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.

A New Record in Deficit Spending

It would seem that the federal government has achieved another history-breaking record.  For February 2011 the federal government posted the largest monthly deficit in the entire history of the United States.  Indeed, this $223 Billion deficit for the month of February alone dwarfs the $161 Billion deficit that the government posted for the ENTIRE YEAR in 2007.  In other words, Barack Obama's government is running up larger deficits in one MONTH than the government posted in an entire YEAR only a few short years ago.

Meanwhile, Democrats in congress are screaming about the Republican's still-anemic attempts to cut the deficit for this current year's budget.  According to the Washington times, "a top Senate Democrat said his party can accept no more than $6 billion in domestic cuts."  We just posted $223 Billion in deficit spending last month alone, and the Democrats claim that the most they can cut in spending for the remainder of the fiscal year is $6 Billion dollars!  They truly are clueless as to the peril our economy and indeed our nation is in with this unsustainable spending.

March 18th will be the next vote over the continuing resolution to try and fund the government for the remainder of the year.  Currently the Democrats are threatening to reject the House GOP plan to cut $57 billion in spending for the rest of this fiscal year. They say those cuts are too much.  Instead of being serious about the need to cut all but the most vital CONSTITUTIONALLY authorized governmental functions, President Obama put forth a budget that was full of additional spending that we simply do not have the money for right now.  As he stated in his State of the Union Speech, he wants to spend our taxpayer dollars to fund such extra unnecessary items like high speed rail despite the fact that a vast majority of Americans don't want it and won't use it.

Further, if union agitators succeed in bullying governors like Scott Walker and John Kasich and do manage to impose their statist agenda at any price so that tax payers will continue to have to fund public union pensions and health care to degrees that exceed those of even private employers, then we are bound to collapse under the weight of our own fiscal malfeasance very soon. Things are quickly coming to a head.  The Republicans in congress absolutely must hold the line and insist that their cuts be implemented. 

Those cuts alone are pathetically impotent when it comes to the monthly deficits we are now seeing and indeed they need to be even bolder in the GOP's plans to balance our budget. Unfortunately, when you have Democrats that seemingly don't even acknowledge that we are in a dire situation and refuse to even exceed $6 Billion in cuts for the remainder of this year, it will make the battle an exceptionally difficult one.  Take note which Democrats (or Republicans for that matter) are not taking this seriously, send them an email or call, and make damned sure to vote them out of office come November 2012, assuming we still have a functioning government and nation by then.

GOP's Eric Cantor YouCut Deficit Reduction Plan

Minority Whip Eric Cantor has headed up this program for citizens to vote on which programs, expenditures, etc that they would like to see cut from the federal budget.  This is a promising first step and I strongly encourage everyone to go on line at the link below to vote for which programs they would like to see cut.  This only is a drop in the bucket overall, but hopefully with the support of We The People, this will transform into a return to Constitutionally-approved spending of our tax payer money!

"YouCut – a first-of-its-kind project - is designed to defeat the permissive culture of runaway spending in Congress. It allows you to vote, both online and on your cell phone, on spending cuts that you want to see the House enact. For the next several weeks, Congress stands in recess, but YouCut will continue - when Congress is back in session, we will bring your cuts to the floor for a vote. Vote on this page today for your priorities and together we can begin to change Washington's culture of spending into a culture of savings."
Save this site and vote EVERY week.

http://republicanwhip.house.gov/YouCut/

The Destruction of the American Nation By Defict Spending

“This is going to require people of both parties to come together and take a look at the growing gap between what the government spends and what the government raises in revenue.” – Barack Obama, April 27, 2010, at the first meeting of his Deficit Commission.

Gap indeed! Under the stewardship of President Obama, this deficit “gap” has expanded to Grand Canyon proportions, and is ever widening still for the long foreseeable future. In May, the International Monetary Fund released a 91-page report that compared the debt levels of countries around the world. Several countries are in very difficult situations accordingly such as Japan and Greece; however, the United States is shown to be in a catastrophic financial nose dive. It shows that America is increasing its debt at a steeper rate than almost any other nation in the world.

The Heritage Foundation released figures showing that in 2010 the United States government is spending $30,543 per household while only taking in $17,879 per household in revenue. This leaves a current budget deficit of $12,664 per household. Further, the Heritage Foundation states that 56% of federal spending currently goes towards entitlements such as Social Security and Medicaid. This accounts for 14% of our gross domestic product. Clearly this egregiously out of balance and out of control spending must be reigned in and reversed immediately if we plan to survive economically as a country.

When President Bush left office at the end of 2008, the national debt was 69.2% of GDP. Now, only a year and a half into President Obama’s only term, the national debt stands at an astounding 92.6% of GDP and is growing exponentially. If this trend is allowed to continue with this asinine spending we will exceed a national debt in excess of 100% of GDP by 2012. This is NOT sustainable for our nation. As things currently stand, 42 cents out of every dollar America spends is borrowed from the Chinese and other foreign investors. As we reach that magical tipping point of having our debt greater than our GDP, we are in serious and inevitable jeopardy of our country losing its Triple A bond rating.

This is exceptionally bad as the interest rates we will pay on our debt will increase significantly at that point. Further, foreign nations will be very unlikely to continue to finance our debt. To make matters even worse, most of America’s debt is financed with a very short maturation time compared to nearly all other nations. While the IMF reports that the average maturity rate for the United Kingdom’s debt is 12.8 years, and the insolvent Greek debt’s average maturity rate is 7.4 years, the United States has its debt financed with maturity rates averaging a mere 4.4 years. At the end of that 4.4 years, that debt will have to be re-financed, and with the likely loss of our Triple A bond rating, the interest rates for re-financing that debt will likely be crushing.

The progressives claim that the failed Keynesian policies of priming the pump and spending our way out of debt is what will save our economy, despite all economic and historical data to the contrary.
Their economic ineptitude is what is hurtling us towards the abyss. We must absolutely establish draconian cuts in spending right now if we are to remain solvent and not have our economy collapse where the dollar becomes as useless as the Soviet Union ruble. Trying to spend our way out of a recession makes as much sense as a drunkard trying to drink himself to the point of sobriety.

Our pathetic Democratically controlled House of Representatives has failed to pass a budget for the first time since 1974. This was done intentionally as they are seemingly genetically unable to cut spending and thus know that the passing of their budget will be the final nail in their political coffin come this November’s elections. Most Americans get the fact that we cannot continue down this path of profligate spending and survive much longer. Congress, especially the Democrats, and our president had better come to this realization right now, or we may not have a nation left by the time the next presidential elections roll around in 2012… when our debt will exceed 100% of our GDP.

Republicans vs. Democrats; The Lesser of Two Evils

The Heritage Foundation took data from the Congressional Budget Office (CBO) and from the White House and found that while spending was out of control during George W. Bush's administration, the problem has been exacerbated astronomically under President Obama, even by his own more favorable numbers. It is estimated that thanks to the nonsensical spending that began under the Republicans in their attempt to morph into Democrats, and now the spending by the actual Democrats that unless hugely drastic changes are made, we will have 82% of our GDP going just to service our debt by 2019.

Let me assure you that we will go the way of the Soviet Union if this is not changed RIGHT NOW! This is definitely not "change I can believe in" but rather "chains I can believe in". For that matter, I am scared if someone tells Obama what comes after "trillions".