Default: Fast Approaching A Concrete Wall At 100MPH

04-01-2011 • Market-ticker.org

There appears to be a lack of comprehension as to what Congress is proposing to do. First, all revenue bills must originate in the House. Since spending inherently is a revenue activity, this means it must originate in the House. The House can therefore choose not to authorize spending through either action or inaction. As for "default", there is enough incoming tax revenue to pay the interest. Therefore, such an event as contemplated would not be a "default." It would, however, act as a hard stop on spending beyond the amount brought in via taxes less the interest payments. The apoplexy that is coming from the left on this, including the referenced article, simply shows how desperate the FSA (that's the "Free **** Army" for those who can't figure it out) is to keep the punchbowl filled. This, despite the fact that there's no evidence that we can keep it filled, or that we can find a way to wean the people off the government teat. Indeed, the exact opposite is in full bloom at this point in time: Where's the ability to get this under control? Absolutely missing, that's where.