As the fury and venom flies over the debt ceiling, and now the GOP attempt to shove a Balanced Budget Constitutional Amendment thru as the price for their votes, it’s easy to see how the public is manipulated into mutual disdain and vicious ideological and class warfare by media and politicians. Dare I suggest that we – taxpayers of all political stripes and beliefs, no matter how far apart – are being played the fools big time? This should be abundantly clear by one simple and unavoidable fact… there is overwhelming bipartisan unity that if the debt ceiling is not raised, the US faces fiscal Armageddon.
If that’s the case, exactly what are the parties arguing? Because neither one is making a genuine case, or dent, for the reduction of spending, genuine entitlement reform, or increased revenue thru tax increase or a more capitalist/entrepreneurial friendly policy.
The fear mongering of Fed Chair, Bernanke, as well as Treasury Sec’y Geither and the WH are simply passing on the strong arm tactics of the nation’s largest financial institutions and their bankers.
“Any delay in making an interest or principal payment by Treasury even for a very short period of time would put the US Treasury and overall financial markets in uncharted territory and could trigger another catastrophic financial crisis,” said Matthew Zames, a JPMorgan executive, in a letter to Tim Geithner, the Treasury secretary, this week.
Mr Zames was writing as chairman of the Treasury Borrowing Advisory Committee, which includes some of the largest investors in US
You can read Zames’ letter to Geithner here, as reprinted in the NYTs last April.
Not banking on letters and media as the only devices to fight the good fight of a higher US credit limit, bank exec lobbyists and Wall Street executives have been meeting privately with the political elite for some time now, looking for assurances that no matter what the political posturing done, or whatever concessions are agreed upon, the debt ceiling will be raised for the negotiated price paid.
This lobbying, Whining… er… Wining and Dining includes a hefty amount of the 20 banks that could bring the US economy to it’s knees, in the event of a default.
Simply put, the omnipotent authorities of banks and investors are whispering threats of doom and gloom into the collective ears of the WH, Congress and the US Treasury that unless the nation’s credit card threshold is increased, interest rates will rise on T-notes, the fed’s credibility in the bond market will be shot and there would be a fire sale on US bonds, banks will fail, short term lending will disappear or become unaffordable, and the nation will spiral into a depression…
… that’s assuming there’s someone left that doesn’t think we’re not already spiraling around the toilet bowl flush to depression already.
And when the big banks whisper sweet nothings, the Congress listens.
The Economist put it in the simplest of stark language..
Indeed, the whole reason people are scared of hitting the debt ceiling is anxiety that bond markets will punish the government if it happens. That’s the hostage tea-party Republicans are holding: the credit rating of the US government.
Regardless of whether the payments of the existing revenue stream are wisely plied to the proper payments in the event of a default, a nation’s credit rating is not only dependent upon obtaining their credit via their debt ceiling, but also on that nation’s ability to repay that debt based on their spending trends. This seems to be a little ditty of data that the gung ho pro-increase types seem to ignore.
As even Moody’s recent warning about the US’s credit rating evaluations point out, raising the debt ceiling is one issue… under the assumption that nation *would* actually default. (not a given…). But they are also quick to note that “the rating outlook will depend on the outcome of negotiations on deficit reduction.”
Translation? Increasing the credit card limit doesn’t always make for a good credit rating, if you don’t demonstrate discipline in reining in your spending habits. At some point, a nation’s income to debt ratio looms large, ugly and fatal.
There’s one simple fact that comes out of this political farce, playing out before our eyes… the debt ceiling was going to be raised no matter what. So it was always just a matter of the price the GOP wanted to extract in order to be cooperative.
Or, as the joke quote from Winston Churchill was, paraphrased, “We’ve already determined what you are, Madam. We are now just negotiating the price.”
I doubt there are many left that believe politicians, of either party, are not beholding to Wall Street since Congressional members enjoy more prolific profits than laymen with their inside information, and immunity to prosecution for availing themselves of it. Altho I have to say that, in the instance of the Dem/lib/prog’s normal railing against the evil corporations as part of their ideological platform, it’s almost amusing to watch them at the forefront, furiously humping the water for those very rich entities they profess to disdain…
… and all in the name of the innocent taxpayer – the guaranteed losers in all possible outcomes.
If the financial institutions are in fragile shape, and “too big to fail” has gotten only larger after the various incarnations of TARP, are we to assume they will be left to their bankruptcy failures in the future, sans public taxpayer help? Or are there more bailouts in the future, along with continued near zero fed rates where financial institutions and their stockholders again pad their assets with zip for risk?
