And the Debt Bomb Ticks On
At best, this Congress will only slightly reduce the rate of speed at which we are heading toward a debt default.
By Patrick J. Buchanan at CNSNews.com
EXCERPTS:
There is a feeling that at last we are coming out of the Great Recession.
But has the debt bomb really been defused?
On Jan. 20, The New York Times had two front-page stories that ought to concentrate the mind.
“A Path is Sought for States to Escape Their Debt Burdens,” was the headline over the first, which reported that bankruptcy lawyers were being consulted by congressional aides on how states like California might go into Chapter 9, “leaving investors in state bonds … possibly ending at the back of the line as unsecured creditors.”
Should states win the right to seek bankruptcy protection against their state bondholders, the $3 trillion municipal bond market, which has lately been taking hits, could crater.
The federal deficit for the fiscal year 2011, which ends Sept. 30, is projected at between $1,200 billion and $1,500 billion.
Thus, the $100 billion in cuts the firebrands are pushing, and few think they will get, add up at best to 8 percent of the deficit and 2.5 percent of the $3.87 trillion budget Obama proposed.
Thus, at best, this Congress will only slightly reduce the rate of speed at which we are heading toward a debt default.
FULL ARTICLE
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