[quote=SK in CV]Social Security benefits are a current debt. [/quote]
Read the supreme court case. My interpretation of the opinion sounds like social security is not a debt obligation. Maybe you have some source of information that contradicts this supreme court case but I haven’t seen it. Seems like they could they could use the rational justification of we don’t have the money to pay in full to not pay at all or not pay in full. Therefore there would be no debt obligation to default on.
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The Court ruled that no such contract exists, and that there is no contractual right to receive Social Security payments. Payments due under Social Security are not “property” rights and are not protected by the Takings Clause of the Fifth Amendment. The interest of a beneficiary of Social Security is protected only by the Due Process Clause.
Under Due Process Clause analysis, government action is valid unless it is patently arbitrary and utterly lacking in rational justification. This provision of §202(n) is not irrational; it could have been justified by the desire to increase the purchasing power of those living in America, because those living abroad would not spend their payments here.
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Mostly right, but you’ve changed the equation. If the government doesn’t pay debts already incurred, that’s defaulting on debt, irrespective of whether the debt is secured by a bond or a note.
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I already made it clear that government has plenty of money to pay interest on the debt they’ve already incurred. And as more tax revenue comes in with the government shut down they probably have plenty of money to pay for any already completed services that haven’t been paid yet. While all new services would be suspended.
My point being we can cut 30% of government spending that we are currently borrowing and not default on any debt. Will that cut have a massive impact on the economy. Yeah of course it will just as it is in the European countries that are forced to dramatically reduce their deficits in order to still have access to low interest borrowing.
The bottom line being the media and analysts are lying when they say not raising the debt ceiling means a default. No, it just means there’s an immediate and large cut to government spending.