Who the heck do they think they are kidding? If the banks and bond investors hold true to their threats, dumping US bonds like Pimco did back in March of this year, do they pay the piper? If the banks find themselves in jeopardy, is it not the borrower of their loans that pays the price?
Reality is, only the US taxpayer, regardless of any political party membership, holds the only short stick in all this political shtick. Wall Street is on firm footing with their threats, whether – for the first time in history – their promises of the world’s investors fleeing the US currency and economy for other nations come to fruition or not. Congress and the political elite not only will acquiesce to their whispered instructions, they will benefit by having a political football to dominate a hot campaign season… each attempting to portray themselves as the MVP quarterback hero of the game.
Debt ceilings have been raised over 70 times since the 1970s, and almost 100 times since it was established. Sometimes there’s a public bruhaha about it, others not. Simply depends upon the next election cycle. Reality and simple math dictate that the past spending, and guarantee future spending… sans any significant form of reform of entitlements… mandate an ever increasing debt ceiling.
As a WaPo business article states:
Under the spending plan President Obama submitted to Congress in February, lawmakers would have to raise the limit by nearly $2.2 trillion just to see the nation through next year. Under the more austere blueprint that House Republicans approved last week, the government would require about $1.9 trillion in fresh debt by October 2012 — a month before the next presidential election.
In light of reality, the revolving door of piety and fiscal moral superiority any of these politicians attempt to don is wholly nauseating to behold. With few exceptions, all have been on both sides of the debate, depending upon the political climate. And yet all of them know that, since the debt ceiling is not accommodating for future spending but, instead, is paying for what they already *have* spent, the debt ceiling will have to go up.
But wait… there’s more. Apparently the GOP has also learned that Alinsky/Obama/lib/prog mantra, “never let a crisis go to waste” themselves. They’ve now bamboozled not only many lawmakers from both sides of the aisle, but a majority of the nation into believing that a Balanced Budget Amendment is the solution to keeping the Congressional sticky fingers out of the proverbial cookie jar.
H. J. Res 1 is being sponsored by Rep. Robert Goodlatte [R-VA6], along with 133 other House Republican co-sponsors. Rand Paul has already said the BBA is his price for a pro-debt ceiling vote.
Daddy and potential GOP nominee, Ron Paul, isn’t straying far from the same insanity…
“Nothing is more important than mobilizing a grassroots army to stop this sellout of conservative principles by the Washington establishment of both parties. And it is vital that Congress hears from the people, loud and clear, that they cannot support more of the same reckless spending and government overreach they were sent to Washington to end,” continued Paul.
“We may be just days away from a betrayal of the voters’ trust, and we could end up with no balanced budget amendment and no real spending cuts, and a deal that puts an even greater burden on the American taxpayers. But I refuse to stand by without fighting it.”
What sounds like a perfectly logical cure absolutely requires that fine print/fast talking disclosures of side effects you hear on legal drug pusher commercials on TV. Apparently most, desperate to tie a runaway and irresponsible Congress down, seem clueless to the pesky realities of national fiscal management, rigid brackets, and well-intended mandates.
First, let’s take the 8th grade simplicity view. I’m a family of four, and have lost all but one credit card, which only allows me to borrow no more than 18% of my anticipated earned income next year… likely based on my previous year’s performance.
There’s problem one… your next year’s performance may not match last year’s. And yet that’s what you based your next year’s budget on. How would that have worked out, say using federal revenue decreases, on the decline from 2008 to now? Or are we supposed to use the rosy accounting of the WH and CBO for GDP growth, which has proven their seer abilities are seriously lackluster?
Problem two? I’m likely making the same, less or not much more money, but the costs of utilities, groceries, fuel, car and homeowner insurance, state and local taxes, mandated health care coverage – all events out of my control – now increase what it takes to survive month to month.
What are my choices to deal with a limited credit card threshold, stable thereabouts income, and increased expenses? a) I either cut down on the groceries, the fuel needed, and dump some insurance policies; b) I demand a raise from my employer at the point of a gun, or c) take on additional jobs for additional income – hoping that the increased tax bracket doesn’t make it a wash. But how many years can I play that game when there is no end to the cost of living increases?
