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National Debt

Boehner to Wall Street: Drop Dead

From National Review:

If Republicans listen to many of their new financial friends at banks, hedge funds, and other investment firms, they will do the “responsible thing” and vote to immediately raise the debt ceiling to whatever level Treasury Secretary Tim Geithner thinks appropriate. And then they will agree to big tax increases to balance the budget.

But House Speaker John Boehner told the Economic Club of New York last night that the House GOP will agree to neither. Tax hikes are off the table. And spending cuts “should be greater than the accompanying increase in debt authority the president is given.” (The only thing missing was Big John telling Senator Geary to personally put up the fee for the gaming license.)

Tough stuff that the audience didn’t much like. And a nice change of pace after Republicans listened to the bankers and backed off fledgling efforts earlier this year to let debt-burdened states declare bankruptcy. (Bad for Wall Street’s pension-fund clients.)

But not raising the debt ceiling at Geithner’s urging is not the same thing as defaulting on U.S. debt obligations, a separation that would be clearer if Congress passed Sen. Pat Toomey’s Full Faith and Credit Act bill, which would prioritize debt payments. And GOPers should think twice about listening to people afflicted with Clinton nostalgia — and high-priced tax attorneys to help them avoid the IRS. A good start to the second phase of the anti-spending spring offensive.

Obama Administration Tried to Keep S&P from Issuing Issuing Negative Outlook on U.S. Debt

From The Weekly Standard:

The Washington Post reports:

The Obama administration privately urged Standard & Poor’s in recent weeks not to lower its outlook on the United States — a suggestion the ratings agency ignored Monday, two people familiar with the matter said.

Treasury Department officials had been discussing with S&P whether the ratings agency should change its outlook on the United States to “negative” from “stable,” an indication that the country could lose its crucial AAA rating in coming years over its soaring debt levels.

Treasury officials told S&P analysts that they were underestimating the ability of politicians in Washington to fashion a compromise to curb deficits, a Treasury official said. They argued a change in ratings was not needed at this time because the debt was manageable and the administration had a viable plan in the works, the official said.

But S&P analysts told Treasury officials on Friday that they were unmoved — and released a report that expressed skepticism that the political parties could come together on how to bring spending in line with revenue.

So the president gives partisan barnburner of a speech attacking the Republican debt plan, while the Treasury is hard at work trying to change the S&P’s mind. The S&P remains unmoved, precisely because they fear compromise between the two parties is unlikely to occur — a problem greatly exacerbated by the president’s speech.

Meanwhile, Rasmussen reports that consumer confidence is falling…

The Rasmussen Consumer Index, which measures the economic confidence of consumers on a daily basis, has fallen eight points since Monday morning to 74.4. This Wednesday, consumer confidence is down six points from a week ago, down two points from a month ago, and down eleven points from three months ago. It is just a single point above the lowest level of 2011.

The Rasmussen Investor Index fell six points today to a seven month low.  At 81.1, the Investor index down nine points since the S&P announcement, down eight points from a week ago and down thirteen points from the beginning of the year. Investor confidence in the economy is now at the lowest level since last September 18.

That’s not surprising — the S&P’s announcement might even be overshadowed in the public’s mind by concern over gas prices and inflation at the moment. Though the S&P’s sounding the alarm over debt certainly didn’t help.

What’s fascinating is the left’s collective freakout over the S&P. Given a $14 trillion debt and a divided government, concern that the problem won’t be addressed soon enough seems understandable. But to hear the left tell it, the S&P is “Running Interference for the Right to Help Crush Social Security and Medicare.” Yet, any rational person will tell you it’s the debt itself that threatens to crush Social Security and Medicare.

 

Barack Obama Is Directly To Blame For the S&P Downgrade

From RedState:

If you have been away for the past twenty-four hours, you missed that for the first time since its founding in 1941, Standards and Poor downgraded our nation’s credit outlook. S&P believes there is a 33% change it will downgrade the nation’s AAA credit rating in the next two years.

For the past year, Democrats have spent freely arguing that their free spending ways did not matter. In fact, Barack Obama’s proposed budget for 2012 increases the national debt to 116% of gross domestic product, even while adding $2 trillion in tax increases.

It is not that budget proposal that became the straw to break the camel’s back.

It was not even his trillion dollar stimulus plan or his multi-trillion dollar stimulus plan than became the straw to break the camel’s back.

In fact, it was Barack Obama’s disastrous speech last week that broke the camel’s back.

