04.12.2011 0

Default A Big Lie if Debt Ceiling Not Raised

The Debt Star

The Obama administration is pushing a lie–and a big one to boot. But when aren’t they pushing falsehoods for political gain?

The current mistruth from the Obama administration is about what would happen if the debt ceiling is not raised. They claim that if the debt ceiling is not raised that the U.S. would default on its debt. This is completely false. The U.S. would not default–rather, the U.S. Treasury would not be allowed to issue new debt.

As Bill Wilson, the President of Americans for Limited Government (the parent org of this website) put it:

“A big lie being perpetrated by the Obama Administration and mainstream media is that if Congress does not raise the $14.3 trillion national debt ceiling, the nation will default on its obligations.  This is nothing more than a scare tactic.  Just like a consumer credit limit, if the debt ceiling is reached, this will simply mean that the Treasury cannot issue new debt.  The existing debt could still be refinanced, but interest owed on the debt would have to be paid out of revenue and the budget would also have to be balanced immediately.  That is not a default.”

“The Obama Administration needs to stop lying about the debt ceiling, and level with the American people about the dire fiscal catastrophe the nation faces with a debt so large that it cannot be paid.”

Don’t fall for the spin coming from the Obama administration.

To read more on the Debt Ceiling, check out this post from January —> The Debt Ceiling Dilemma

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