August Budget Chart All News Outlets Would Report If They Weren't Liberal
James Pethokoukis of Reuters published a chart Tuesday demonstrating exactly why all the hysteria about a debt default or missing Social Security check payments is a bunch of nonsense.
If America's news outlets were actually interested in disseminating the truth rather than fear-mongering, this chart or something like it would be part of every report involving the debt ceiling:
What this chart created by the securities firm Goldman Sachs perfectly demonstrates is that there are ample tax receipts coming to the Treasury in August to pay the interest on our debt, Social Security, Medicare, and "essential" defense costs.
The Goldman report this chart came from also claimed:
Using August 2010 spending and receipts as a proxy, the Treasury will probably take in $5-$10 bn in revenue on August 3, leaving insufficient revenues to make Social Security payments partly unfunded even if all other spending is deferred. Since the Treasury has carried a minimum cash balance of about $20 bn since 2009, and currently carries a balance of $74 bn, Social Security payments might still be made by drawing down the Treasury’s cash balance.
So, the Treasury currently has a cash balance of $74 billion. If it takes in an additional $5-$10 billion, it has ample funds to make the August 3rd Social Security payments quite contrary to what the President said or implied in his interview with CBS's Scott Pelley Tuesday.
But even this might not tell the whole story, for a discussion that happened on the House floor Wednesday tells another side. The Social Security Administrations chief actuary Stephen C. Goss told the House Budget Committee:
GOSS: Whenever we pay any money out of the Social Security trust fund, we must redeem bonds. And when we redeem bonds, that actually lowers the amount of debt subject to ceiling. However, in order to pay the benefits, the Treasury must at the same time then issue bonds to the public which therefore increases the debt subject to the ceiling. So there is in effect kind of an offset between the two.
This is actually something I've been thinking about for weeks: as the Social Security trust fund owns Treasury bonds, why would benefit payments increase the debt unless the fund was exhausted?
As Goss explained it to Congressman Tim Huelskamp (R-Ks.) Wednesday, benefit payments begin with a redemption of bonds which means Treasury issues new bonds to the public to pay Social Security recipients.
In Goss's view, this has absolutely no impact on the debt ceiling because the two transactions offset each other.
What this means is that between cash balances currently at Treasury, incoming revenues, and Goss's explanation of how benefits are paid, Social Security recipients appear to have no risk of not getting checks on August 3rd, and any suggestion to the contrary is false.
As for interest payments, the Goldman report said:
There are two basic reasons that interest payments should not be called into question: First, if the August 2 deadline is missed, it is very difficult to see the debate dragging to August 15, when interest payments are made, since we doubt there will much congressional appetite for a protracted lapse in borrowing authority. … Second, the Treasury is likely to prioritize payments. While the sharp fiscal contraction that would result from prioritization would have negative short-term economic consequences and would be difficult to implement, it nevertheless seems likely if necessary.
Add it all up, and the largest securities firm in this nation is telling its clients there's no risk of a debt default or Social Security recipients getting stiffed next month.
Why are most of America's news outlets telling a completely different tale?
- Noel Sheppard's blog
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Comments
SCUBA
Submitted by Jerry Mack on Wed, 07/13/2011 - 7:09pm.
More proof that the lamers are so far into the tank for the Messiah that soon they will begin wearing SCUBA gear 24/7.
HEY!!!!!! I ain't now lamer
Submitted by Scuba Dude on Wed, 07/13/2011 - 9:44pm.
HEY!!!!!! I ain't now lamer and I am definitely not in the tank with any of the libturds. Oh , you weren't talking about me. Nevermind. :-)
Geez, didn't you get the memo
Submitted by amyshulk on Wed, 07/13/2011 - 7:33pm.
Geez, didn't you get the memo - it's all Boooooooooshes fault!!!
Ronald Reagan
Best of the day, NS
Submitted by Gary Hall on Wed, 07/13/2011 - 8:08pm.
Absolutely the best news story of the day, Noel. No wonder the national MSM will skip it.
(;~> gary
Wrong chalkboard, Noel.
Submitted by bkeyser on Wed, 07/13/2011 - 8:21pm.
Wrong chalkboard, Noel.
Perhaps now the stoopid zombie sheeple will wake up...
Submitted by Dave. on Wed, 07/13/2011 - 8:37pm.