A BBA is no different. Aside from the disconcerting vagary of never knowing whether the Congressional spending I am mandated to pay for – without oversight – is wisely placed, efficient or even legit (consider earmarks, ridiculous grants, some foreign aid, etal), the spending is guaranteed to go up every year just by entitlement spending, legislated in the 1960s and 1930s, alone. Revenues and GDP, not so much. The Constitution (if changed) will now mandate either cuts (and not necessarily wise ones, and subject to the whims of who?)… or tax increases.
We have just legitimized all Congressional spending by mandating that, no matter what they spend – or on what, they may take from the taxpayer what they need because it’s a Constitutional mandate to “balance the budget”.
Really now.. who thunk this stuff up?
The proposed BBA wants to cap a budget to no more than 18% of (anticipated) economic output each fiscal year…
…. Unless, of course 2/3rds of each chamber votes to do otherwise.
Taxes won’t be raised…
… unless they have a 3/5ths vote to do so.
Debt ceiling can’t be raised….
….unless they have a 3/5ths vote to do so.
Right… Mind you, I certainly think there’s an inherent value to considering GDP growth and revenue anticipated when doing a budget… but a Constitutional mandate? Don’t think so. Most especially one that means nothing if they can simply vote to override it… which necessity would dictate happening far too often. Not to mention, what constitutes an “emergency” in the eyes of the elected ones?
And oh, BTW… what happens if they overestimate the economic output, upon which they base their budgetary spending? Any penalties for their errors? Not for the elected ones, of course. How convenient that when they accidentally overspend, a Constitutional mandate is handy to rob the taxpayer of more simply to “balance the budget”. Again they face the same choices… raise taxes, or cut something.
Based on historical behavior by all sessions of Congress since the New Deal, any bets on a future filled with responsible cuts?
Outside, of the years of process, and amount of States it would take to get such an amendment thru, Ed Morrissey has a few more simple explanations for those blinded by the rosy title of this proposal:
But let’s assume that all the stars align for a balanced budget amendment, one that the states approve and that actually forces Congress to put spending in sync with revenue. What then? Our current deficits come not from discretionary spending, but entitlements. Non-mandatory spending in fiscal year 2011 was $1.3 trillion, which means that Congress could have redlined every last dime of defense, homeland security, and other discretionary spending — and we would still have a $300 billion deficit. That problem becomes worse each year, too, as entitlements expand while running on autopilot.
Passing a balanced budget amendment would still require entitlement reform, unless we choose to raise taxes instead. That’s the trap. Congress wants to say yes to its constituents, and that means spending money. Once a constitutional requirement to balance the budget gets imposed on Congress, they will have to choose between raising taxes and cutting services every year, while voters want neither to happen. If we hear nothing but class-warfare demagoguery now on budget issues, just wait until Congress can no longer kick cans down the road. Every budget will end up with new surtaxes on the “wealthy,” which will drive investors overseas, which will eat into revenues, and which will prompt more surtaxes on the wealthy.
Here’s the reality. The US taxpayer, collectively, is being played, taken for a ride, and being strong armed by banks, Wall Street and investors who speak thru the WH administrative powers and our own elected Congressmen. The debt ceiling, after the political farce plays down and the government power is again altered for another session, will continue to be raised. If the GOP has their way, they’ll have used the crisis to use the Constitution to justify taxes for increased spending.
And if there’s any delay inbetween those bleak moments, the increased interest rates and yields change leave the taxpayers holding the bag for the cost. We’ll be more in debt then if the inevitable is done in a timely fashion. For what? Cuts that aren’t deep or effective enough? No… just to score political points. And both sides are vying for the surprise ending that leaves them the standing winner in the public’s eyes.
Both the financial institutions/investors, plus the political parties, have everything to gain, and little to lose. Because no matter what is decided on the inevitable debt ceiling… when, by how much and how often… it’s always the taxpayer that’s going to lose.
And it seems that neither party much cares.
Vietnam era Navy wife, indy/conservative, and an official California escapee now residing as a red speck in the sea of Oregon blue.
Best piece you’ve written in a long time. Keep up the good work.
Hey Ivan…
You’ve left crumbs on the carpet here and here.
Great overview of the issues, MataH.
Obama doesn’t think we stupeedos can follow such complex issues.
But today I was reading about how the Europeans feel about our American credit rating ”cartel:” Moodys, Standard & Poor’s and Fitch.
Not too favorable opinions on these raters’ ability to be impartial.
Now, if the French are calling Moodys, Standard & Poor’s and Fitch a ”cartel,” that wields their power to make political hay, and need to be ”smashed up,” how would we know if they do or don’t?
