Bachmann tries to tell BilO that we have enough money coming in to pay off what we owe our creditors along with the big entitlements, and even tells him it’s provable by just looking at the books. But BillO in his stubbornness refuses to entertain such an idea and continues to believe what Geithner has said about catastrophic consequences of not raising the debt ceiling on August 2nd. It’s as if he has bought into the left’s narrative and believes Bachmann isn’t smart enough to convince him or something – at least that’s the vibe I got. All I wanted to hear him say was that he would check into it but as I said he wouldn’t even entertain the idea.
Despite the host I thought it was a very good interview for her. She said what needed to be said, confidently, that Geithner is wrong and refused to take BillO’s bait of calling Geithner a liar. I’m not sure why he took it there but he did. The normal first reaction would be that he’s just wrong.
I actually think he is lying, especially in light of what I know as well as what Goldman Sachs recently said, courtesy of Jim Pethokoukis:
There are essentially two plausible outcomes. One is that the two sides agree on a deal in coming weeks, with headline cuts of $2+ trillion over a 10-year horizon, probably mostly composed of discretionary spending caps that gradually squeeze projected outlays in a highly back-end loaded fashion. The other outcome – whose probability has unfortunately risen in recent weeks – is that there is no deal by August 2. Even in this case, we continue to believe a default is extremely unlikely, as the Treasury would likely prioritize interest payments, Social Security and Medicare payments, and “essential” defense payments over other types of spending, and should have enough revenues to cover the essentials. But make no mistake: the negative consequences of failing to make other payments would be very severe. In the month of August, projected outflows exceed projected inflows by about $150bn (not annualized), or about 12% of GDP. Even if we allow for a further decline in cash holdings in the Treasury’s account with the Fed, this means that a failure to reach a deal would imply a huge, immediate fiscal retrenchment. The economic consequences of such a retrenchment would likely force a deal within a few days.
Maybe BillO should expand his list of reliable sources. Pethokoukis is a good one.
In any even I say kudos to Michele Bachmann on a good interview with an ignorant and gullible host:
—