Of course, it might not be lying demagoguery, it could be ignorance; with Obama that question is always present. Obama says that if August 2 arrives without raising the debt ceiling, Social Security checks may not go out. Law professor Michael McConnell, a former federal appellate judge, explains why Obama is wrong:
The Social Security trust fund holds about $2.4 trillion in U.S. Treasury bonds, which its trustees are legally entitled to redeem whenever Social Security is running a current account deficit. Thus, if we reach the debt ceiling (which I continue to think is a remote prospect, even if less remote than it seemed a week ago), this is what will happen. The Social Security trust fund will go to Treasury and cash in some of its securities, using the proceeds to send checks to recipients. Each dollar of debt that is redeemed will lower the outstanding public debt by a dollar. That enables the Treasury to borrow another dollar, without violating the debt ceiling. The debt ceiling is not a prohibition on borrowing new money; it is a prohibition on increasing the total level of public indebtedness. If Social Security cashes in some of its bonds, the Treasury can borrow that same amount of money from someone else.
…President Obama is therefore wrong when he says that failure to raise the debt ceiling might result in not sending out Social Security checks.
What do you think the chances are that, having been corrected, Obama will retract his contemptible effort to scare the elderly? I know, just kidding.
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