Wow: Republican wizards have passed a bill in the lower chamber that will both raise the debt ceiling and slash spending! The marvels of modern semantics. Meantime, BHO is tweeting like a twit possessed, urging Americans to work their representatives over so that a deal can be struck, and a disaster averted. The disaster: a rise in the interest rates on all the stuff they have borrowed. BHO’s re-election hinges on happy spenders. (Even if it’s splashing out at the One Dollar Store.)
It’s remarkable what politicians putting pen to paper can achieve, isn’t it?
The marvels of an alternate reality notwithstanding, interest rates are long overdue for a correction. Political will is what’s keeping interest rates low or at zero, the premise being that buying and consuming is what generate economic growth. Keynesian crap, if you’d pardon my language. If interest rates rise, savers will be better rewarded. Capital for future investment can be accrued.
In his wonderfully learned book, The Failure of the ‘New Economics, Henry Hazlitt summed-up the essence of Keynes’ General Theory: “The great virtue is Consumption, extravagance, improvidence. The great vice is Saving, thrift, ‘financial prudence.'” Duly, Obama has vowed to make credit flow “the way it should.” Never mind that “all credit is debt,” and that, in Hazlitt’s words, “proposals for an increased volume of credit are merely another name for proposals for an increased burden of debt.”
Nearly two hours after the House narrowly approved House Speaker John Boehner’s debt-ceiling bill, the Senate voted 59-41 to reject the speaker’s plan, leaving Congress no closer to reaching agreement before the August 2 default deadline.
The vote did not kill the Boehner bill itself, allowing it to be used as a vehicle for a later compromise.
But Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., appeared at an impasse late Friday on negotiations on a Senate bill to raise the debt ceiling. As a result, Reid introduced new language to tighten his original proposal in the hopes of gaining more Republican support on a cloture vote on his legislation expected early Sunday.
According to a memo from his office, Reid’s latest proposal would increase the deficit reduction over 10 years from $2.2 to $2.4 trillion, with a “dollar to dollar” increase in debt ceiling based on a proposal originally authored by McConnell to fast-track resolutions of disapproval to allow the president to raise the debt ceiling with the political liability falling on Democrats.
In his defense, Harry gets his meager savings by “winding down the wars in Iraq and Afghanistan which Republicans decry as budget gimmicks.”
I hope that every one of the already stale Tea-Party freshmen who refused to quit the wars to save some money is tossed out of office.
You know guys, it’s “Hard out there for an Ex-Pimp.”
UPDATE (July 30): REEDS ALL. More mindless, insignificant tit-for-tat, via The New York Times:
The Republican-controlled House on Saturday dismissed a new proposal by Senate Democrats to end the fiscal crisis before the Senate even voted on it, deepening the ongoing federal budget stalemate.
In an effort to send a message to Senate leaders of both parties, the House voted 173 to 246 against the proposal by Senator Harry Reid, the majority leader, to show it had no future in the House.
During a heated debate, Republicans and Democrats traded accusations over who would be responsible for a government default if no compromise was reached by next Tuesday, with Republicans defending the plan they sent to the Senate on Friday only to see it rejected almost immediately.
On Twitter, Speaker John A. Boehner called the Senate measure “DOA” and a “non-starter in the House.” Republicans also said the $2.5 trillion in savings in the measure were illusory
Here’s a budget I can begin to get behind. Over to the marvelous John Stossel:
The biggest budget busters are Medicare and Medicaid, and get this: the 400 subsidy programs run by HHS. Assuming I take just two-thirds of the Cato Institute’s suggested cuts, that saves $281 billion.
(See Cato’s cuts at www.downsizinggovernment.org.)
How about the Defense Department’s $721 billion? Much of that money could be saved if the administration just shrank the military’s (SET ITAL) mission (END ITAL) to its most important role: protecting us and our borders from those who wish us harm. Today, we have more than 50,000 soldiers in Germany, 30,000 in Japan and 9,000 in Britain. Those countries should pay for their own defense. Cato’s military cuts add up to $150 billion.
I’ve now cut enough to put us $2 billion in surplus!
Can we go further? My TV show’s guests thought so.
“Repeal ObamaCare,” syndicated columnist Deroy Murdock said.
Reason magazine editor Matt Welch wants to cut the Department of Homeland Security, “something that we did without 10 years ago.”
But don’t we need Homeland Security to keep us safe?
“We already have law enforcement in this country that pays attention to these things. This is a heavily bureaucratized organization.
“Cut the Commerce Department,” Mary O’Grady of The Wall Street Journal said. “If you take out the census work that it does, you would save $8 billion. And the rest of what it does is really just collect money for the president from business.”
As the bureaucrats complain about proposals to make tiny cuts, it’s good to remember that disciplined government could make cuts that get us to a surplus in one year. But even a timid Congress could make swift progress if it wanted to. If it just froze spending at today’s levels, it would almost balance the budget by 2017. If spending were limited to 1 percent growth each year, the budget would balanced in 2019. And if the crowd in Washington would limit spending growth to about 2 percent a year, the red ink would almost disappear in 10 years.
As you see, the budget can be cut. Only politics stand in the way.