Don't Buy It: The Sky Won't Fall If We Don't Raise the Debt Ceiling
April 20, 2011BEGIN TRANSCRIPTRUSH
: Michael in Villa Grove, Illinois. Welcome, you're up next. It's great to have you here on the EIB Network.
CALLER: The other than honor is mine, Rush. I appreciate you taking my call.
RUSH: Thank you, sir.
CALLER: I keep hearing that if the US doesn't raise the debt ceiling we will default on our loans. Now, I definitely agree with you that there's hardly any chance that we would default, but should that happen what actually happens? I know our AAA credit rating would probably go down, and we'd have a much higher interest rate if we borrowed money in the future, but what can actually happen? If we default on our home loan, then the bank can foreclose on our home and take our home, right? But what happens in this case?
RUSH: Yeah, but we can't. Here's the point. It's a scare tactic. It really isn't possible. There is always money coming in. The government can count on tax revenue from any number of sources and activities. There will always be money coming in. They can always print money. This default business is a straw dog. It's a straw man they're throwing out there to you. You want to know what the actual manifestations are of an official default would be?
CALLER: Yeah, absolutely, because just looking in recent history we were listening to the media and they were talking about how bad the government shutdown would be.
RUSH: All it means is, we won't be able to borrow any more. That's all it means. All it means is: We've gotta live within our means.
CALLER: I don't think that would be too bad, then.
RUSH: No, it's not! I shocked a lot of people yesterday when I said, "Not raising the debt limit is an option." Who's to say it's not? Look, we sit here, the Tea Party gets mobilized and causes a huge election results in November predicated on reducing debt -- which means stop spending. At some point we have to! Okay, here's a chance: We gotta raise the debt ceiling. Why is it automatic we have to raise the debt ceiling? Why is it automatic we have to keep spending? All we would have to do is to reduce spending to current revenue levels. That's what everybody else does!
We're being prepped here for another calamity, apocalypse just they did with TARP and the auto companies and everything else -- and it will probably work. They tried it with the government shutdown. But the debt ceiling is just a de facto Balanced Budget Amendment, is what it is. The debt ceiling says, "You can't borrow any more than this." That means the government has to live within that level of debt. Well, to a lot of people, it's plenty high. It's plenty high enough for us to be able to live with -- and, of course, at some point we are going to have to stop this. Everybody talking about this has got to realize that it's not just words. At some point there has to be some actual realistic behavior associated with the words here.
But even if, even if this was in default that you asked me about which results in our inability to borrow any more money, that still is months away from not lifting the debt ceiling. It's simply... It's not something imminent. There is no apocalypse here. There was no apocalypse with TARP. There was no "My gosh, we gotta act in 24 hours or the whole world financial system will collapse!" That's the way they get what they want. It's the way they've been operating -- well, the Democrats, forever, but in the recent context -- the last three to four years.
That's how we've ended up where we are is being told that we've got to allow -- stand by and let -- this outrageous emergency spending take place, otherwise it's all over for all of us. When it was not going to be all over. There was no apocalypse for not bailing out GM. Speaking of bailing out GM, now Obama's selling GM stock at $11 billion loss to the taxpayers. He's getting that out of the way before the reelection campaign starts. You know, every state has to live within its budget. They can't print money, and if it gets so bad that people won't lend the state any money, what happens to the state? They keep functioning. There's no reason to be talked into a panic over this.
The sky's gonna still be blue if we don't raise the debt ceiling.
RUSH: Patrick, Albuquerque, New Mexico. Hello, sir. Rush Limbaugh. The EIB Network welcomes you here.
CALLER: Rush, how are you today?
RUSH: Very good.
CALLER: Good. Hey, longtime listener, first-time caller. I just had a real quick question. You were talking about how it might take a catastrophe to raise the debt ceiling, and my question to you would be: How would the government use, say, a Japan-style catastrophe that would happen here on the continental states? Would that be a case to easily raise the debt ceiling?
RUSH: Wait. It might take a catastrophe to raise the debt ceiling? I didn't say that.
CALLER: I think you said something like that. (giggles)
RUSH: What I said about the debt ceiling is it's not the apocalypse if we don't, but I didn't say it would require one. It won't require one.
CALLER: Well, I guess --
RUSH: I mean the --
CALLER: -- I was saying how would they use that? How would the government use that to raise the ceiling?
RUSH: What, an earthquake with nuclear ramifications here?
CALLER: Possibly, or any kind of 300 to 400 to $500 billion... you know?
RUSH: I'm not sure I get that. None of that's gonna be necessary. Obama is just gonna get up one day and raise it, he's not gonna need an event to happen. In fact, most of them -- the vast majority of Republicans and Democrats -- are already resigned to raising it. The Republican position is, "We're gonna get some cuts! We're gonna get some significant budget cuts in exchange for our vote to raise it." Unless I'm misunderstanding something, I think the catastrophic event you're talking about would be something that would cause us not to raise it.
It's gonna require something catastrophic for it not to be raised. The mature among us know it's gonna go up. We're gonna raise the debt ceiling. That's a fait accompli. I just don't think it needs to be! I think an option of not raising it exists, but you could probably put me and the people who think this way in a thimble (a large thimble but still a thimble). There aren't that many of us. But I think conventional wisdom is it's gotta go up. The conventional wisdom it is gonna go up. The question remains: Just how tough are the Republicans going to be in demanding concessions in spending that it goes up? Thanks, Patrick, for the phone call.
RUSH: I want to remind you of some things that were a reality in 2008 as we talk about this debt ceiling business because I know that I am one of the few people who would make the claim that we don't need to raise the debt ceiling. It's such conventional wisdom. "It's gotta go up, why, the United States will default, why, the United States has to be able to spend money." It won't stop us from spending money. I'm told that there's 90 days of unspent money elsewhere in the budget that would cover 90 days, and even at that there's still revenue coming in. But it's all about how this is sold. It's identical to 2008, 2008, apocalypse. Remember in 2008 the way they got to us was the subprime business and it was in trouble but who was hurting? The Wall Street people were hurting in subprime, that's who had to be bailed out, not us. They asked us to bail them out and they did it by creating this notion that the world financial system would collapse.
But if you will remember back when this subprime stuff became top drawer news and we were talking about it in relationship to this apocalypse, 95% of people who had mortgages were paying them. There was not a crisis in the mortgage market. There were not people defaulting on their mortgages. Ninety-five percent of the people who had 'em were paying them. There was any number of things we could have done, but no, what do we do? We ended up co-opting McCain and Bush, and who did we bail out? We bailed out people who in a vast majority of numbers voted for Obama. We bailed out high finance execs on Wall Street, easily majority of whom voted for Obama. Remember I was joking back then about, well, the reason Paulson's doing this is he's gotta make sure his buddies don't lose their vacation homes in the Hamptons. Folks, that was damn near close to right. It was damn near close to what was going on. A bunch of highfalutin, high rolling people got themselves in trouble in this subprime business. You can trace it back to the government forcing them into this position with the Community Redevelopment Act and all that, still the reality on the ground was that that's who we were bailing out. Paulson was protecting his buddies.
The same thing is happening now. There are people, I don't want to mention names 'cause I want to show up here tomorrow, but there are people, you'd know the names, their financial portfolios benefit from a declining American strength. Some of them are Republican. Some of them are Democrats. They don't define themselves as -- hell, we bailed out General Electric, for crying out loud. We bailed out General Motors. We bailed out the UAW, all of this while we supposedly had an apocalypse on the other side of it. If we didn't bail out GM, if we didn't do TARP, if we didn't bail out all this the world financial system was gonna collapse. None of that was true, and the same scare tactic, the same technique is being ginned up now on the debt ceiling. There is no default imminent if we don't raise the debt ceiling. This is a major moment for our cause. We sit here and say we've got to stop this spending, we have got to reverse it. Here we go, debt ceiling, call a halt to it. The idea that we're out of money is ridiculous. We're not.END TRANSCRIPT