Sunday, July 17, 2011

The Debt, The Debt Ceiling, and Leveler Heads... Will they Prevail?

by: Les Carpenter
Rational Nation USA
Birthplace of Independent Conservatism
Liberty -vs- Tyranny


Fiscal conservatism is about a lot more than just cutting spending, reducing taxes, and passing a balanced budget amendment. Which, by all indications is where republicans in Congress presently find themselves.

Fiscal conservatism is about maintaining control of spending while providing the revenue to fund the necessary functions of government. It is about acting responsibly so the government's fiscal house stays in order and solvent. Not unlike a well run business.

The federal government has certain critical obligations that must be funded. Obligations such as national defense, maintaining a federal judiciary, insuring the strength of our national infra structure, maintaining our borders, maintaining the safety of our federal highways and bridges, maintaining diplomatic relations with foreign states, and yes, maintaining the social net known as social security and medicare. Prior administrations of the federal government are responsible for setting up the expectations people have today with respect to social security and medicare. It rests with the current administration as well as future ones to deal effectively with the mess we have created for ourselves over the past fifty years.

Fiscal conservatism does not mean funding a military industrial complex so the United States can maintain a global military presence and domination. It does not mean the United States should continually fund wars for reasons not directly related to our national security. It does not mean the United States ought to feel responsible to finance foreign states through foreign aid, or as I like to say foreign welfare.

Fiscal conservatism does mean taking care of business at home. It does mean providing the necessary incentives for businesses, especially manufacturing, to keep production in the U.S.A. thus providing jobs for Americans. It does mean putting America first. It does mean placing our national self interest, and those of our people above the interests of all other nations. It does mean recognizing what that means and understanding what it doesn't.

Any reasonably intelligent individual knows we must get spending under control. They know that our continuing deficits and national debt will eventually strangle the nation if we don't. Most everyone realizes we must cut spending and cut it deeply, very deeply. And I suspect most, if they are honest with themselves, believe a balanced budget amendment is a good mechanism to help keep us in balance if we ever get there again.

Which leads me to the debt ceiling. Fiscal conservatism also teaches us that if you take an action that creates an obligation on your part you are bound to make good on said obligation. When the obligation becomes so unmanageable {as our debt has} that you must take action to reverse the trend you do so. By implementing short term as well as long term decisions that place you on firm fiscal footing again.

The current impasse over raising our national debt ceiling to meet our obligations has serious risks and likely will have serious consequences. Rational Nation USA has posted several opinions on this issue, this is another that's critical of the republicans. To those who call themselves fiscal conservatives, understand the foregoing. You must not take a position that result in defaulting on our national obligations because you are blinded by ideology.

Do the right thing now, the American people will understand, and then continue to fight to eliminate waste, control spending, win a balanced budget amendment, reform entitlements further, and keep us out of costly unnecessary wars that infringe on another nation's sovereignty.

I leave you with the following to consider. Taken from NationalJournal, July 16th edition.
In a presentation to the House Republican Conference on Friday, Jay Powell, a former Under Secretary at the Treasury Department under George H.W. Bush and a visiting scholar at the Bipartisan Policy Center, laid out just what would happen if a deal isn't reached.

On August 3, according to Powell's presentation, the federal government would be on the hook for $32 billion in committed spending, including $23 billion in Social Security checks, $500 million in federal worker salaries, $1.4 billion owed to Defense Department vendors and $100 million in refunds the IRS owes to businesses. On the same day, the government will take in only $12 billion in revenue, giving the government a $20 billion cash deficit. By August 15, when the federal government is on the hook for a $29 billion interest payment, the cash shortfall will have grown to $74 billion—and possibly more, if interest rates on U.S. debt rises.

The presentation, according to several sources in the room at the time, was aimed at conveying the seriousness of the moment. Recent warnings from Moody's and Standard & Poor's that they could downgrade the nation's debt have underscored the danger a default poses. It's a message Republicans on both sides of Capitol Hill have been trying to drive home to their members.

"There are serious repercussions for the country if the debt limit is not raised and it's important that members have information on what we may be facing. The aim is not to scare anyone but the facts are frightening," said a top Senate Republican aide.

But Republican leadership's task is far more complicated than simply convincing their members to vote one way or another. Instead, they must convince those members they are getting a good deal, which, given the slow pace of negotiations, is not a saleable pitch right now. "It would be a mistake to believe that any of our leaders will support a deal that is insufficiently aggressive on debt reduction or one that raises taxes," the House Republican aide said. {The Rest Here}

Via: Memeorandum

35 comments:

  1. I guess that social security lockbox really is empty...

    Another liberal lie exposed.

    ReplyDelete
  2. Silver,

    It wasn't liberals who looted SS.

    JMJ

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  3. Jersey: It was a bipartisan gang of pirates that looted it, and everything else that wasn't nailed down.

    That was supposed to be a trust fund with my grandma's money in it, but it is empty. Another liberal lie.

    ReplyDelete
  4. The moment that the Social Security Act, or whatever the frick is was called in the days of FDR, was passed the government attorneys at the direction of FDR immediately argued in front of the Supreme Judicial Court that the federal government should have the authority to "borrow" from the so called "trust fund" putting in IOU's in he placxe of the money which was to be paid back at a later date.

    That later date has never and the government has been doing so for the most part every since.

    Silver 1 JMJ 1/4 and only because I'm, as a liberal would say fair.

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  5. Why did Jersey get 1/4 point? He should have gotten nothing. He spouted a banal talking point that only a dimwit would argue against.

    I did not know that story about FDR's lawyers, but it explains much.

    Social Security was a liberal scheme, as slush fund, to get more of our money.

    The track record is clear. Liberals cannot be trusted with their grimy mitts on the levers of power.

    ReplyDelete
  6. Silver - JMJ gets 1/4 point for trying and remaining civil. He is not a dimwit actually, he is just a progressive who often gets caught up in the moment and the idiotic cause. He'll come around eventually.

    FDR was a shrewd pol, had charisma, and he was effective. Note I said effective not correct. As to the story you can research it for more detail.

    Given that Obama is actually playing a cynical game with the republicans, which by the way he is wining, I agree with your last statement.

    What I wish for is that the dimwitted republicans and tea party dimwits would stop underestimating Obama. He clearly knows how to manipulate and win.

    That aside, the republicans and so called conservatives in the republican party are playing with fire with respect to raising the debt ceiling. My fear is the idiots will force a blow up in the face of the American people at a cost to them and the nation.

    Blind ideology is a very dangerous trait, regardless of whatever ideology it might be.

    Wisdom trumps smarts every time.

    The mistakes that are costing the nation today were mad e many years ago and supported by so called conservatives as recently as GWB. PLEASE DO NOT FORGET THESE TRUTHS.

    Correcting colossal errors does not happen overnight, nor should they happen in a fashion that jeopardizes the social order.

    Remember, Rome was not built in a day.

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  7. Yup. And for the record, I did not call Jersey a dimwit.

    What I said:

    "He spouted a banal talking point that only a dimwit would argue against.

    Just want to keep the record straight. I really try not to call names unless the target really, really deserves it, and Jersey does not. He's a fitting spokesman for the loony left.

    And I like his "you lookin' at me?" attitude. He's the kind of guy you want on your city league softball team.

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  8. Silver - Accept my sincere appology. Apparently I misinterpreted your comment with respect to JMJ.

    Indeed I hope to someday meet JMJ face to face, have dinner, and of course a few beers. All so I can set him straight about several items of political importance and consequence. ;)

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  9. Silver and Les,

    Guys, I would love to meet you both someday! You guys are stand-up good guys. I'm certain we'd all have laughs to last a lifetime. I'm a pretty fun guy... I come from the school of "life is short and absurd, so make fun of it as fast as you can." Also, when I debate and spar intellect with people in person, I am always respectful and warm - always - but as honest and just as vociferously opinionated as I am online. I pride myself in that, and I'm not usually that vain. But I think it's everything. ;)

    Speaking of...

    "Jersey: It was a bipartisan gang of pirates that looted (social security), and everything else that wasn't nailed down."

    Yes. Exactly. A bipartisan gang, comprised of powerful Democrats and Republicans over the years.

    Hardly what I would call liberals - or conservatives either.

    No real liberal nor conservative agreed with the looting of SS. It was the insidious pervasion of economic thought that the government should borrow more from the private sector for it's spending by essentially mortgaging SS and Medicare, rather then simply raise the revenues - the taxes - the money government always in the end has to raise anyway.

    This was the Milton Freidman school of economics, and it's been a disaster.

    "That was supposed to be a trust fund with my grandma's money in it, but it is empty."

    It's not empty, Silver, don't be ridiculous.

    And no educated liberal or conservative understands SS to be a pure "trust fund." SS is a flatly adjusted transfer of wealth - and a very wise investment, by the way, if simply left to itself and not looted. The only "trust" is supposed to be the direct taxation - that the taxes paid to the SSA are ONLY for the SSA. When the SSA essentially "invests" in the strength of the dollar, we are hedging old people's retirement money, our directed tax dollars for them, against borrowing from the unpredictable private sector.

    It's not so much that it's risky, but that it's unethical. It creates a Wall Street laundering racket for turing payroll taxes into bank profits.

    Is there anything "liberal" or "conservative" here, guys???

    Social Security was not a "liberal scheme." The general idea, in one form or another, had been out there since our founding - even universal education and healthcare too! SS was not hatched in a dark basement filled with Woody Allen characters.

    SS is a smart and necessary investment for a growing, dynamic, large, constantly emerging economy.

    For instance. By easing retirement, we open the workforce for upward mobility.

    We see now the effects of people retiring later and later in life - thanks to the sleazy destruction of the unions and pensions - and it's underemployment and stagnant wages.

    SS does cause a problem there, though ironically it's because we TAX SS EARNINGS! Which is insane - and another sleazy, destructive policy.

    By taxing SS earnings (lumping them in with gross earnings), people who receive SS are impelled to work for lower wages, even though they have superior skills, lowering wages in high-skill sectors.

    High-destructive.

    Oh, and guys, I'm a pretty good musician, I'd love to jam, Silver. Do you play music, Les? We need Skype.

    We should start a Skype-blog. Can that be done?

    Hey! IT guy!!! C'mere!!! ;)

    JMJ

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  10. The skype thing would be fun, but nothing beats jamming in person.

    I'm grilling right now and to an outsider who doesn't appreciate good music, the transitions can be jarring... from Neil Young to Waylon, to Radio Head to Old Crow Medicine Show to traditional bluegrass.

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  11. Interesting that the most successful businessperson and experienced chief executive, Mitt Romney, from the republican side hasn't been proclaimed the nominee by acclamation yet. he seems to embody what you support Les. Shame that he's had to spend more time proving he's amenable to the tea party kooks and social conservatives rather than lay out his plans for spending and investment in America.

    As for Silverfish's comment, you're mad that your mother's Social Security payment is in danger yet you hate Social Security.

    And although I was young I do recall a big borrowing from Social Security in the early 70's under Nixon because it had such a big surplus.

    They're all guilty and it was quite disingenuous of call the Social Security trust fund raiding a liberal lie. Although it was worthy of the evasive and always BS'ing Grover Norquist.

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  12. If we eliminate SS, we are stuck with 55 million retired folk. Anyone thought that out?

    ReplyDelete
  13. There are a lot of relatively easy things that we could do to reduce the deficit. a) Means-test social security (a wealthy person gets 10% less) and Medicare (a wealthy person pays 10% more). b) Have the federal government negotiate directly with the drug companies for Medicare and Medicaid (a savings of 15-25 billion a year). c) Close a dozen or so of these foreign military bases (starting with Aruba, perhaps). d) A 2-year federal worker wage freeze (6 billion a year for ten years). e) Expedite the withdrawal from Afghanistan and transition quickly to an anti-terror policy (tens of billions in savings there). f) Eliminate special tax breaks for oil companies (another 3-4 billion a year). g) Raise the retirement age by 6 months. h) cut foreign aid by 10-20% (5-10 billion in savings). Cut farm subsidies by 10-20% (another 2-4 billion in savings). Just for starters.

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  14. It's my Granny's social security. Supposedly, they locked her money away in a lock box. Guess they were lying...

    Jersey: If the lock box ain't empty, they why did Obama say he can't guarantee the checks will go out?

    If things collapse, me and mine can take care of our retirees in our family, thank you very much.

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  15. Silver, the executive branch of government signs the entitlement checks.

    It's as simple, and as limited, as that.

    JMJ

    ReplyDelete
  16. Good post, Les. I agree whole-heartedly with just about everything you have to say. Particularly drastically reducing the amount spent on the military. Talk about a sacred cow. Eliminating 50% or more of the Pentagon budget and eliminating any and all private contracts, (other than those of certain manufacturers of airplanes, vehicles, munitions, etc.) would more or less take care of all of our deficit problems as soon as it could possibly be implemented. Your position is a lot closer to that of the elder Paul than it is to the republican mainstream. Certainly Dick Cheney, (shudder,) would not go along with any such plan. Foreign aid is mostly military as well. I say wait until somebody else starts a war. I'm sure we could get up to speed fast enough no matter what happens.

    Nice try SF. I don't have any idea why republicans think this "lock box" idea is so fucking funny, but news flash, Gore didn't get his SS lock box, am I right?

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  17. @Junior: Eliminating 50% or more of the Pentagon budget and eliminating any and all private contracts, (other than those of certain manufacturers of airplanes, vehicles, munitions, etc.) would more or less take care of all of our deficit problems

    You need to check your math. Cutting the pentagon 50% won't begin to touch the $1 trillion plus Obama annual deficits.

    Thank you for making this statement. It's indicative of the delusions the left suffers under.

    http://www.whitehouse.gov/omb/factsheet_department_defense/

    ReplyDelete
  18. Actually SF to just cut the defense budget would not make that big of a difference.

    But to cut military spending...since the wars are not covered in the "defense budget" and neither is the nuclear arsenal, or satelites or a whole bunch of other things then the reality is we could get real close if not succeed in meeting our deficit problems.

    Then when you add the future liability of supporting Veterans and caring for vets we need to do something real quick or we will find ourselves in exactly the same situation 20 years from now that we find ourselves in today...but then it will be retired and wounded vets rather than the elderly and the poor...

    Hmm, will we treat them all the same?

    ReplyDelete
  19. FJ - Thanks for the comment. However please observe the site policy, ie: -

    ..."lock box" idea is so fucking funny, but news flash, Gore didn't get his SS lock box, am I right?"

    Note: As this site encourages free speech and expression, any and all political commentary is acceptable. Comments with cursing or vulgar language will, however, be removed.

    Just a reminder, I am confident you will respect the reasonable policy so as to keep this a G rated site.

    Thanks,

    Les

    ReplyDelete
  20. Gore didn't get his lock box. Nor in the end did anyone believe him when he claimed to have created the Internet.

    Jersey said: "Silver, the executive branch of government signs the entitlement checks."

    So Obama is refusing to sign SS checks for no other reason than to try and bully people into supporting his budget policies.

    Either that, or he's just too lazy to order it. Time to go golfing, that's more important.

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  21. Will said: "e) Expedite the withdrawal from Afghanistan and transition quickly to an anti-terror policy (tens of billions in savings there)."

    As long as this means still eliminating the Taliban where-ever they are found.

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  22. Will said: "f) Eliminate special tax breaks for oil companies (another 3-4 billion a year)."

    Now, this I strongly disagree with. We need to strive to make gasoline a lot cheaper, not institute measures that will force the oil companies to raise the price even more. The kick in the teeth this would cause to the economy will cause a loss in tax revenues much greater than the $3-4 billion a year "Gained" by the government extorting even more from the oil producers.

    ReplyDelete
  23. Jersey said: "We see now the effects of people retiring later and later in life - thanks to the sleazy destruction of the unions and pensions - and it's underemployment..."

    Well it is true that the destruction is caused BY the unions, which have been a major cause of unemployment by forcing domestic industry to close or move overseas.

    Even now, Boeing is trying to build a new factory in South Carolina, with a lot of new high-paying jobs.

    The unions are saying "no", a situation which might have the result of forcing Boeing to build this factory in another country.

    America works best when we say "union NO" and instead work for a fair wage.

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  24. This is what I love about free market capitalists:

    "Will said: "f) Eliminate special tax breaks for oil companies (another 3-4 billion a year)."

    Now, this I strongly disagree with. We need to strive to make gasoline a lot cheaper, not institute measures that will force the oil companies to raise the price even more. The kick in the teeth this would cause to the economy will cause a loss in tax revenues much greater than the $3-4 billion a year "Gained" by the government extorting even more from the oil producers."

    So, basically Dmarks says its okay for government to subsidize the price of gas...we need to do whatever it takes to make job creation cheap, oil cheap, food cheap, and on an on it goes....what a socialist Dmarks is....

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  25. @TAO: But to cut military spending...since the wars are not covered in the "defense budget" and neither is the nuclear arsenal, or satelites or a whole bunch of other things then the reality is we could get real close if not succeed in meeting our deficit problems.

    Other than the "off-budget" war funding, I think you're wrong on this one, TAO.

    Nukes and satellites are part of the DoD budget. And would you really cut communications satellites our forces rely on? These are not belligerent instruments of war, but rather part of our defense communications infrastructure.

    Anyway, please link to a government budget document showing these thing are not in the DoD budget.

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  26. Nukes are covered under the budget for the department of energy and satelites are under NASA's budget...

    Its like food stamps and the school lunch programs are run by the department of agriculture not health and human services or the department of education...

