[This is the second of my weekly five-minute oratorial expositions on Broad View, KBZZ 1270 AM Reno...]

Golly gee willickers, America, they managed to raise the federal government’s debt ceiling this week.  Isn’t that peachy?

Raising the debt ceiling may or may not be a good thing in your opinion, depending on which coven of politicians you choose to believe and whether you think another two trillion dollars of debt piled on your grandchildren’s backs is a good idea.  Me, I’m pretty sure it’s a bad idea.  And I’m angry about it.

The politicians did their best to scare people into liking this convoluted deal with a series of lies that would shame a two-dollar whore, but most of us didn’t buy into Washington’s scam.  Not this time.  Polls taken since Tuesday show that Americans do not approve—they don’t approve of the debt limit increase, they don’t approve of Congress, and they don’t approve of the president.

Refreshing to see us all agreeing for a change, isn’t it?

A quick review of lies used over the last few weeks starts with the biggest one, the one that’s already collapsed in disgrace: they said if we didn’t raise the debt limit, the nation’s credit rating would be lowered.  Well, in case you haven’t heard, at about five o’clock yesterday Standard & Poor’s lowered our credit rating.  That’s right, as of right now the United States of America is no longer considered the best credit risk.

Debt limit raised on Tuesday, credit rating lowered on Friday.  That’s a lie that barely lasted three days!

The lower credit rating isn’t a surprise to anybody with a lick of common sense.  Maybe you were confused by the rhetoric and the constant repetition by TV talking heads and the smooth assurance of all those important people in Washington wearing their expensive suits and flashing their used-car-salesmen smiles but, come on, people, did you really think the credit rating could be helped by diving deeper into debt?  Really?

Economics isn’t complicated.  Don’t let ’em fool you.  Operating the country’s checkbook is no different fundamentally than operating your own checkbook.  Have you ever wanted to buy a house and needed to convince a banker that you could afford the payment?  Did you run down to the nearest Cadillac dealer and lease a new Escalade you can’t afford, thinking that would help your case?

Of course not!  But that’s what our Republican House and Democrat Senate, after pooling their collective wisdom and discussing the matter for weeks, decided to do.

Didn’t work. The lie that gave the credit rating lie its legs was the suggestion that failure to raise the debt limit would cause the U.S. to default on its debt obligations.  That was never true, not even a little bit!  The nonsense about default was repeated in headlines and news broadcasts to the point of nausea—at least I was nauseous—to the point where the politicians and news media were using the word “default” as an ersatz nickname for the debt limit issue, even though this never had anything to do with default.

Once again, this isn’t complicated stuff.  Leaving the debt limit where it was didn’t mean the old debt couldn’t be serviced.  It simply meant the government couldn’t borrow more money.  Call me crazy but I like the sound of that.  There was enough money coming in to make interest payments and, as for the rest of the government’s expenses, well, by golly, they’d have to prioritize and decide what they can afford.  What a revolutionary thought!

Maybe George Soros wouldn’t get his two billion dollars to drill for oil in Brazil.  Wouldn’t make me cry.

Another lie, this one coming directly from the mouth of our president, was that August social security checks might not go out if the debt limit wasn’t raised.  He said it to CBS News on July 12, in the middle of the debt limit debates:

“I cannot guarantee that those checks go out on August 3 if we haven’t resolved this issue.  Because there may simply not be the money in the coffers to do it.”

This is a lie on two different levels.  Number one, there’s enough revenue coming in to pay for Social Security, interest on debt, Medicare, and essential defense, even if the government can’t borrow more money.  One would think the president would know that so it’s hard to excuse his statement.  But that’s not even the biggest problem with what he said...

Remember, Social Security has a unique status in the federal budget.  Payments don’t come from general funds.  The paycheck deductions stolen from working Americans since 1935 sit in four trust funds.  Those four trust funds are managed by a Board of Trustees which, unfortunately, lends the money to the general fund as fast as it comes in.  So we all know there isn’t really money sitting there—the whole thing basically boils down to a Bernie Madoff-like Ponzi scheme.

But... even though there isn’t actual money in the trust funds, the trusts do have Treasury Bonds sitting there as IOUs from the federal government, and—here’s the kicker—those IOUs are considered part of the overall debt just like regular bonds.  When the debt ceiling stood at $14.34 trillion dollars, before they raised it Tuesday, approximately two and half trillion of that amount was owed to the Social Security trust funds.

I’ll say it one more time: economics isn’t complicated.  If President Obama wants to send out Social Security checks, he doesn’t need to raise the debt limit one single penny because trading trust fund IOUs for regular Treasury debt to raise cash leaves the total amount of government debt exactly the same.

The president was lying to you, the Treasury Secretary’s been lying to you, congresscritters from both political parties were lying to you, and most of the news media’s been lying to you.  But I’m not lying to you.  I’m just using common sense to figure out what’s really happening to our country.

And it isn’t pretty.

“It is an affront to treat falsehood with complaisance.” —Thomas Paine

From Reno, Nevada, USA        Tweet