July 17, 2011 – – The U.S. Federal Government Debt Ceiling Crisis: It’s getting close to “crunch” time on the federal government debt ceiling. Tax receipts, up to the August 2nd cutoff, total about $172B (Billion). Spending totals $307B, leaving a “hole” of $135B. According to the consensus of analysts, the chart above reflects who will get paid and who will not. The Social Security checks would still be cut, but not income tax refunds. Medicare and Medicaid would be kept going, but not food stamps. Military contractors would still be paid, but not the troops.
Ratings agencies Moody’s and S&P, rarely accused of being early on the scene, threatened to sever the United States prized AAA credit rating. The pair cited political gridlock regarding the debt ceiling debate and the nation’s uncertain financial situation as cause for concern.
The “Other” category of $73.6B includes The Justice Department, The Department of Labor, The General Services Administration, Commerce, NASA, Health & Human Services, The Department of Energy, the EPA, The Department of the Interior, the Federal Transit Administration, The Federal Highway Administration, and a few others.
Ireland, where they bet on anything, as the odds of a default at only 20% for and 80% against. I think that, given the political climate, and other factors, it’s a 50/50 proposition. A U.S. default would be catastrophic for the world financial and economic markets. Surely Great Depression II, would follow. What bizarre and surreal times we live in.
The Master of Disaster