An instant fix for the phantom menace of debt default

The crisis ends if Obama gives debt payments top priority. He refuses because he wants more borrowing so he can spend more, not to pay debt. Photo: The Heritage Foundation

WASHINGTON, October 14, 2013 —The world could be instantly reassured that the U.S. will not default on its debt. Investors, Wall Street, the IMF, and everyone could be satisfied immediately. All it takes is a Presidential assurance that paying our debts is the top priority on using federal funds.

Despite all his bluster that we must not be deadbeats, President Obama has refused to give this assurance.

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Obama could direct the Treasury Department that paying debts is the top priority. Instead, he manufactures a sense of crisis to win approval for more borrowing that will pay for more government. There would be no debt crisis if he simply pledged that debts would be paid first.

Obama’s claim of debt crisis is a phantom menace created by him.

Here’s why: There’s no need to raise the debt limit to avoid defaulting on our debt. There’s no need to borrow anything to make those payments. Although the payments are big, they’re still only 1/7th of federal revenue.

These are the official numbers from the Treasury Department and the Office of Management and Budget:

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  • Annual debt service on the $17.6-trillion national debt is $415-billion/year
  • Projected revenue for this fiscal year that started October 1st is $3.037-trillion

The math is elementary. Debt payments require only one dollar in seven. That leaves six dollars in seven ($2.619-trillion) which are more than enough to pay our military, pay all Social Security benefits, and a lot more, even if the debt ceiling isn’t raised.

What Obama doesn’t want to admit, and what his media buddies don’t want to report, is that borrowing money is only necessary to keep government big and growing. Borrowing isn’t needed to pay our debts.

Obama deliberately distorts the discussion by referring to every government program as a “debt.” It’s like his word games of also labeling all government spending as “investment” and “stimulus.” Yet in the real world, debts are fixed expenses to repay loans or to pay for things we already bought and received. Everything else is ongoing expenses—the expenses that we cut back when we’re in a financial hole.

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But Obama plays word games with “debt” and his allies do the same. Words with these friends don’t follow the dictionary. They use the Bill Clinton model; it all depends “on what the definition of ‘is’ is.”

Obama and liberals fuzz things up and lots of reporters go along with it. They treat current expenses as debts that are already locked-in and impossible to cut. Obama claims that plans for future spending are unchangeable expenses already run up by Congress, not by him. Since he blames Congress for these, he should welcome efforts by Congress to reverse those expenses. After all, those are not done and over with. They are plans for what to do in the future—and plans can be changed.

What Obama conceals in the current debate is that he wants to add $160-billion in EXTRA spending this year alone, as proposed in his official budget submission a few months ago. Likewise, Senate Democrats don’t simply want to end a shutdown; they want to add tens of billions of dollars in spending.

Obama hides behind his deceptive rhetoric, enabled by fellow politicians and by many reporters, editors and producers who deserve to be indicted as co-conspirators.

The legitimate debt limit debate has nothing to do with defaulting on our debt. It has everything to do with the size of government.

There is no need to borrow to meet our debts. Zero. Zilch. Nada. The only reason to borrow is for government to be bigger than the $3.037-trillion that Uncle Sam will bring in this year.

The legitimate debate is whether we should increase our current $17.6-trillion national debt rather than trim back big government. How can we claim to love our kids if we’re going to stick them with that bill?

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More from Ernest Istook: Knowing the Inside
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Ernest Istook

Ernest Istook spent 25 years in public office, including 14 years in Congress. He was rated one of the top 25 conservatives in the U.S. House of Representatives. Then was a Heritage Foundation fellow and a fellow at Harvard's Insitute of Politics, where he led a study group on Propaganda in American Politics Today. 

Now as a radio host and a commentator, Ernest aims to expose Washington's gimmicks--to help you avoid the pitfalls. He brings clarity out of the confusion. 

Native to Texas, Ernest transplanted to Oklahoma after graduating from Baylor University.

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