Many items in the Federal Budget are "non-discretionary" meaning that Treasury authority to spend for these items is not a voted appropriation every year. Many are probably familiar with the major entitlement programs such as Social Security and Medicare, the appropriations for these two major programs that account for a large percentage of Federal spending are actually not voted on by the Congress, they are part of non-discretionary spending. The amounts that recipients receive is based on past amounts, annual COLAs are computed by BLS and Treasury automatically adjusts the deposits made to the enrolled citizens.
Another item that is not voted on is the interest the Federal government pays on the "debt", that is interest on Treasury securities. From Wikipedia: "Funds to make federal interest payments have been automatically appropriated since 1847". So Congress has not voted on paying the interest on the "debt" in 163 years! The Treasury Dept. has enjoyed 163 years of autonomy in arranging these payments.
I wonder if the debt doomsday crowd realizes that for the US to default on it's interest obligations, the Congress and the President would have to take a positive action to pass completely new legislation that would overturn a law that has 163 years of legal precedent?
This does not seem likely to say the least.
6 comments:
test
I HAVE TWO REQUESTS :
1. DECONSTRUCT THE MYTHOS OF GOV. PERRY OF TEXAS WHO IS A TEA DUMPER WHO SAYS HIS FISCAL POLICY SAVED TEXAS FROM THE RECESSION. TEXAS HAS A 30% DROP OUT RATE, SO YOU CAN HAVE CHEAP LABOR THERE. ...
WHAT ELSE ?
2. THE COST OF THE IRAQ WAR AND AFGANISTAN ARE OBFUSCATED INTO THE RECENT FINANCIAL 'CRISIS.' WAS THE UNFAIR GOLDMANSACHSMORGANSTANLEY.COM WEIGHTING ON OIL COMMODITIES A TRICK TO RAISE OIL PRICES SO AS TO HELP "PAY" FOR THE WARS ? ... SINCE OIL PROFITS WERE SUPPOSED TO REIMBERSE US ?
THE COUNCIL ON FOREIGN AFFAIRS OFFERS ONE ESTIMATE THAT THE IRAQ WAR "DEBT" IS $5 TRILLION WHICH IS HALF OF THE "TOTAL" DEBT WHICH DOES NOT TAKE INTO ACCOUNT ANY ASSETS CREATED OF COURSE - LIKE SECURITY, BUT I DIGRESS.
http://www.cfr.org/publication/15764/cost_of_iraq_war_hinges_on_oil_question.html
Goog,
1. TX fiscal policy may have prevented TX from having state fiscal problems like CA, NJ, IL, etc...but if TX avoided the bulk of the current recession yes its probably due to national factors beyond the Govs. control IMO. Like energy prices, federal outlays inordinately reaching TX, etc..
2. Mike has identified that the belief that we are "spending money in Iraq" is false. Most if not all of the fiscal balances that the DOD transfers to soldiers ends up in a credit union in Ft Hood or Ft Bragg. the amounts that DOD tranfers to contractors ends up in their accounts with depository institutions here in USA also. So this "we're spending money in Iraq" line is also a big myth.
My current belief on oil is that Suadi's are setting the price via Mosler's "swing producer" mechanism. Our leaders are making their second biggest mistake by not addressing this head on via the fiscal channel.
Our leadership is either ignorant or corrupt, either way it is the same result to us, BAD!
hang in there!
as spending and creating assets - I suppose that the $5 trillion ( or up to ) spent on the Iraq war is just another hole like the Republicans deficit hawk.
War = "Debt"
That's an easy one to punt back to the deficit hawks.
Ironically the Democrats don't even use that, and I suppose they are not adept to figure it out.
The debt is the from the War, stupid ... so to speak.
Of course for us, the debt is just "debt" ... it is really a form of spending that has assets created and lives sustained ...
hi
OK -
IF YOU ARE APPROACHED BY SOMEONE WHO IS POACHING FOR THE "DEBT & DEFICIT", WHEN THEY SAY ANYTHING ABOUT OUTRAGEOUS SPENDING, YOU CAN SAY :
" WHAT YOU'RE REALLY SAYING, MR OR MRS DEFICIT HAWK, IS THAT YOU ARE DISSATISFIED WITH THE IRAQ WAR AND ALL IT'S TRILLIONS OF DOLLARS OF DEBT AND HOW IT WILL PUT OUR GRANDCHILDREN IN CHAINS OF SERVITUDE."
I'D LIKE TO SEE BARF LAUFFER RESPOND TO THAT ONE !!
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