Economists, Tea Party Jab Boehner and Ryan on Debt Ceiling

WASHINGTON, May 9, 2011 /PRNewswire-USNewswire/ -- The following is being issued by The Tea Party Founding Fathers' Freedom Jamboree:

Top economists, the Tea Party and even George Washington jabbed House Speaker "John Maynard Boehner" (R-OH), his budget chief Paul Ryan (R-WI) and 18 others as "R.I.N.O. Republicans-In-Name-Only" leading the House GOP off a cliff by raising the U.S. debt ceiling in exchange for a few more crumbs from President Obama.   Rep. Michele Bachmann (R-MN) also criticized plans to raise the debt ceiling without major concessions from Democrats.

Brian S. Wesbury, former chief economist to the Joint Economic Committee of Congress, rejected claims by Boehner, Treasury Secretary Tim Geithner and the White House that House inaction to raise the current debt cap past $14.3 trillion would result in default to federal bondholders.  Wesbury said, "Not once in the past 65 years has the monthly interest due on debt exceeded monthly Treasury revenues.  As long as the Treasury Secretary manages cash correctly, the U.S. will not default on its obligations to its creditors.  Global financial markets are perfectly able to comprehend the nuances of this debate.  If the debt limit is used as a tool by some politicians to force serious, significant and durable corrections to the long-term budget deficit, the markets would react in a very positive manner."

Dressed in colonial garb beside a George Washington lookalike, William Temple, chair of the Tea Party National Convention, said Boehner had betrayed the grassroots movement on a promised $100 billion in budget cuts -- and weakly refused to use the power of "strategic inaction" on the debt ceiling to force reform of health care entitlements, including repeal of ObamaCare.  Temple, the man who led 1.9 million Tea Partiers in a September, 2009 march on Washington against ObamaCare, said, "Boehner and his Republicans are fiddling while Rome burns.  The $38 billion in 2011 cuts they claimed were actually just $20 billion – about five days worth of U.S. borrowing! Washington is piling 40 cents per dollar of federal spending, $4 billion per day, onto the national debt and our children's backs, yet these wimpy House R.I.N.O.'s refuse to hide President Obama's MasterCard!"  

Dr. Daniel J. Mitchell, former economist of the U.S. Senate Finance Committee, now of the Cato Institute, was blunter: "Notwithstanding demagoguery from Treasury Secretary Geithner and Fed Chairman Bernanke, the United States does not default if the debt limit remains at $14.3 trillion. The federal government will be collecting, on average, nearly $200 billion of tax revenue each month, and interest payments on the debt average less than $20 billion per month, so there is easily enough money to service existing debt. The only exception to that statement is that default is possible if the Treasury Secretary makes a deliberate (and highly political) decision to not pay bondholders. That won't happen. Fiscal conservatives should hold firm in their demands for real reform in exchange for a debt limit increase."  

Wesbury added, "Servicing the debt and paying for the operations of government are not equivalent.  As long as the debt is serviced, cutting spending, laying-off workers, or slowing down payment for budgeted items is not the equivalent of default."  Once named top economic forecaster by The Wall Street Journal, Wesbury said that recent U.S. credit warnings from Standard & Poor's, the bond ratings agency, were a call to cut Washington's spending, not to increase the national debt.

Bob Vander Plaats, vice chair of the Tea Party's Freedom Jamboree, the 2010 Tea Party candidate for Iowa governor, and president of the Iowa-based Family Leader (Background: The Iowa Caucus Kingmaker - Magazine - The Atlantic, The Road to the White House Is Paved With Pizza - NYTimes.com, GOP Hopefuls Hit Stump With Iowa's Go-To Guy - WSJ.com) said, "America is craving bold statesmanship in the U.S. House and in the White House.  The House GOP must play hardball on the debt ceiling for the sake of  hard-pressed, taxpaying families across the USA.  If nothing else, they must seize this moment to fix health care entitlements."

SOURCE The Tea Party Founding Fathers' Freedom Jamboree

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