We know so much media is in Obama’s pocket, so why not?
@Aye:
Ha! I ask the questions here, not you.
That is almost exactly what I said to coworkers this week.
I do not like the idea of a BBA. Even specifically delineated Constitutional spending, such as for Defense, is never linear from year to year, adding only a COL adjustment to it. And that is essentially what a BBA bases itself on, coupled with an assumed increase in GDP from year to year.
The Democrats seem to want the debt ceiling upped in order to put off any further discussion about spending cuts to somewhere in the future, preferably after an assumed Obama win in 12′. A party of drunken college students living on their parent’s dime, and not caring where the money really comes from, nor how it affects their parents.
The Republicans seem to want the debt ceiling upped in order to avoid any serious confrontation about taxation or spending cuts that might give them bad press. A party of wimps.
Neither party seems to be all that concerned with actually being fiscally responsible.
And Obama seems to be concerned only about the avoidance of any real budget showdown, or any real decisions on it. He accuses the GOP of “kicking the can down the road”, when his very actions, and stated desires, would do that very thing.
Congress pushing for a Balanced Budget Amendment at this point, is like a philanderer putting on a condom to have relations with their pregnant “baby-mama” mistress, after the wife has discovered the affair, pregnancy, and her husband’s other children.
Where can we get large quantities of tar and feathers?
they will have to choose between raising taxes and cutting services every year, while voters want neither to happen.
The crux of the matter is the loss of character by the citizenry. A person of character doesn’t take hand outs because they insist their freedom of action is dependent upon self sufficiency. As soon as you receive a handout you lose your self sufficiency and then your freedom of action. A nation whose people have character require little in the way of social services and politicians would have no reason to beggar thy neighbor with taxes only sufficient to handle the most basic requirements of order and national security.
What we have here is a group of politicians who decided their power via continous re-election would be enhanced by making people dependent, thus they lured people with money for no work at the tax payers expense. The expense of dependency has grown so great that taxes have been levied upon every human activity to pay and expand that dependency. The greater the taxation, the less money available for investment for wealth creation. The result of taxation is to reduce economic activity which would have given self sufficiency to the individual.
The solution while harsh is obvious: Step 1 – Limit all terms of political service to ONE and only one term period, no moving from position to position to sidestep term limits. Step 2 – unwind all government programs except bare essential functions like the military. That means a buyout for everyone who paid into Social Security and Medicare and privatize it. End all other forms of government assistance, Medicaid, WIC, Welfare, etc. Step 3 – reduce taxation only to that what is necessary to fund Step 2.
The results: Economic growth explodes, a full employment economy and everyone is told you have the option of life insurance if you want to take care of your loved ones if you die, option of disability insurance taken from your paycheck incase you get sick and can’t work, option of health insurance versus private pay to cover medical expenses, etc. ALL PRIVATIZED.
@Ivan:
I figured you didn’t have the stonz to even attempt it and I was right.
Thus, your mental midgetry is on full display once again.
dscott, while I agree with much of what you say, I would impose a TWO term limit, just as there is on the POTUS. That way, no person could become a career politician. I am also a fan of a true flat tax, no deductions, not for home mortgage, not for children, et al, a flat percentage that by law cannot be increased.
But abolishing the welfare society, that has been in play since 1913, is going to be hard. There are people who have spent their whole lives living off the taxpayer. And when they start whining, remember, they have a vote. Now the DoJ is suing Louisiana because Eric Holder seems to think that the Louisiana state welfare workers are not making sure that welfare recipients are not registered to vote.
No one has the cajones to do the really simple task that would allow us to not raise the debt ceiling, meet our basic, and constitutional, financial requirements. It is a simple procedure; just take a red marker to the many useless and redundant alphabet agencies that have been created for special interests. Shut down the DoE, the EPA, the multi bureaus that deal with Indian affairs and keep only the BIA, and turn many of those responsibilities back to the states where they belong.
Then send a notice to everyone who receives any kind of welfare (public housing, TANF, food stamps, etc) that they will be required to pass a drug/alcohol test in order to continue their benefits until they can prove that they are physically unable to work. I really don’t care if they have 5 kids and no baby-daddy in sight, not my problem. Anyone who is physically handicapped, should be given jobs where they can perform with disabilities. In my own small town, the police dispatcher, who sits at a desk all day, is confined to a wheelchair.
