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U.S. Default Would Not Be Unprecedented | The Freeman | Ideas On Liberty: "During its 235 years as a sovereign entity the United States has defaulted on three separate occasions … and has also intentionally liquidated debt via inflation."
"During the 1933 banking holiday declared by President Franklin Roosevelt immediately after his March 4 inauguration, the federal government refused requests for interest payments in gold, remitting only currency instead. Congress later ratified this action by formally invalidating gold clauses….
Meanwhile, as reported in The Economist (2011, June 23), the US Treasury failed to redeem $122 million of Treasury bills on time after another debt ceiling debate in 1979. This episode was purely a technical default, arising from systems issues…."
Friday, July 29, 2011
How to Get Real Spending Cuts | Michael D. Tanner | Cato Institute: Commentary
How to Get Real Spending Cuts | Michael D. Tanner | Cato Institute: Commentary: "Budget history is flush with promises of cuts some day in the future — but some day never actually comes. This is especially true when budget savings are anticipated not from actually eliminating programs, but from making government 'more efficient.'"
"Republicans should not get hung up on seeking any particular amount of spending cuts. The dollar amount matters far less than getting the structural and institutional changes that will actually bring down the size, cost, and intrusiveness of government in the future.
Republicans should push hard for a balanced-budget amendment to the Constitution — and not one that simply requires a balanced budget, but one that includes meaningful spending limitations. If they can't get the two-thirds vote that such an amendment would require, they should at least insist on a statutory spending cap. Republicans should also insist on fundamental structural changes to Medicare, Medicaid, and Social Security.
In the end, this is not really a debate about budgeting or the size of the national debt. It is a debate about whether we will have a limited constitutional government or a European-style social democracy. Winning that debate will not be a question of whether there is an agreement to cut $2 trillion over ten years rather than $1.5 trillion. If Republicans get an extra $500 billion in cuts on paper, but leave the structures of big government in place, they will find out down the road that nothing has really changed."
"Republicans should not get hung up on seeking any particular amount of spending cuts. The dollar amount matters far less than getting the structural and institutional changes that will actually bring down the size, cost, and intrusiveness of government in the future.
Republicans should push hard for a balanced-budget amendment to the Constitution — and not one that simply requires a balanced budget, but one that includes meaningful spending limitations. If they can't get the two-thirds vote that such an amendment would require, they should at least insist on a statutory spending cap. Republicans should also insist on fundamental structural changes to Medicare, Medicaid, and Social Security.
In the end, this is not really a debate about budgeting or the size of the national debt. It is a debate about whether we will have a limited constitutional government or a European-style social democracy. Winning that debate will not be a question of whether there is an agreement to cut $2 trillion over ten years rather than $1.5 trillion. If Republicans get an extra $500 billion in cuts on paper, but leave the structures of big government in place, they will find out down the road that nothing has really changed."
RealClearMarkets - The Truth About the Debt-Ceiling Fight
RealClearMarkets - The Truth About the Debt-Ceiling Fight: "We have been told that failing to raise the debt ceiling would precipitate a 40% cut in government spending. Since most of what the government does is illegitimate, that would not be unreasonable at all, actually, but even on the Tea Party critics' own terms, the numbers tell a different story. If the debt ceiling is not raised, it would represent a 16% decrease from Bush's 2009 budget request of $3.11 trillion, decried by both the right and the left as overspending.
It would represent a 26% cut in government spending from Obama's 2010 budget request"
"To go back to Bush-level spending would require $0.70 trillion of borrowing until the end of 2012, around which time, revenues would begin exceeding government expenditures."
It would represent a 26% cut in government spending from Obama's 2010 budget request"
"To go back to Bush-level spending would require $0.70 trillion of borrowing until the end of 2012, around which time, revenues would begin exceeding government expenditures."
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