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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 (50)


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  • dbhawkfan84 wrote...
    People won't get it until it's too late.
    January 8, 2013 10:28 am
    Period.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • CH wrote...
    time to jump into the flounder pool . . . .
    January 8, 2013 10:52 am
    water sure is brown, must have a lot of republicans here today. Hey B Law could you hit the bottle and give he ha a run for 'his' money.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • CH wrote...
    if the fup house republican fools send We Americans over cliff # 2 . . . .
    January 8, 2013 10:57 am
    hope someone strings them all up by their toes.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • mnpat wrote...
    This is not a finger pointing exercise
    January 8, 2013 11:15 am
    Entitlements need to change........we need to spend less than we take in.......more poeple need to pay or those that do pay taxes will pay more........this or any other country can't continue to borrow more to pay there bills..........there is a point of no return.......there is no sugar pill to swallow, to fix this frickinmess is going to hurt everyone, the sooner we understand that the less pain that goes around.
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  • CH wrote...
    the sooner we understand that the less pain that goes around . . . .
    January 8, 2013 1:53 pm
    explain that to the congress mouse republicans. boner as the leader. end of story!
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Forrest wrote...
    When Republicans,
    January 8, 2013 2:27 pm
    want to cut corporate welfare and defense as well as welfare to the old and sickly, I will start listening to them. Until then, I view them through a jaundiced eye for the hypocrites that they are.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • It's me! Ha ha! wrote...
    Things are far worse than most people think...
    January 8, 2013 2:58 pm
    roomtemp that is what I usually try to portrait, (in my own way just to irritate the Obama supporters here!), judging from my lack of disposable income.

    Yes I make more today than I did under President Bush. Not a lot more I may add, but I do seem to have less to spend and now I will have even less with tax increases and paying for substandard government administered health care.

    Let me keep more of my money. I promise to put it back into the economy!

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • Ron_Spins wrote...
    A budget from the Senate
    January 8, 2013 3:10 pm
    The debt limit can be raised if we get a budget from the Senate , it's almost 1400 days late now! And it's actually required by law.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • roomtemp wrote...
    @It's me! Ha ha!
    January 8, 2013 3:53 pm
    "but I do seem to have less to spend"

    You're being hit on both sides. The taxes are going up while the purchasing power of your money is declining. Most people won't figure it out until they're paying $50 for a jar of peanut butter.

    My personal micro-revolution has already begun. I'm moving away from cash, unplugging, and bartering goods or services for everything I possibly can. Admittedly, I'm a bit rogue, and not everyone is in a position to do this. Fortunately my needs are few.

    I feel no moral obligation whatsoever to pay for flying drones over Pakistan, sending our troops to 35 countries in Africa, or someone who thinks they deserve 'Obama money'. F# em... Let it burn. I'm not their slave. I doubt if I'm alone in feeling this way. Wait till they see their 'fair share' this year. lol

    "Let me keep more of my money. I promise to put it back into the economy!"

    Amen brother, I know that you would. But the economy is rotten at it's core. It will get worse before it gets better.

    At some point, what they're doing stops looking like malfeasance and starts looking like malevolence...

    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • It's me! Ha ha! wrote...
    Amen
    January 8, 2013 4:37 pm
    Bro!
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • hawks$life wrote...
    Chairs and Cherries!
    January 8, 2013 4:57 pm
    nuff said
    { "Thumbs Up":"1","Thumbs Down":"-1" }
  • sohojo wrote...
    Independent
    January 8, 2013 7:04 pm
    You should never rely on government to take care of you. For one, they will let you down and as soon as you accept their hand outs they will eventually come a callin'. I would be very careful to trust this rabid monster we call government today.
    { "Thumbs Up":"1","Thumbs Down":"-1" }
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