We have become a nation where it is the responsibility of the productive taxpayer to support the life style, and decisions of the none productive. If it is your right to have three kids with no visable means of supporting those children, why is it now my responsibility to pay for them?
I have an alternative to the BBA that I believe would be better. It is the same idea Thomas Jefferson had many years ago and if passed it would eliminate the need for a BBA and put the FED out of business as well. I would like to see this as the 28th Amendment.
The power granted to Congress “to borrow Money on the credit of the United States” in Article 1 Section 8 Clause 2 of the Constitution is hereby repealed.
How is that for a simple fix?
Well done Mata, enjoyed the read.
The fearmongering we are witnessing is the same as that used by Paulson / Bernanke when Wall Street leaders needed to bail out the too big to fail. All that money, if at all distributed, should have gone to regional banks. This would have pushed (with conditions) the capital way down the food chain and onto the street closer to small/medium businesses.
The current strain of fearmongering is insidious politics dished out by a President sent to the podium by bankers who thrive on panic through which they can further manipulate Washington and main street.
For 30 years every corner of society has been convinced that “debt” was a personal Right. Through debt, the good life would materialize in all its splendour. Everyone borrowed, and much of that borrowed cash, particularly in the last 20 years, went to China.
Society perceived all that borrowing positively, and that perception swept through ALL political hallways, national, state and municipal.
Panic is being used to deflect attention from the fact that the debt being created is a crime against future generations, and that it is not positive.
The government is NOT a company financing its cash flow to create profits and maintain jobs.
There is no excuse for the massive National debt whose growth we have apathetically witnessed silently as it ballooned out of control.
The U.S. debt is in U.S. Dollars. No other country has that kind of power, and that power is backed by (by far) the biggest economy in the world, which is in turn backed by the biggest guns. It is still the only safe harbour for the world’s cash to rest. The U.S. is not about to go to hell in handbasket. It does, however, need to reign in the corrupted waste, and all of its spending, and privatize most of the functions which have been taken on Federally and at State level over the years.
The current fearmongering, IMHO, is politics at its worst.
All of that depends upon whether our consumer economy is surpassed by another, that the dollar remains the Reserve Currency, and our military is not actually gutted to the proposed model this admin is suggesting, doesn’t it?
Sorry… no pass given to the GOP Congressional members on this either. As I point out, there is complete political harmony in the belief that not raising the debt ceiling results in fiscal Armaggedon. The bank execs are whispering in all ears… the Zero’s, his economic heads, and both GOP and Dem Congress members.
We are being played by all… bank execs/investors, this WH and all of Congress – regardless of party. The US taxpayer is the loser in all scenarios.
@MataHarley: #12,
“Sorry… no pass given to the GOP Congressional members on this either.”
Agreed, . . . didn’t mean to imply otherwise, although the bully pulpit is currently in the hands of Democrats of the far left kind. Plus, Wall Street seems to have this pulpit firmly in hand. The key is – how ignorant and uninformed is the occupant of the Oval Office on all things economic – that dictates the joyousness of the cartwheels on Wall Street. That degree of illiteracy is proportional to the Street’s ability to manipulate. It thrives on a dearth of strong and firm leadership from the White House.
I remember very clearly Cheney’s possessive attitude toward debt when he was VP, and his influence on Bush. There are few in Congress who have voiced any serious concerns on spending over the years, and fewer still who did anything about it. Each has been focussed on re-election, again, and again. Term limits would change attitudes dramatically. It’s almost as if we have prevent people from doing what seems to come too naturally.
Seems Mata just wants to continue with the Congress’s unfettered ability to drive us deeper into debt. Not that I am surprised by her stance. And she claims there is complete agreement that not raising the debt ceiling will result in default. She is wrong. Many have pointed out, Rand Paul being one of them, that this is not the case.
We currently reap enough revenue to meet out debt obligations. There is no reason to scare Granny with such hyperbole such as the suspections of Social Security payments.
The banks should be more concerned with the Dodd-Frank bill that is set to take affect.
Perhaps the all knowing Mr. retire05, who seems to think he can read my mind about approval of a debt ceiling increase, will explain to readers – those who care a flying flip what he thinks, anyway – why Rand Paul is quite happy to vote for a debt ceiling increase in exchange for a BBA?
Seems Mr. Paul, like the proverbial madam of the Churchill joke, is simply negotiating his price for services.
@Aye:
Wow, talk about hi-jacking a thread with personal attacks!
Just admit you didn’t know about the FBI testimony and I’ll let it go.