    ReplyDelete
  27. Tao said: "So, basically Dmarks says its okay for government to subsidize the price of gas"

    Basically, not at all. I am completely opposed to all such subsidies.

    "sub·si·dy/ˈsəbsidē/Noun
    1. A sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive.
    2. A grant or contribution of money.
    "

    However, what I would preserve is a tax break. A tax break is merely stealing less from someone. It's not a gift, not a grant from the government, and does not meet the definition of a subsidy in any way. If you let someone keep more of what is their own, it is not a subsidy.

    My idea? Don't clobber industry by stealing more from it (forcing it to leave the the country and fire people), but by all means end those ridiculous subsidies (like ethanol ones).

    "...we need to do whatever it takes to make job creation cheap, oil cheap, food cheap, and on an on it goes....what a socialist Dmarks"

    What wild conclusions you come to when you don't read what you are commenting on. You were really winging it on this one.

    If a mugger takes your wallet and doesn't steal your shoes, do you consider the shoes a gift?

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  28. Dmarks,

    Check out when BP and or Exxon paid federal income taxes....then study their financials and let me know when was the last time they lost money.

    Then, why you are educating yourself, study how much oil they extract domestically and how much of that oil they then transport to other countries where they earn a higher profit....like those socialist countries in Europe.

    You are subsidizing the oil companies plain and simple....and that's socialism...because they do not pay taxes...so you are not returning more of their money to them....in fact they have tax credits sitting on their books to use in the future.

    ReplyDelete
  29. @TAO: Nukes are covered under the budget for the department of energy and satelites are under NASA's budget...

    Wrong.

    I was charitable in my answer earlier, hoping to be gracious and give you a chance to check your facts. Obviously you did not, or you would not have doubled down on your embarrassing ignorance.

    So OK, I'll spoon feed you. The Department of Defense budget includes funds for procuring and maintaining nuclear weapons and satellites.

    Go read this:

    http://comptroller.defense.gov/budget.html

    Another example of why budgetary matters cannot be discussed with liberals. They don't do their homework.

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  30. Tao said: "You are subsidizing the oil companies plain and simple."

    Again, read my earlier comment, where I pointed out that subsidies require an actual gift.

    A situation involving letting people keep more of what is theirs in the first place is not a gift. Study the definition of subsidy and get back to me. Looks like you might need spoon feeding as well.

    Also, you seem to be playing some sort of opposites game. Usually people claim that over-taxation is socialism. It's often careless and plays fast and loose with the definition of socialism, but the point is generally good (as more taxation means more power by the ruling elites....a central feature of socialism).

    And now you are claiming that under-taxation, which results in a libertarian situation (people controlling their own money, the government controlling less) is "socialism". You are using terms with no regards to any actual meaning, just like when you call letting people keep what they own a gift from the government.

    "...then study their financials and let me know when was the last time they lost money."

    Well, this is a good point. These companies won't eat the greedy tax hikes you favor. They will pass it on to the average American working joe, at the pump. No wonder the Democrats' idea of forcing oil companies to raise gas prices fell flat. We need to push for lower prices at the pump, not higher.

    Sorry, Tao, you are really strike out completely with this one. You usually do a lot better than this.

    ReplyDelete
  31. Here is a source for SF: http://www.warresisters.org/pages/piechart.htm

    As far as Dmarks goes...its obvious he has never read a financial statement...nor does he aware of the concept of NOL and carry forward...

    ReplyDelete
  32. TAO: I don't know what that America hating website you gave us the link to has anything to do with the fact that you are wrong about what's in the DoD budget.

    Do your homework and stop wasting our time with you blatant, baldfaced ignorance.

    ReplyDelete
  33. TAO: You are also wrong that cutting all defense spending would solve the problem.

    Your hero Obama's deficit's are $1.5 trillion per annum. Your thumbsucking pacifist link says total defense spending is 900 billion. So according to your own source, slashing defense 50% would cover about 1/3 of Obama's profligacy.

    Dig deeper dude.

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  34. Looks like flying junior crapped out a load of bs and then flew the coop...

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  35. OK TAO: I went back and read your communist propaganda site again, and I see that they include past military spending as well and the total comes to $1.4 trillion.

    So if we take your suggestion and yank all benefits from retirees and wounded veterans as well as zero out all current military spending, Obummer only has to find $100 billion more to balance his budget.

    You should run for congress. Anthony Wiener's district could use a lefty like you...

    ReplyDelete

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