How to Freeze the Debt Ceiling Without Risking Default

Next year, the government will have 10 times more income than it needs to honor its interest obligations.

Pat Toomey at The Wall Street Journal

EXCERPTS:

In fact, if Congress refuses to raise the debt ceiling, the federal government will still have far more than enough money to fully service our debt. Next year, for instance, about 6.5% of all projected federal government expenditures will go to interest on our debt, and tax revenue is projected to cover about 67% of all government expenditures. With roughly 10 times more income than needed to honor our debt obligations, why would we ever default?

If we do not raise it, the government's tax revenue will enable us to fund roughly two-thirds of projected expenditures, including interest payments. Without the ability to borrow the other third, spending cuts would be sudden and severe: Projects would be postponed, some vendor payments would be delayed, certain programs would be suspended, and many government employees might be furloughed. Default would easily be avoided, but these cuts would certainly be disruptive. That's why I hope we can avoid this scenario.

FULL ARTICLE

http://usactionnews.com/2011/01/how-to-freeze-the-debt-ceiling-without-risking-default/

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