PS I don’t think Curt appreciates your hi-jacking of Mata’s thread with your personal attacks.
@MataHarley:
The BBA is a canard. California has a BBA and it is routinely violated and ignored each and every year.
Given how corrupt and above the law Congress is, why would you or anyone else expect anything less than a toothless BBA????
Ivan, I support no BBA, toothless or a full set of choppers. States not only enjoy their 10th Amendment rights to do as they see fit for their boundaries, but they also do not have the ability to print currency and are supposed to remain within their revenue income for spending. I don’t care what a state does for these reasons.
However, as documention I’ve provided to another pro-BBA type on another thread, one can look at just the number # indebted state, per the Daily Beast rankings based on state economic records last year – Rhode Island – and see that they have both a Constitutional BBA mandate for both their legislature and for their governor (to submit a balanced budget), and it’s done nothing. As a matter of fact, 7 of the top 10 most indebted states have varying degrees of BBA in their state’s statutes.
Therefore, while I acknowledge the states have a perfect right to do so, and probably have more need since they are constrained by the inability to print money, BBAs show no indication of making an iota of difference for fiscal responsibility. That really just comes down to the elected ones in their state legislatures. Prudence cannot be mandated, as their fiscal status proves. Idaho, ranked 37th in the debt list – who has neither a Constitutional mandate or statute for their governor or legislature – proves a BBA is not necessary for fiscal prudence.
@Ivan:
Why would I create a falsehood? Just because you want me to? Don’t hold your breath on that one bozo.
The questions remain… Where is the source citation supporting your claim regarding the FBI? How about the statistical data that proves illegal immigration caused the mortgage crisis?
Both still missing, eh?
Well, I really doubt that Curt has a problem with me calling you out on your dishonesty here considering that you’ve been proven too weak and weaselly to own up to your words on the original thread.
If he does have a problem, however, he will most certainly let me know.
Can you prove I was being dishonest? Go ahead and prove I lied.
I’m all ears.
@MataHarley:
Retire should listen to you. You’re on fire, Mata!
@Ivan:
The more important question is, can you prove you were being honest?
If the FBI said what you claim that they said then cite the source.
If illegal immigrants were the cause of the mortgage crisis then cite the source.
If you cannot, or will not, cite your sources when directly challenged to do so multiple times, then the logical conclusion is that you’re being dishonest.
So, where are those elusive source citations?
@Aye:
Sorry! You said I was being dishonest. You’ve made the allegation that I DELIBERATELY told a lie.
Prove it, or apologize.
PS Knowing that you are not a man of honor, I won’t hold my breath on you apologizing. You’re already starting with the “fancy feet dance” where you are trying to backtrack on your allegation.
PPS I’m sure Curt and Mata are enjoying your continued hijacking of this thread. Shame on you.
@Aye:
So wrong it makes me wonder if you took a logic course in college. What was your degree in? Underwater basket weaving?
@Ivan:
@Ivan:
Hmmm….Looked through both of your responses there and still no source citations.
Backtracking? Really?
Let me eliminate any confusion you may have:
1) You lied about what the FBI supposedly said.
2) You lied about illegal immigration being the cause of the mortgage crisis.
You were just hoping against hope that no one would call you out on it. How’s that workin’ out for ya?
You want an apology from me?
No problem…I’ll do that as soon as you cite the sources to prove your claims and are therefore able to prove me incorrect about my conclusions.
PS… Getting ready to head out of town. Be back late Sunday so you’ve got plenty of time to come up with the answers to the questions. I wouldn’t want your delusions of grandeur to lead you to falsely conclude that I abandoned our little discussion.
Congress (both parties) play us for fools? Say it “ain’t so.”
You comment, “Simply put, the omnipotent authorities of banks and investors are whispering threats of doom and gloom into the collective ears of the WH, Congress and the US Treasury that unless the nation’s credit card threshold is increased, interest rates will rise on T-notes, the fed’s credibility in the bond market will be shot and there would be a fire sale on US bonds, banks will fail, short term lending will disappear or become unaffordable, and the nation will spiral into a depression…” You continue, “Reality is, only the US taxpayer, regardless of any political party membership, holds the only short stick in all this political shtick.” Sounds to me as if Wall Street and banks are trying to protect themselves.
Great (and sadly true) close: “Both the financial institutions/investors, plus the political parties, have everything to gain, and little to lose. Because no matter what is decided on the inevitable debt ceiling… when, by how much and how often… it’s always the taxpayer that’s going to lose. And it seems that neither party much cares.”
