Alan Greenspan says ‘There is zero probability for default’ on the U.S. debt
By Foster Friess
But when the debt ceiling debate returns in February we will hear otherwise from the Chicago-bred, Washington DC Democratic elite.
The U.S. government takes in an average of $225 billion a month. Monthly interest costs average approximately $18 billion. That means we can prevent default and still have $207 billion left over. There is not even a remote chance of being unable to pay the interest.
Nevertheless, we’ll soon hear warnings that America’s credit rating will suffer if Congress doesn’t allow itself to spend even more recklessly.
But as former Federal Reserve chairman Alan Greenspan has said, even if the government someday, somehow, did not take in enough revenue to pay the interest on the debt, it doesn’t matter:
“This is not an issue of credit rating. The United States can pay any debt it has because we can always print money to do that. So there is zero probability for default.” (Not a practice I particularly appreciate, but reality nevertheless.)
The Constitution’s 14th Amendment, Section 4, requires the president to make sure the debt is serviced. It states, “The validity of the public debt of the United States, authorized by law … shall not be questioned.” It has to be paid, period, before any other spending.
Why would politicians lie about this? Because they believe they need to keep spending to stay in power, with the American people dependent on the “gifts” they hand out.
An observer of American democracy once warned:
“The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.”
As voters, we are responsible for allowing our elected leaders to be so irresponsible. The federal government is like a household earning $26,000 a year that spends $38,000, with a $169,000 credit card debt.
When faced with the reality that this is not sustainable, the federal household grudgingly cuts a measly $865! And has the audacity to tell the children that if they don’t fork over more money the sky will fall! What about cutting more spending?
The ruling political elite don’t want to cut spending, because to spend is to have power, which some of them crave more than freedom and prosperity for their fellow citizens.
But you and I can stop this. We can refuse to take the bribe and inform our fellow Americans of fiscal reality to offset the political demagoguery.
Feel free to use the following possible tweets without attribution and fire away to all of your Twitter and Facebook followers:
1. Average federal monthly revenue: $225 billion. Monthly debt interest: $18 billion. How is #default possible?
2. “American Republic will endure until Congress discovers it can bribe the public with the public’s money.” –Anonymous
Here’s a 24 second video of Alan Greenspan saying that federal default is impossible: