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If it can't borrow, the Treasury is telling us that will only write checks as actual tax receipts come in. (AP Photo/File)

Another day closer

BY Dave Ross  on January 8, 2013 @ 5:45 am (Updated: 8:30 am - 1/8/13 )

There's a lot of scary talk about what would happen if the federal government defaults March 27.

But let me read to you what the Department of the Treasury says would happen - because that's where the buck really stops. When the Department of the Treasury talks about consequences, this is the department that writes the checks telling you exactly what it will do if Congress won't let it borrow more money.

I quote from the fact sheet: "...the government would have to stop, limit, or delay payments on [...] Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds."

If it can't borrow, the Treasury is telling us that will only write checks as actual tax receipts come in - and by one estimate, that would mean cutting spending by $74 billion a month. So let's do a little arithmetic: Cutting $74 billion a month would mean cutting about $2.5 billion a day.

The average annual salary in the United States is $50,000 a year. So a default lasting just three days would take the equivalent of 150,000 full-time jobs out of the economy.

That's the number of jobs we just added last month!

'But Dave!' you say, cutting federal jobs should SAVE money. You would think so, except that the official report on the 2011 debt crisis, when federal employees were furloughed - found that it ended up actually raising the debt by $1.3 billion.

The More You Know.

Dave Ross, KIRO Radio Talk Show Host
Dave Ross is co-host of The Ross & Burbank Show on KIRO Radio (weekdays 9-Noon) and never too far from the spotlight.
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Comments (40)


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  • Paul Kersey wrote...
    extortion
    January 8, 2013 5:40 am
    Extortion (also called blackmail, shakedown, outwresting, and exaction) is a criminal offence of obtaining money, property, or services from a person, entity, or institution, through coercion.
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  • logical open mind wrote...
    Davey- whatever we do as a country, we HAVE TO continue the single mother welfare cycle
    January 8, 2013 9:36 am
    It has worked wonderfully! 3.6 years and it's Costa Rica for me. Wont watch what liberalism has and will do to this once great country. Although, maybe the solution is to copy Cal. Illinois, and Europe-that spending system has worked as good as the welfare system!!!
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  • ron prevost wrote...
    But, Dave ------ (and I do appreciate you on the air earlier)
    January 8, 2013 6:09 am
    What part of priority doesn't the Treasury understand ?

    Regardless of any debt ceiling, one heck of a lot of money will still be coming in and available to spend. Sure, interest must be paid first, but that still leaves enough to pain 70-80% of out monthly Federal expenses. SO..............

    PRIORITY. Some how, I think, the Feds will find a way to pay the military. Then Social Security and Medicare will have enough monies (well more than enough IF the trust funds HAD been kept separate AND we hadn't had a 2 year payroll tax 'holiday). There IS, repeat IS, plenty of money for those.

    Next (or first, I guess) we need to fund those folks writing the checks. And after that, we can think about other priorities.

    There will be a big temptation to delay (or not send at all) tax refunds. And a lot of day-to-day functions, like National Parks, can go unfunded for several weeks without too much harm. ... So, March 27, is less of a deadline than you think.

    The one thing that will spur settlement, however, IS one area of funding. ..... Cut off Presidential and Congressional pay FIRST.