Very good and well researched post!
Latest update? McConnell has submitted “Plan B”“raise the debt limit by $2.5 trillion in three requests.”
Yup… we be being “played” big time. Death by slashing the wrists? Or death by a thousand cuts.
Either one is death.
@MataHarley:
Obama has claimed he would only agree to one big debt ceiling hike rather than several smaller ones that put him closer to the election with his hand in the cookie jar.
I wonder if he was just pretending and is perfectly willing to sign on for this ”Plan B.”
Someone pointed out on the radio that Obama only intended to cut $2 billion from this year’s budget anyway.
We borrow $2 billion ever ten hours nowadays.
Gee, ain’t Obama something?
BTW, do we even HAVE a budget for this year?
@Aye:
\
Again, the lack of documentation does not imply a deliberate falsehood.
You have stated catagorically that I have lied. Can you PROVE I KNOWINGLY stated a falsehood?
I dare you.
You can’t. Thus, since you lack any sense of honor and refuse to retract said accusation, you are beneath contempt.
You know, Aye, there is always option B. which would require you to perform seppuku to redeem your family name.
I won’t hold my breath as you routinely act without honor (a typical liberal I might add).
;->
@MataHarley:
You’re on target, Mata. Fire for effect!!!!!!!!!!!!!!
@MataHarley: Great synopsis of the whole friking darn mess Mata. At times we joke as to if our fearless leaders all go to the bar together in the evening after making their visits to their respective talking head shows, and then roll on the floor with laughter and glee while exclaiming, “God! Our minions are so easy!” And then oriley adds to the gloom and doom with his own predictions which only increases more fear in the elderly, and those who care for them. Man has his ego been over inflated or what with the Whitehouse dropping his name now at press conferences? You need to send your article to both the democrats, and the republicans.
Ya know, Gary G, I’ve envisioned same about the good ol’ boy/gal Congressional coven myself. They all go out by day, play their respective nemesis parts before the cameras, then bond together over cocktails later and laugh at the “us v schmucks” mentalty. They would think we are all the easy push overs… save for the new media and loud outcry against them and the usual MSM BS. I do think, tho, they are somewhat staggering in disbelief at their lack of public propaganda control… and they are getting more than a tad nervous. And after this coming election, they should be even more so.
As far as sending this to both Dems or Republics? I think you can tell that not even a lot of so called conservatives want to read this… or hear the message that those on which they pin their hopes are only a nano-step above the lib/prog/Dems on the corruption scale. There’s not much interest in holding the newly elected “in’s” tootsies’ to the fire. At this point, they still prefer to read the latest “Obama’s did this, Obama did that…” headline.
It’s amazing that despite the crystal clear message the voters sent, that idiots like McConnell still want to roll over and play dead all so they can get re-elected. THIS is why we are trying to get more Conservative politicians in office. They have the balls to do what is needed, even if it isn’t popular and may cost them their office.
We literally have a political ruling class faaaar detached from reality and this is a prime example.
The very survival of America is at stake and our “GOP leaders” don’t seem to get it. They are jockying for position on the deck of the Titanic.
Fantastic article, Mata. But you could have saved yourself a lot of work had you stopped and only used this phrase:
That sums it up nicely when it comes to how the American electorate views Obama.
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My heartache with a BBA is that it provides a ready “we had to do it” excuse for politicians who want to take the easy way out (tax hikes) versus making cuts in unnecessary government spending. The current crop of GOP “conservatives” is largely a group of cowards and connivers. They and the breast-beating Dems are wholly owned by Wall Street.
So Matthew Zames is telling Geithner to basically raise the debt ceiling or we will face financial armageddon. Color me NOT surprised. And color me sceptical about Zames’ motives. This would be the same Zames that oversees J.P. Morgan Chase that dumped a tony $695,132.00 into Obama’s campaign coffers. This would be the same Zames that warned to other J.P. Morgan Chase execs that Bernie Madoff’s company was nothing more than a Ponzi scheme two years before the Madoff fall, yet continued to pour his client’s investment money into the Madoff Madness. This is the same man with a record of donating exclusively to Democrats, including the Friend Of Mazillo, Christopher Dodd. Nah, no pandering on the part of Matthew Zames, none at all.
