Default Not Inevitable
JULY 27, 2011 by SHELDON RICHMAN
After paying creditors [in August], the government will have $87.8 billion on hand in ready cash in August to spend on its myriad programs — such as Social Security, wars in the Middle East, subsidized farming and maintaining a court system. With an un-raised debt ceiling preventing the federal government from borrowing more money, it will indeed be unable to fund the full range of these programs.
To renege on promises to pay subsidized farmers and other non-creditors, however, is not to default; rather, it’s to belt-tighten.
Election after election, Americans go to the polls and elect representatives who frequently promise to make the “tough choices” about allocating scarce government revenues. Now is the time to make those tough choices.