Debt Ceiling Claims by Media and Politicians: I Call BS

NOTE: Originally I posted this to Facebook as a note on Friday, July 29, 2011 at 9:33pm.

The sky is falling again, according to false claims spread by news reporters and politicians about the extent of a possible government shut down if the debt ceiling for the federal government is not raised by August 2nd through a deal passed by Congress between Republicans (anti-raising debt ceiling) and Democrats (pro-raising debt ceiling). Here are some of the false claims:

If the debt ceiling is not raise, the federal government will shut down and there will be anarchy! Wrong.

If the debt ceiling is not raise, old people and military will not get their monthly checks! Wrong.

If the debt ceiling is not raise, the US credit rating could be lowered and cause interest rates on loans to skyrocket! Wrong.

If the debt ceiling is not raise, the world will end! Wrong.

There would NOT be an absolute shut down of all federal departments and services. A little investigative work proves this and it is being agreed upon by people who know what they're talking about. The fed brings in 175-200 billion a month. Here's the big items people are concerned about:

Interest on debt - 29 billion

Social Security (Old people checks) - 49 billion

Medicare and Medicaid - 50 billion

Active Duty Military (Checks, benefits) - 3 billion

Veteran’s Affairs - 3 billion

= 134 billion

Leftover amount is between 41 and 66 billion. So old people, sick people, and military are taken care of and there is plenty of money to fund the essentials like the CIA, border patrol agents, and a few other services. So NO anarchy.

The US credit rating has already started to be downgraded by credit agencies. The credit company Egan-Jones has already downgraded it from AAA (top score) to AA+ (not so great but still good) based on the US debt standing at more than 100 percent of its gross domestic product, not another reason. It is a bad thing, but the effect would be like going from an 800 credit score to 680. Interest rates will be higher for new loans the federal government takes out, but interest rates will not not skyrocket. If the downgrading of the US credit score has any effect on private citizens it will be small.

Obviously, the world will not end if the debt ceiling is not raised. Do we even need to discuss this? Anyone telling you the world is about to end is trying to scare you into doing their bidding. Don't listen to them. Duh.