But what happens if we don’t increase the debt limit? I would warrant the same thing that has happened on every other occassion that the debt limit was not increased. No financial armageddon, no failure to meet our debt payments, no senior starving to death because they didn’t get their Social Security checks.
http://biggovernment.com/jlott/2011/07/15/seven-myths-about-the-looming-debt-ceiling-disaster
@Nan G, contrary to what some may take away from this post, I am not in favor of raising the debt ceiling. But then it doesn’t matter what I think… or even if it’s possible to find enough mutually agreed upon cuts that will sustain being able to pay out all necessary expenditures, plus interest only on the debt, for any substantial length of time.
There is no doubt that any kind of interest rates increase on our debt is an added burden on the US taxpayer. And it’s also entirely possible that without meaningful reform of the actual culprits – entitlements – that there could be an uncomfortable exodus to other safer harbors. I would say… where would they go? But China, Russia and Germany still offer alternatives to the US. I might even argue that Brazil is looking mighty good for the next decade or so, with their large oil reserve finds and planned production. It’s not like we are the only game in town anymore.
Fact is, the only way the debt ceiling, or the debt itself, can be tackled is by both SS and Medicare/Medicare reform (not o”healthcare….) pronto. That was the only “hostage” worthy of leverage here, and the GOP freed that hostage in early May because of campaign paranoia. Our runaway debt is primarily from decades old legislative ponzi schemes, concocted back in the 1930s and 60s. Not that the increased spending for bogus stimulus and the attempted takeover of all things healthcare related is much of a help.
Nor was the financial institutions bailout (plus the illegal GM/Chrysler use of those TARP funds by this admin) such a hot idea either. Without a peek at a parallel universe, I don’t know what would have happened had we allowed the large banks and AIG to fail, but I sure know that the same entities have benefited by both ends of the stick… getting the taxpayer loans, plus getting continued low interest money that allows them to trade with virtually no risk.
All this political posturing by both parties really gets on my nerves because I’m not willing to redirect my attention from the man behind the curtain (entitlements) over to meaningless and inadequate proposed cuts, or arguments over tax revenue. Neither cuts, nor the pittance of revenue by “taxing the wealthy”, are going to keep up with the ponzi scheme that’s a guaranteed a run over the fiscal cliff.
So in the long run, it really comes down to a failure on all parties and leadership today… and actually over events and programs created by Congresses in the last century. Every one of them are saying “watch my right hand” whilst fiddling with the left because they’re all too afraid to do what needs doin’ for fear of losing their cushy jobs. But it sure makes for great political farce during a hot campaign season.
The more I think of it, the more I’d like our Congress to have part time sessions. This means they are part time civil servants, and return home for a good portion of the year to actually engage in private enterprise and contribute to the system instead of being a drain on it. Not to mention every day Congress is not in session is one more day another liberty is safe.
@Nan G:
No, we don’t have a budget for this year. Hell, we don’t have a budget for last year. Over 800 days without a federal (required by law) budget.
And yes, Obama was braggin how he could cut $2 billion from the federal outlay leviathan of $3.6 trillion. Obviously he is not looking too hard.
Friday the House Energy and Commerce Committee delivered a subpoena to the Office of Management and Budget ordering the disclosure of documents related to the $535 million loan guarantee to Solyndra, Inc. This firm has been close to the heart of such Democratic players as Energy Secretary, Stephen Chu, and major donors to the Democrat Party. Those donor being themselves the recipients of an $11 billion DoE slush fund use to dole cash out to “clean technologies.” Obama touted the success of Solyndra in a May, 2010 visit.
But there are a few problems; the Security and Exchange Commission showed Solyndra’s books to be violently in reh red. The company lost $518,694,000.00 between 2007 and 2010, something the administration clearly knew when it earmarked money for it. The OMB is stonewalling, refusing to disclose documents showing why the government approved loans to this particular company.
Not discounting the $5 billion loan guarantee to Brazil to drill in gulf waters, we gave $718,000.00 to the Chinese government for “air quality” control, not to mention that we now have a process by where we borrow money from China, give it to the U.N. for AIDs relief and the U.N. then gives our taxpayer dollars back to China. We take care of China’s AIDs patients, and in return, we pay interest on the money we borrowed from them to help their own people. Hellofa deal for China.
But hey, if we don’t raise the debt ceiling, according to those at J.P. Morgan Chase, the financial world is going to end. Nevermind that the rumors of Timothy Geithner leaving are pretty solid, and who is in the first tier to replace him? Why golly gee, none other than Jamie Dimon, CEO of J.P. Morgan Chase.