Fox Nation vs. Reality: On Abolishing The Debt Ceiling

Anyone with a functioning brain stem already knows that Fox News will distort issues to advance their rightist agenda. But the worst part of their activist pseudo-journalism is when they deliberately present material that is so obviously false that it is an insult to their audience. Lucky for them their audience actually is too stupid to know they are being insulted. Take for instance this item posted today with the headline “Democrat Congressmen Call for Unlimited Federal Debt.”

Fox Nation

The article reports on legislation in the House to eliminate the debt ceiling. For the Fox Nationalists to portray the bill as a call for unlimited debt is an outright lie that any economist, even the conservative ones, would dismiss as blatantly false.

The debt ceiling has nothing whatsoever to do with the amount of debt carried by the nation. Raising the debt ceiling does not increase the federal debt by one penny. The national debt is produced by congressional spending bills. When congress spends more of the country’s money than it receives in revenue it creates debt. After that debt is incurred the federal treasury is obligated to pay the bills for the goods and services it already consumed. When those obligations exceed the amount of the debt ceiling, the ceiling must be raised in order to issue payment. Raising the debt ceiling does nothing but allow the government to honor its obligations. If the ceiling is not raised, the debt still exists, as well as the state of default as a result of welching on our promises to pay.

Eliminating the debt ceiling would insure that we do not repeat the calamitous scenario of this past summer where Republicans held the nation hostage by threatening to destroy the country’s financial reputation in order to achieve their political goals. Their actions resulted in the downgrade of America’s credit rating for the first time in history.

Unfortunately, asking Fox News and their disciples to grasp the distinction between congressional spending and payment authority for bills already incurred is a tall order. Republicans are notably averse to reality when it doesn’t fit their preconceptions or the personal interests of their benefactors. This state of denial was well demonstrated by Bill Maher and Keith Olbermann last night as they attempted to educate a typical Republican.

Advertisement:

14 thoughts on “Fox Nation vs. Reality: On Abolishing The Debt Ceiling

  1. Mark are all people here as misguided as you? Let’s say I owe 10,000 on credit card(s) and my monthly payments total $450. I only have $400 to pay with. So I go and borrow another $5000 so I can continue to make payments and not default. It only makes sense if 1. you can get the $5000 and 2. you use that money to invest in a means of making enough to eventually pay off the debt. The US has been borrowing without making investments or making changes to allow the repayment of the debt- ever! Banks don’t lend to those with too much debt. The more you owe the lower your credit rating. All the Republicans and Tea Party did was try to put a stop to this senseless borrowing and spending. They demanded spending reform along with a plan to reduce the debt. Without that, all we are doing is digging a deeper hole. Default or not the fact that we owe so much destroys the value of our dollar and our credit rating. Of course printing money only distributes the debt and destroys wealth. What this country has been doing has been totally selfish and irresponsible. In God We Trust is on our money but we’ve been doing truly dishonest things with it. This is why our credit rating dropped. You tell me when and how does it end without putting a cap on it. The way it has been going is the more you give the US government the more they will spend (waste). The people of this country are demanding it stop!

    • Nice rant but it doesn’t change the fact that the debt ceiling has nothing to do with creating the debt you are so worried about.

  2. Hey I understand the pipe DREAM of living on renewable resources but Obama is holding the US hostage via the EPA by effectively prohibiting drilling and mining. Meanwhile he’s wasting our money investing in sure to fail enterprises like Solyndra. China is going to pollute their environment and eventually ours no matter what “clean energy” we produce over here. We should be creating ways to clean up the mess they are going to leave for all of us. There are 2 basic things we need now and that’s food and energy and that’s the 2 things B.O. is prohibiting thru government regulation. Why give anymore to a government that wastes so much. It’s not an income problem. It’s a spending problem. Enough already!

    • Posting nonsense from Glenn Beck’s web site doesn’t prove anything. The man is a pathological liar.

      It’s clear you get your paranoid conspiracy theories from Beck. Do you really think Obama is deliberately trying to starve America of food and energy? It’s like a cartoon super-villain. Your wild fantasies have about as much credibility as the childish name you have chosen for yourself.

  3. My, my. I believe he just made your point.

    • Perhaps. But I’m not sure he has any coherent point so I’m not claiming victory.

