“Left and right, the cable commentariat is currently engaged in a cut-and-thrust over the use of strong words in politics. In particular, does ‘terrorism’ describe the initial reluctance of some tea partiers to support the US government’s set-in stone spending?
Lost in this silly squabble is the following: ‘the second coming of the Republican revolution,’ as Politico.com dubbed the tea party contingent on Capitol Hill, failed to defuse the threat of the debt. Only 28 tea-party freshmen voted against the ballyhooed “Budget Control Act Amendment.”
Listen to the words of one wily politician whose country’s central bank holds almost 40 percent of dollars as reserve currency. Vladimir Putin’s response to the debt compromise was pitch-perfect, given the stakes stateside and beyond. This via RT and Press TV, respectively:
‘The current deal struck by US lawmakers will not solve the underlying issues. This colossal debt, $14 trillion or more, means that the country has been living on credit, which is really bad for one of the world’s leading economies. They live beyond their means, and put a part of their burden on the entire world’s economy. … The country is … shifting the weight of responsibility on other countries and in a way acting as a parasite.’
Having impressed themselves no end, the lawmakers who came up with the “Budget Control Act Amendment” don’t impress Putin much.
So what was the deceptive deal that was endorsed by 59 of the already stale tea-party freshmen, and got enthusiastic whoops from many among mainstream media’s menagerie of morons? …”
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Look closely and this so-called ‘deal’ on the debt ceiling crisis is a triumph of sleight-of-hand over substance.
Sunday night it was, ‘We will cut a trillion dollars in the first 10 years.’ By this morning a trillion had become $917 billion, which means we lost $83 billion in cuts overnight. Makes you afraid to go to bed.
In the first three years of the Obama presidency, the deficits will total about $4.2 trillion. Cutting $917 billion over 10 years, or $91 billion a year, is chump change.
Then there’s the commission, another one. Remember the commission President Obama ordered to come up with answers to this stuff last year?
They did. Their report was full of a lot of good ideas. It was ignored by the president and Congress. But they want us to believe this commission will be different.
Baloney. There has been no attempt to address tax reform or entitlement reform. That will be left for ‘The Commission.’ My guess is they won’t touch it anymore than the current crop of folks tackled it. And without those two things, we are doomed.
Supposedly there will be triggers in the legislation that will require additional cuts totaling $1.4 trillion across the board if the committee and Congress cannot agree. Color me skeptical.
We are facing more than $61 trillion of unfunded liabilities from Medicare, Medicaid, Social Security and other obligations – $61 trillion.
There is no money to meet those obligations and our government knows it. But they have the unmitigated gall to march out Sunday night as though they had found a cure for cancer and expect us to break down in uncontrolled adulation. They make me ill.”
[SNIP]
Russia’s Prime Minister Vladimir Putin, via RT: “This colossal debt, 14 trillion or more, means that the country has been living on credit, which is really bad for one of the world’s leading economies. They live beyond their means, and put a part of their burden on the entire world’s economy.”
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.
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.
From John King, USA (CNN statist) to Shepard Smith (FoxNews statist), to Fareed Sakaria (all-round Zombie), to Larry Kudlow: all are agreed that the chief danger to the US economy comes from the debt debate, and not the actual debt.
Causality has been turned on its head in all but one of the Newsspeak-dominated TV programs. Thus it is alleged that the downgrade of America’s credit rating is what will cause the country’s economic downfall, when it is the reverse. First came an economic collapse. Assorted indices are catching up.
Ask yourself this: If the US Treasury was flush with cash—and on a sound footing—would a downgrade of its credit outlook by Standard & Poor’s or Moody’s cause the country to go off the economic cliff? Economic reality dictates an economic demotion—a flight from US Treasuries and the dollar and a concomitant rise in interest rates, because, what do you know? The US is broke.
In this preordained, dead-end debate, default is another fudge factor:
“Federal tax revenues vary by month, but should total around $2 trillion to $2.5 trillion for FY 2011– an average of perhaps $180 billion per month. So clearly the federal government has sufficient tax revenue to make interest payments to our creditors. For now, those interest payments represent about 12 percent of the total federal budget.”
UPDATED I: BASTARDS LOWER THE BAR. The dead-end debt debate reaches a new low. The newsspeak in circulation (and native gullibility, and I’m being charitable) has ensured that Americans now believe that the political stand-off, and not the spiraling spending, is what will seal the country’s economic fate.
The next step?
The players—the people who fund this orgy are at work—arrive at a Grand Compromise to loud fanfare, their own. This “compromise” is truly Orwellian: you make a huge deal about cutting spending just a wee bit more than the rise in the debt ceiling which you’ve okayed.
How far astray from the original goal of slashing the debt have the politicians led a willing people? Well, at least everyone now knows what the S & P is.
Read about the upcoming symbolic vote on Boehner’s plan.
UPDATE II: “DEFAULT BY INFLATION.” As I said above, the natural laws of economics do not obey the (positive) laws politicians make, whatever these creatures ask you to believe. Warns Ron Paul:
“Default is coming. The only argument that’s going on now is how to default, not send the checks out or just print the money. In all countries our size, they always print the money,” Paul said.
“They’re going to raise the debt limit, and then they’re going to print the money, and then they’ll default by inflation, and that’s much more dangerous than facing up to the facts of what’s happening today.”
