The Debt Ceiling - Part 2

I mentioned in my last blog that I was scared of the President, but that's not entirely true.  Baffled, flabbergasted, annoyed, confused, and appalled by may be a better way to express my views.  After his press conference today, I felt the need to vent again.

First, let me start with Obama's interview on CBS from a few days ago.  In that interview, the President stated, "I cannot guarantee that those (Social Security) checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it."  This, in my opinion, is one of the most outlandish quotes that any President has made.
If you haven't figured it out already, which is what Obama is banking on, let me explain.  It is the job of the Treasury department to take in revenue and disperse funds.  The Treasury takes in approximately $200B/mo in revenue.  The cost of Social Security is approximately $49B/mo.  Now, regardless of whether or not we pass legislation to raise the debt ceiling, that revenue still comes in.  It is the job of the Secretary of Treasury to determine how that revenue is dispersed, and who do you think the Secretary of Treasury was appointed by and takes his orders from?  That's right!  The President of the United States.  Obama is, in a sense, shaking his finger in the face of the American people and saying, "You do what I want, or I won't pay you!"
The President's press conference today was much along the same lines, although maybe not quite as audacious.  I don't have the exact quote, but he basically said that if we didn't raise revenue (taxes) that interest rates for millions of Americans would go up, effectively putting a tax increase on the American people anyway.  Like so many Obama statements recently, this simply isn't true.
I used the example in my last blog of the average American family, so I'll continue with that.  If a family has debt to income ratio problems, is late on their payments, or simply don't make their payments, then their credit rating goes down.  The next time this family applied for a new loan, then, if approved, would probably pay a higher interest rate than a family who prioritizes their spending and balances their budget, as they should.  In addition, those families with triple A credit ratings, will always be able to get the best available interest rate available regardless no matter where the Prime rate is.
Now, the few things that I see wrong with the President's statement from today.  If America defaults on our obligations, then it's true that it would have a negative effect on our country's credit rating, but keep in mind that it is the Federal Reserve that sets the Prime rate, which is what major lenders set their interest rate by.  The reason why the Prime rate is at one of the lowest points that it's been in history is because they are trying to boost the economy, which given the current economic situation, it makes sense.  However, are the Prime rate and our Nation's credit rating one in the same?  If the Nation was to default on our debt to say, China, would that mean that the Federal Reserve would automatically be required to raise the interest rate?  To me again, it sounds like President Obama is saying, "If you don't let me raise taxes, then the Fed is going to raise interest rates, and you're going to be taxed anyway."
The conservative members of Congress have been saying all along that they can handle the debt crisis with spending cuts and closing tax loopholes that would generate additional revenue without raising taxes.  They are even working on legislation now that would not only cut spending but would raise the debt ceiling (one more time), which is what the President wants and is what the whole crisis is about in the first place.  I also mentioned in my last blog that there was an awakening going on in America.  I just hope the American people can start to listen to what Obama is meaning and not what he is saying.