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  • SeattleD wrote...
    Only Republitards
    January 8, 2013 6:34 am
    are so retarded that they think that to stop paying your bills is a fiscally responsible thing to do.
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  • It's me! Ha ha! wrote...
    Hey Seattle Dbag,
    January 8, 2013 7:33 am
    How about the regime gets out of my wallet and I can afford to pay what I owe? Instead of feeding your miserable FAT GUT
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  • snikkers wrote...
    Dseattle
    January 8, 2013 11:25 am
    Only an idiot would try to pay a debt by borrowing more money. In the working world that's called Payday Loans and is near criminal with the 500 - 700 % interest they are permitted to charge. Are you really happy with congress making regular visits to the Money Tree? With your money logic my guess is that you're broke. If not, then you're managing your money better than you expect of your elected officials.
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  • zounds wrote...
    Why does the GOP
    January 8, 2013 7:01 am
    hate the military?
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  • Jason wrote...
    There's plenty of money
    January 8, 2013 7:42 am
    The government brings in more than enough to fund critical services and pay the interest owed on the debt. That means maybe they need to prioritize? Military, debt payments and stop everything else. Had congress and past presidents hadn't spent money on items not authorized in the Constitution we wouldn't be in this boat.
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  • Cbrew wrote...
    So what about our Situation are Republicans helping?
    January 8, 2013 8:05 am
    Are you idiots happy with this? You have been voted out to the point that the only power you have left is in the House, and with that power you choose to hold the United States of America Hostage to your demands? The President ran his campaign on his budget, and the American people agreed with him and voted him back in... Republicans then proceeded to cost Average American Taxpayers thousands of dollars this year just so they could stamp their feet and act like petulant little children... Make no mistake Republicant's. If you drag your feet and fight tooth and nail and put us over the other looming cliff's .... You will seal your own death warrant, this will be the Republicant's last cycle in power in the United States. Good Riddance
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  • maplefish wrote...
    Yo Cbew
    January 8, 2013 8:46 am
    You are aware that your DEMOCRATIC run SEANTE has not passed a budget in over 1000 days? You realize these idiots are totally ignoring the law? You realize that Obama wants to eliminate the debt ceiling altogether? You do realize that Obama was addamant about a balanced budget and cutting spending, but has totally RUN AWAY from any type of fiscal responsiblity like the LYING CHICKENSHIT he really is??? Watch the link for the truth about the biggest HYPOCRITE on the PLANET! http://www.youtube.com/watch?v=DyLmru6no4U
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  • Jason wrote...
    His budget?
    January 8, 2013 8:59 am
    He has no budget!!! Neither does the Senate which hasn't produced one in 4 YEARS. It's called check and balances. Someone needs to stop portions of the government from bankrupting the country. How they heck do you think all this can or will be paid for? There isn't enough money to do what has been promised. Even if all income and property were confiscated the value of that wouldn't come close to paying for it all. This is why Europe is crumbling. Maybe Congress should give in and let the country destroy itself? Then what are you going to do????????
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  • sportsguru wrote...
    It's starting to get to the sad level
    January 8, 2013 8:26 am
    That every time they talk about shutting down the government, it's always the seniors, soldiers and everyday Americans get hurt. How about we remove some subsidy money away from somewhere, like maybe wall street, big oil, farming? There are a lot of people that you can hurt beside senior citizens and soldier, I am willing to bet if you threaten them, they will send lobbyist within 24hrs to make sure you get a deal.
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  • mnpat wrote...
    "I quote from the fact sheet: "...the government would have to stop, limit, or delay payments on [...] Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds."
    January 8, 2013 8:26 am
    The feds income cannot currently pay for medicare, medicade, health law, social security and interest on the debt....even if we paid for nothing else. Until the time comes where we stop passing the little hot potato and deal with reality, we just keep borrowing more money which increases the debt and the interest payment. This isn't about income no matter how much you want to tax the wealthy or the middle class, this is about spending less then you take in....so, you either cuts entitlements or you get more people to pay more taxes...pretty simple economics really.
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  • sportsguru wrote...
    I agree
    January 8, 2013 8:33 am
    Entitlement has to be reformed and that includes our Welfare subsidies, but hands off our Senior Citizens, I will fight you to the very end on that, they paid into it and you made a promise and you raided there fund, make it right.
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  • maplefish wrote...
    Guru
    January 8, 2013 8:51 am
    I'm with you on that. HANDS OFF Seniors, children, Vets or those with special needs. We dont need to be cruel or hurt anyone, but $1 TRILLION in Welfare and 50 Million People on Food Stamps is totaly unacceptable. All of which is highly promoted and recommended by Obama. WHo, refuses to admit that theres a SPENDING PROBLEM? I'm telling you, the man is totally INCOMPETENT!
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  • flipper wrote...
    Refund Checks
    January 8, 2013 8:56 am
    Which is why I will have my taxes done by Feb 15 at the absolute latest (as I always do).
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  • maplefish wrote...
    Well, it looks like
    January 8, 2013 8:58 am
    Obama & the Democrats LIED to ALL of us again. They have ZERO INTENTION of taxing only the wealthy. This spending and unaccountability will have a devastating effect on the middle class. Just wait. Remember, it was Obama himself that kept saying over and over and over that ObamaCare was NOT A TAX. Well, we all know how that worked out dont we? Wake up people, this government is going to keep extracting as much money as they can and not just from the wealthy. The less money we the people have, the less power we have. We have become nothing more than servants of the people who are supposed to be working for us? Liars never figure and figures never lie...Well done America. Fat, Stupid, Lazy and broke is how you've decided to go through life....
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