Sunday, July 31, 2011

Debt, Deficit, and the Un-Seriouness of Washington in the Debt Ceiling Debate

As someone that cares deeply about the future of our greatest nation on earth, and as a political junky, I have watched a lot of the debt ceiling debate on C-Span over the course of the last week. Of course from my “objective” perspective, the big government types of both parties are the ones at fault in this conundrum. While the Tea Party members of the house seem to be the only ones typically standing on principle, it looks like the latest deal now in the works will not contain many of the critical aspects with which they insisted must be included. With the loss of their support on this Reid/McConnell/Boehner Frankenstein compromise, one can only assume that the party leaders on both sides are looking at how to get this bill passed despite the Tea Party opposition. In other words they are trying to appeal to the Democrats and “moderate” big-government Republicans in the House of Representative. Therefore, business continues as usual in Washington D.C. and that compromise is NOT what our country so desperately needs right now.

Various reporting agencies have threatened downgrades in America’s triple A bond rating if our debt situation is not addressed. Indeed, Standard and Poors chairman of the company’s sovereign rating committee, John Chambers, has recently said that a minimum of "$4 trillion would be a good down payment… A grand bargain of that nature would signal the seriousness of policy makers to address the fiscal situation in the U.S.".

So what do our elected officials do in their “compromise”? Well the current bill that both houses of congress now seem hopeful about, and the White House has indicated would be acceptable to it, is estimated to be a $2.8 trillion dollar deal. Early reports say that $1 trillion in cuts in spending will be decided by lawmakers, while the remaining $1.8 trillion will be decided by a joint commission. Stop me if you’ve heard this one before! In attempts to appeal to the Republicans, there will be no tax hikes in the bill, while the White House will get its way and not have to address the issue again until after the 2012 elections. No indication of a balanced budget amendment were noted in the report, which will surely be a deal killer to many in the Tea Party caucus.

I suppose I should be happy in the fact that the debate has at least shifted to the proper perspective, thanks to the principled stand of the Tea Party Republicans. Indeed, President Obama had requested a clean bill authorizing the extending of the debt ceiling without any other provisions attached. Obviously, this did not happen; however, had those stalwart few not been there to declare “No!”, one suspects that this whole debate regarding the critical necessity of our cutting our debt would never have occurred in the first place. The Senate would have passed, and the House would have grumbled but reluctantly passed this debt ceiling extension otherwise, I suspect.

The ironic thing is that this bill still does NOT cut our debt one single cent. It simply cuts our deficit spending. In other words, there is no reduction in the $14.5 trillion in national debt that America owes. We simply are cutting how fast we are deficit spending and thus adding to that debt. No wonder that credit rating agencies are threatening to downgrade our bond rating.

The pernicious Democrats lead by Reid, Schumer, and Durbin in the Senate have been particularly disingenuous in demagoguing the issue in their strict adherence to partisan politics. They decry that they are not the ones preventing a deal being made and that they are serious about reducing our spending. This is unadulterated horse apples! The Senate Democrats, under Senator Reid’s majority leadership, have failed to even abide by their primary obligation in producing a federal budget for over 800 days. In other words, we are into the third year of funding our government through continuing resolutions because of the failure of responsible leadership in putting together ANY budget in the Senate, let alone one that actually would have us live within our means.

The House of Representatives, under Speaker John Boehner, produced and passed a budget that was guided by the well-thought-out and serious Ryan Plan. Further, they passed a serious bill that they sent to the Senate called Cut, Cap, and Balance that would begin the process of putting our financial house in order. The Democrats in the Senate and the White House have balked at these and tabled them accordingly, and yet have produced no plan of their own in response. They then have the audacity to state that it is the Republicans in the House that are stalling the process and playing politics. Sharon Angle may very well have been a bird of a different feather, but one can’t help but think that had she won her race against the politically intransigent Harry Reid , that we would indeed have had one less quack in the Senate.

Anyway, the deal is seemingly promising in its likely passage. The seriousness of the issues have been scuttled. The cutting of the debt in this deal will be non-existent, and the business in congress will continue as is typical. We will very likely be downgraded in our bond rating accordingly, despite this “wonderful” compromise deal, and frankly we deserve to be downgraded. When that happens, the Democrats and the President will claim that the stalling by the Tea Party in the House caused this to happen, and the sycophantic statist media will parrot that propaganda.

Unless the facts get out and people pay attention to the dire seriousness of the problem that we MUST cut our debt and not just our deficit, by definition the amount our government owes will only continue to increase. Indeed, if left on this current trajectory, our spending will equal our yearly GDP within a decade. No nation can long survive such profligate spending, and simply agreeing on a politically expedient compromise bill that does not address any of the root causes of the problem simply assures that the impending doom awaiting us will be here before we all know it.


Anonymous said...

Amazing spectacle. Amazing time to be alive.

What do you think of the BBA? Last night Kudlow gave a fascinating reason for not wanting it, namely, that he doesn't want the budget to wind up in the courts. We don't need judges running the country (any more than they already do).

John Myste said...

It is not fair for you to give such a thoughtful analysis of the day's events when I don't have time to take it apart. My goal is to make the time, but I am not sure I will find it. I hope I do, as I am sure you do.

T. Paine said...

CONSLVTVS, I think the time has far come and gone for a federal balanced budget amendment to be drafted, passed, and ratified by the states.

I am not certain that it would make a lot of difference, as the constitution is routinely circumvented, neglected, or flat out ignored today anyway.

Heck, our Senate under the "leadership" of Harry Reid has failed in one of its primary obligations to even pass a budget now into its third year. It is obvious that they don't take their obligations or the laws seriously, and why should they since we the people don't seem to hold them accountable?

Mr. Myste, as always, I am anxiously awaiting your thoughtful commentary, sir.

John Myste said...

I am utterly disgusted. I agree that our debt should be cut and so should our deficit. We should increase tax revenues, as every other president has done. The bill we are passing basically says the poor cover the deficit and the debt is ignored. We have to get those nutty Tea Party members out of Congress before this problem has a solution other than the poor people try to come up with enough funds to fund America.

I would compose a thorough rebuttal to this, but I have already shown the perspective up at Mad Mike's and at Fair and Unbalanced, and nothing cracks your Tea Party faith. You cannot challenge a religious man's faith.

The Heathen Republican said...

T.Paine, you should be ashamed to claim that your analysis is objective. If you were being objective, you would acknowledge Obama's good faith during this whole process, and see that the Republicans are simply economic terrorists.

John, I agree that this president should increase tax revenues "as every other president has done." Perhaps he could try doing it through economic growth...

John Myste said...


Should he open a car dealership or perhaps a fast food chain in his endeavor to increase revenues via economic growth? What business should Uncle Sam now undertake?

What would happen if America's highway infrastructure was repaired with a portion of the increased tax revenue? Is that your proposal? I would entertain the idea also. Great minds think alike.

Just the Facts said...

The talk of raising taxes and repair to the highway infrastructure is a lie. President Obama himself said recently that he realized there weren't as many shovel ready jobs as he thought when the first stimulant bill was passed. So why pour more money into the construction union trade coffers, to have that money be given back later to campaigns elect more liberal Democrats?
This is nothing more that money laundering under the guise of campaign contributions and for one am sick and tired of u=the claim that Americans infrastructure needs to be repaired by raising taxes every election cycle.