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Mon Jan 14, 2013, 10:58 AM

Imagine If Everyday Americans Handled Debt Like House Republicans - Solidarity!

House Republicans say that they are being responsible by cutting spending by refusing to raise the debt ceiling in order to force cuts. By refusing to raise the debt ceiling, the federal debt will not be able to pay obligations that Congress previously approved.

Can you imagine if everyday Americans took a page out of the book of House Republicans. Afterall, haven't we been lectured that we spend too much? Well, rather than actually cut expenditures or repay our obligation, what if Americans simply decided to refuse to pay their credit card bills? In right wing world, this would be the responsible way to cut debt.

Just like House Republicans do not actually want to propose unpopular cuts in benefit programs (let Democrats guess what will make them happy), why should Americans actually cut their outlays? Instead, simply default on the payment of such bills, because this is the responsible thing to do according Tea Party nation and it is much less painful than (you know) actually proposing and sticking to a budget.

Oddly enough, I don't see Fox News pushing for everyday Americans to stand in solidarity with House Republicans on the responsible approach of defaulting on their legal obligations.

6 replies, 685 views

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Arrow 6 replies Author Time Post
Reply Imagine If Everyday Americans Handled Debt Like House Republicans - Solidarity! (Original post)
TomCADem Jan 2013 OP
bigapple1963 Jan 2013 #1
1StrongBlackMan Jan 2013 #2
bigapple1963 Jan 2013 #3
TomCADem Jan 2013 #4
bigapple1963 Jan 2013 #5
TomCADem Jan 2013 #6

Response to TomCADem (Original post)

Mon Jan 14, 2013, 11:02 AM

1. not quite the same

 

The Republicans are refusing to raise the debt limit which is to borrow more money unless spending cuts are agreed. The household analogy would be to stop charging up the credit cards and cutting expenditures.

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Response to bigapple1963 (Reply #1)

Mon Jan 14, 2013, 11:14 AM

2. Actually, the household analogy would be ...

to stop using the credit card and (promising) to cut FUTURE spending, while refusing to pay for the stuff that maxed out the credit cards, in the first place.

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Response to 1StrongBlackMan (Reply #2)

Mon Jan 14, 2013, 11:47 AM

3. ok

 

if you want to get technical

the household analogy to the Republicans' plan is to continue to use the existing credit cards as debt (since no one is talking about actually paying down the deficit) but stop charging to the credit cards (not increasing the debt limit) for previously-planned expenditures or for interest payments on previous credit card balance *unless* cuts are made to projected future expenditures.


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Response to bigapple1963 (Reply #1)

Mon Jan 14, 2013, 11:25 PM

4. No, the household analogy would be to ignore other obligations...

...such as leases, phone bills, utility bills, etc., despite contractual obligations to pay for such expenses. The kid who mowed your lawn? Sorry, I need to cut spending, so you out of luck. The analogy is similar because Congress has passed laws that create obligations by the government to fund programs like Medicare.

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Response to TomCADem (Reply #4)

Tue Jan 15, 2013, 12:02 AM

5. depends on what you mean obligations

 

I see 3 kinds of obligations:

(1) Interest payment on debt: the consequences of missing coupon payments are most dire since the US would technically be in default of its sovereign debt. The household analogy would be refusing to pay the minimum balance on the credit card.

(2) Payment for services rendered. Companies do it all the time (defer payment) which is why suppliers often offer a discount for prompt cash payment (net 60). Consequences are not so dire since usually there's a penalty negotiated for late payment (often ignored). The household analogy as you pointed out is the kid who mowed your lawn and expected $20.

(3) Last would be transfer payments e.g. Social Security. The Supreme Court has already established that Social Security is not a contractual right. What Congress gives, Congress can take away. The household analogy is to stop your kid's allowance.

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Response to bigapple1963 (Reply #5)

Tue Jan 15, 2013, 12:37 AM

6. Except That Congress Has Not Taken Social Security Away

As for debt, aren't loans essentially a contractual arrangement as well? In other words, I would not necessarily buy into the way Republicans are trying to frame the debate. The fact of the matter is that there is no law that even allows the President to prioritize payments in his discretion, because the assumption is that if it has been budgetted, the obligation will be paid. Republicans would like us all to accept the idea that Social Security and Medicare payments somehow have less priority than debt payments. Well, Republicans can certainly propose such a law, but the key is why go down this route?

The debt ceiling has nothing to do with authorizing spending. The spending has already been mandated by Congress.

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