Sunday, July 31, 2011
Debt, Deficit, and the Un-Seriouness of Washington in the Debt Ceiling Debate
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.