...and finally realize that the SS "trust fund" is nothing more than an IOU sitting in a dusty, rusty file drawer in a dank basement somewhere in Virginia.
Nahh, who am I kidding?
Face it, American Idol-watching sheeple, congress long ago stole your retirement savings and used it to buy the votes of the moochers, leeches, and ticks.
And they are still stealing it today.
-Dave
Vote for the American in November
What...
Submitted by dmntd1 on Wed, 07/13/2011 - 9:35pm.
What qualifies at 'other spending' and 'essential defense' in this chart? Not that I'm nitpicking, but if I'm going to disseminate this chart, I need to be able to speak clearly and concisely about what it shows...
We dare not tempt them with weakness. For only when our arms are sufficient beyond doubt can we be certain beyond doubt that they will never be employed.
Not a single government program cut...
Submitted by snowshooze on Wed, 07/13/2011 - 10:06pm.
But default Social Security... kill Medicaid to further Obamacare, close the parks...
But TSA, Dept. of Homeland Security, DEC, EPA, FBI, CIA, OBAMACARE, they are doinf fine and getting expansions to their budgets. Where are the cuts? They are only in the stuff you want.
Just say no to bad drugs...and bad government.
1 plus 1 equals 2 1 male
Submitted by jkwtrading on Wed, 07/13/2011 - 10:50pm.
1 plus 1 equals 2
1 male daddy who is American plus 1 female mommy who is American is or makes 1 natural born citizen. easy enough ..
The fact that Goldman Sachs
Submitted by dscott on Thu, 07/14/2011 - 12:28am.
The fact that Goldman Sachs had this information means the Treasury Secretary had this also. That means Barack Obama knew or should have known these facts as well. To even make such a statement about the payment of Social Security benefits one way or the other requires first hand information and as the POTUS he has direct access to this information via the Treasury Secretary.
Correct me if I'm wrong, knowingly making publicly materially false statements that may affect the price of any security is Securities Fraud, a felony. Barack Obama has clearly made material false statements regarding the payment of Social Security benefits which are paid in part by Special Issue bonds. While the interest/value of the special issue bonds can not be changed, other bonds namely US Treasuries, notes and bonds are subject to market forces which base part of their pricing of securities on PUBLIC INFORMATION. As POTUS, Barack Obama is the official spokesperson for the US government and therefore all pronouncements by him regarding the creditworthiness of any bond(s) is a material fact influencing the price of bonds.
Let me draw a bigger picture for you all. What if Barack Obama, knowingly made false statements which in turn causes the bond market to raise interest rates and therefore lower the principal of US bonds? Certain investors like George Soros knowing this information to be false with assurances via his connections to Barack Obama would swoop in to buy billions in bonds with depressed principle only to rise again when the disinformation is sorted out. The investing public will have been ripped off by this swindle because they were taking Barack Obama at face value as a legitimate source of information. This form of securities fraud is called insider trading. Far fetched? Really? Didn't George Soros profit handsomely getting the oil rigs from the Gulf of Mexico to Brazil off shore oil fields due to Obama's illegal permit ban?
Some people think Obama is a narrow minded ideologue and dunce, no he is more likely a crook. But hey, given it's easier to call a person stupid sans motive than to convince the public that Obama has motive for his malice, I'm going with DUNCE, INCOMPETENT and IDIOT.
I don't have to know anything
Submitted by jdhawk on Thu, 07/14/2011 - 4:49am.
I don't have to know anything that obummer, pelosi, tingles, et al have said on this matter. All I have to do is look up the yield of treasury bills and bonds. What I know from that information is that our 10 year treasury bond is yielding about 3% and this is the lowest yield of the year so far.
Then I look at Greece's 10 year government bonds. They are 16% +!
See a difference? Can you tell which country is in crisis?
If you are a lamestream media type, the above is too complicated. Wait for the obummer morning briefing to get your talking points.
I think he is a "dick," too!
Why are most of America's news outlets telling
Submitted by russedav on Thu, 07/14/2011 - 3:06pm.
a completely different tale?
Because they're not "news outlets" but lying immoral degenerate fascist obamanation whores.
It's okay dude
Submitted by GW on Thu, 07/14/2011 - 4:43pm.
You're among friends here. You can be totally honest without holding back.
Geez, didn't you get the memo
Submitted by bagtree on Thu, 03/29/2012 - 5:37am.
Geez, didn't you get the memo - it's all Boooooooooshes fault!!!
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