should see how critical I am of liberals. I’ve given hints of this on this website.

        But the commentary to Bernie’s prior column was dominated by the looney right. I’ve documented my position (aka the facts) in earlier posts on this website.

        I appreciate your rejoinders. I do not mean to be harsh on you. I’m just hard hitting on the issues, as is Bernie. But I think your posts show that you’re a really good person, even if you may have some wrong ideas! :P I’m kiding Ron. You think I’m wrong, and I think you’re wrong. But we still fully engage. Isn’t that what democracy is all about?

        But I don’t think I made any demands in my post above. I mainly asked questions. I also added some commentary. I will keep aadding my same two cents to this website until I move on.

        • joe from louisiana

          It’s difficult to ever know what source is more truthful when a person can Google any subject and find five different answers. I think Bernie is correct that the roughly $200 billion a month will cover the must pay items. I see both sides as intransigent but the MSM is portraying only conservatives mainly the Tea Party congressmen as holding the nation hostage. If you like details, where are the President’s details on $4 trillion in cuts over the next decade(I’m betting mostly defense and very little overhaul on the entitlements)? Much of the revenue increases are based on “closing loopholes” with no definites. I’m uncomfortable with that logic. If interest rates rise dramatically our debt may become untenable. Both sides need to grow up and come up with solid solutions for “shared sacrifice”.

          • Bob Hadley

            Why do you think that the amount taken in will cover all the “must pay” items? Do you have a factual basis for that or are is that mere wishful thinking? Why don’t you itemize all the “must pay” items along with the dollar requirements per month? If you don’t have the information on this, then you don’t have a factual basis for your thoughts.

            Knowing which statements of fact to believe can sometimes be a problem. But usually you can tell by checking sources and by carefully examining the information for internal consistency and common sense. The key is to have a degree of skepticism with everything, especially statements of fact that appeal to your world view.

  • Brian

    We’ve been hearing about this newcomer Joe Walsh, who represents Illinois after being elected to Congress last fall, which of course means something.

    As each new day passes, we see more and more of Joe doing what his constituency asked of him…down in the trenches, getting dirty, and definitely not afraid to “duke it out” with anyone it seems.

    And for the past couple of days or so he’s been getting a lot of attention for supporting the House plan to “Cut, Cap, & Balance” the budget.

    Last night he tried to explain this to MSNBC’s Chris Matthews. That is, when Chris wasn’t talking over him and trying to change the subject at every turn.

    Anyway, have have you noticed how (this time) the Left is trying to use “Cut, Cap, and Balance” as a way of saying that the Right wants to halt progress?

    However, what the Left won’t admit is that those on the Right do want the process to move forward! In fact, specific to this instance, the Right is willing to raise the debt ceiling. BUT…

    Oh no, there’s that word again…yes, there’s a but…and the Left doesn’t want the rest of us to hear about that but. But why? Because the Right wants to handle this matter responsibly and once and for all!

    What the Right wants is called a “Compromise”. And they basically want to accomplish one by not handing over another “blank check” to the President (or Congress for that matter) as has been done ever since this government decided that going into huge debt (and keeping us there) was a good thing!

    Does this sound like those on the Right are towing the party line and playing partisan politics? Because that is what most on the Left would like us all to believe.

    And this “blame game” is straight out of the Left’s playbook, and yet just another adaptation of a tactic they resort to when attempting to scare the populous. It’s not much different than what they used when it came to passing Obama-Care, or the same old same old when pushing Obama’s Stimulus Bill, and so on, and so on, and so on…

    What you won’t hear is anything of substance coming from them. They won’t stay within the context of the argument. And they won’t offer any real solution…except of course, more of the same business as usual. Oh, and let’s not forget their old standby: “Regrettably we were forced to raise Taxes.” Which will then be followed by blaming it on the Right anyway, and the cycle will start all over again.

    For good or bad, half of this country voted for “Change” in 2008. Again in the Fall of 2010, Americans voted once more for change, albeit it a different kind of “Change”.

    But it appears that many in Washington are not paying attention, or simply don’t care to. Actions speak louder than words, am I right?

    Even worse is that many in the media are placating those in D.C., and dismissing the public’s interest (or the Truth), for whom (or which) they really are beholden to. I mean, has it not been said that “Journalism’s primary purpose is to hold power to account???”

    I just don’t think that means propping it up!

    I’m just saying…

  • Paul Courtney

    Bernie: Thanks for pointing out the mendacity of Obama on the “I can’t guarantee…” statement. When I heard it, I wanted to watch NBC News that night. Surely after he caught Sarah P. mistaking bells for lanterns, Brian Williams would conclude his report on Obama’s lie by tilting his head forward, smirking, and smarmily remind his audience that the Pres is the one person who can make that very guarantee. Unfortunately, I missed that night. I bet Brian really tore a new one in BO that night! And Jon Stewart, I missed that night too, darn the luck. Bet it was hilarious.

  • cmm912

    You are absolutely right when you said that obama should have promised seniors that they would receive their Social Security checks, no matter what happens on the debt ceiling talks. However, he is so entrenched in Chicago-style politics (not to mention Alinsky tactics), which includes a lot of lying to get what you want, that lying has become unnaturally natural to him. LYING is always his first course of action!

  • Albert Thai

    I can’t believe that any President, anyone who holds that office, would be so weak as to try to scare the very people who, whom by the way probably voted for him, make up a very important part of this country by articulating any indecision about whether or not he’ll sign their SS checks. What money goes where is ultimately his decision to make and I can’t imagine a scenario in which he would not allocate funds for Social Security, and I’m sure that he can’t either. I think that using that kind of rhetoric is both lazy and harmful. It does nothing but create unease and unrest, while doing nothing for his credibility.
    He knows good and well that he wouldn’t default on Social Security, so, though I hate to say it, by saying he cannot guarantee it’s solvency, he is lying in an effort to get what he wants..

  • Ron Kean

    The president surely knows better…
    Mr. Obama is many things, but nuts is not one of them…

    I wonder if you assume too much here.

  • Elaine

    I think the biggest thing that bothers me is when he says the American people wants us to pass a balance budget and he adds that includes debits & revenues. He is either just plain telling a out right lie or somebody is telling him a lie because we do not want more taxes.

  • Gerry

    Thx, Bernie. This column is why I follow you.

    • http://www.bernardgoldberg.com/ Bernard Goldberg

      Gerry

      Thanks very much. I do appreciate the vote of confidence.

      Brg

  • Standlow

    It is obscene for Obama and the Democrats to appropriate Ronald Reagan to bolster their phony arguments. NOTHING about their positions resembles Reagan’s conservative principles. At least some of the public is better educated now and not buying it. Thank you, Bernie, for being one of the educators.

  • GR

    To the people who work everyday to provide for themselves and their families, AP and the captured media have terrified them so much that they have halted economic activity. Obama had already mortally wounded the economy and now is working toward the final death blow. His accomplices on Wall Street and in the lame excuse of a Congress should all be tried for TREASON.

  • Nancye

    P.S. Did Obama really think we old folks would believe THAT!!! We’ve been through more than Obama can throw at us in our lives.

  • Nancye

    What about social security checks? Would they go out to seniors who need the money to live on if the two sides don’t make a deal? The president was asked that very question by Scott Pelley on CBS. Here’s what he said: “I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it.”
    *************************

    He knew better than that when he said it. It would almost be worth it if he did, because that would “cook his goose” for being elected in 2012. Obama doesn’t scare me, he infuriates me. If he really wants us old folks to get a kink in our tails, just pull that on us!