  4. Modern Money Mechanics states that the very existence of a bank is to issue loans based on a percentage of its reserve. The money for the loan itself comes from the an addition of funds in the banks books after the loan contract is made. Nothing comes out of the bank itself. Interest is charged on the loan and is considered the actual cost of taking the loan in the first place. The money created compounds at least ten times, inflating the money supply. This is where inflation comes from.

    It gets better. The actual money on reserve is tied to all other banks. If a person withdraws $10,000, $10,000 debited from the reserve of all the banks in the nation not just the one bank. This is why one bank failure can start a cascade of multiple bank failures in different banking institutions.

    This may sound like an oversimplification of such a convoluted and arduous process; it is. There is much more detail, more than what can be said as a comment. Read Modern Money Mechanics; it is provided by the Chicago Federal Reserve Bank. It is a better read than any economics text book for it elucidates the foundation our economic system is built on.

    The U.S. government gets its money from the Federal Reserve. The Federal Reserve operates this way just like all other banks. This form of banking is unconstitutional. The U.S. government must print and control its own money. Giving this right to a private bank is unconstitutional. It creates a conflict of interest in America’s government which is plain for everyone to see.

  5. I just listened to an interview Mike Papantonio had with Frank Schaeffer and they were discussing the slate of republican presidential candidates-mostly Bachman and Perry-and what a bat-shit crazy crew they are. Their extreme christian fundamentalist views are the most frightening thing I’ve ever seen in my lifetime and if this country goes down that road we will be reduced to permanent third world status in my opinion. People like the first commenter on this page will never be convinced by facts and will always march in lockstep with the neo-fascist republican party!

  6. Sorry I wasn’t clear enough on the point I was trying to make. Let me try again. Humor me please! As of May 2011, approximately 40 percent of US government spending relied on borrowed money. Raising the debt ceiling allows the federal government to continue to borrow money to support current spending levels. If the debt ceiling had not been raised, the federal government would have had to cut spending immediately by 40 percent, affecting many daily operations of the government, besides the impact on the domestic and international economies. Treasury can determine what items would be paid. If the interest payments on the national debt are not made, the US would be in default, potentially causing catastrophic economic consequences for the US and the wider world as well. (wiki) See graphs here: http://en.wikipedia.org/wiki/United_States_public_debt

    I believe this was your point. Yes raising the debt ceiling to pay off current debts is not necessarily tied to increases in future spending but unfortunately the truth is that it always has been. We borrow more then spend more. The tea party simply said that this has to stop and that the increased debt limit must be TIED to spending reform so we don’t have to keep doing this. Not tying borrowing to a plan to reduce the debt is digging us into a deeper hole. There MUST be a plan to cut spending so we don’t have to keep borrowing in order to pay debts. It’s not the T Party’s fault that Congress refuses to do its job. You refer to B.O.STINKS as childish. You mean just like “Freakshow”?

    • What I think you fail to realize is the U.S. government cannot stop spending under any circumstances. The U.S. has received funding directly from the Federal Reserve in the form of interest bearing loans since its inception in 1913. The U.S. government has no money to its name to pay back any of those loans. Any spending reform will be superfluous. Income taxes are not income for the government; loans are. The government takes out loans then pushes the cost of those loans onto its dear subjects.

  7. Does anyone remember when it was crazy talk to even suggest the government was bankrupt since the Great Depression? Or, the government has no real assets except for debt?

    Today, the national debt crisis and the debt ceiling is all anyone can talk about, as if it were matter of fact.

    What was that about truth? First, it is vehemently reproached. Second, it is plausibly denied. Third, it is accepted as self-evident.

  8. Hope the rest of the world continues to play our Shell game.

    • There’s got to be at least one on every blog. Mark already had more than his share.

  9. Between 2001 and 2010, the Bush tax cuts added $2.6 trillion to the public debt, 50 percent of the total debt accrued during that time. Over the past 10 years, the country has spent more than $400 billion just servicing the debt created by the cuts.
    Far from paying for themselves with increased economic activity as promised, the tax cuts have depleted the public treasury. Tax collections have plunged to their lowest share of the economy in 60 years.

Comments are closed.