As James Pethokoukis noted, Obama’s muddled plan to solve the crisis was “fastened together by the chewing gum and sticky tape of rosy economic assumptions and fiscal opacity.” But more so, it was Barack Obama’s angry words and denunciation of Paul Ryan’s own plan that drove S&P to its conclusion.

S&P said

We view President Obama’s and Congressman Ryan’s proposals as the starting point of a process aimed at broader engagement, which could result in substantial and lasting U.S. government fiscal consolidation. That said, we see the path to agreement as challenging because the gap between the parties remains wide. We believe there is a significant risk that Congressional negotiations could result in no agreement on a medium-term fiscal strategy until after the fall 2012 Congressional and Presidential elections. If so, the first budget proposal that could include related measures would be Budget 2014 (for the fiscal year beginning Oct. 1, 2013), and we believe a delay beyond that time is possible.

Remember, up until the President’s attack, even Democrats on the Deficit Commission were praising Paul Ryan’s willingness to engage the issue “at an adult level.” Everyone expects congressional partisans to take pot shots, but for the President of the United States to have a temper tantrum over it akin to a three year old denied a lollipop? That’s unheard of.

The President’s open hostility to an adult plan while offering no substantive plan of his own was the straw that broke the camel’s back. And because Mr. Obama still cannot deal with the issue as an adult, we will keep heading down this treacherous road.

 

Brother, Can You Spare a Trillion?

From Moonbattery:

Here’s why a government that wished this country well would live within its means:

Just as the malefactors running the federal government live on borrowed money, we are living on borrowed time. Even if we immediately put them in prison where they belong, the total collapse of our economy and our way of life under the weight of this debt is probably inevitable. With every day we allow them to rule us it grows more certain.

The Budget’s Path to Prosperity

From National Review:

House Republicans will begin a new conversation in Washington as they offer a bold plan to start putting our fiscal house in order. A survey conducted last week for Let Freedom Ring, a grassroots organization supporting the conservative agenda, shows Americans are ready.

“Suppose a family was spending $16,000 more than they earn and they charged it to their credit card,” the survey asked. “If they decided to cut their spending by $610 and continued to charge the remaining $15,390 on their credit card, would you say that they had taken a serious step towards solving their spending problem?”

An overwhelming 86 percent of those surveyed said that would not be a serious attempt at reform. Only 5 percent said it would be, according to the survey conducted March 30 by Pulse Opinion Research. Yet the numbers equate to the budget offered by President Obama in February.

Clearly, Americans are ready to get the country’s fiscal house in order, and they don’t just want nicks around the edges of the deficit.

The budget plan, developed under House Budget Committee chairman Paul Ryan, will lay out a new vision for federal spending in the upcoming fiscal year. It’s designed to get us off the path we are on that will bankrupt the country with out-of-control entitlement spending and to offer reforms designed to strengthen the economy with tax reform and spending restraint.

Rep. Ryan told Chris Wallace on “Fox News Sunday” the GOP plan will cut spending by more than $4 trillion over the next decade: “We’re going to put out a budget that gets us on a path to not only balancing the budget, but gets us on a path to paying down the debt. . . . We save Medicare, save Medicaid. We save these entitlement programs; we repair our social safety net. And we get . . . a debt-free country for our children and grandchildren’s generation. And we get jobs — we get economic growth.”

Be prepared for a huge blowback to the plan from people resisting “change.” But ask yourself if we really have the option to stick our heads in the sand and pretend we can avoid the fiscal calamity that is coming. We can choose rationing, higher taxes, and more deficit spending — or these 21st century reforms. There will be a choice.

Read the rest at National Review.

A Warning for the Future?

From HoosierAccess:

Citizens Against Government Waste is set to run a national campaign meant to address our nation’s spending addiction.  Chances are you won’t see the ad on the major networks as they will probably take the same stance they did on a similar national campaign ad that was produced by W.R. Grace & Co. in 1986 and was only seen on cable because it was deemed “too controversial”.

Via the CAGW:

The new ad is part of an ongoing communications program in CAGW’s decades-long fight against wasteful government spending, increased taxes, out-of-control deficit spending, and a crippling national debt that threatens the future and survival of our country. CAGW plans to run the ad on major cable networks throughout the rest of 2010 and into 2011.

Think it’s too far out there?  Consider who is the major foreign holders of treasury securities (in billions of dollars).

Country
Dec 2009
Jun 2009
Dec 2008

SOURCE: US Treasury

China, Mainland 894.8 915.8 727.4
Japan 765.7 708.2 626
Oil Exporters 207.4 211.8 186.2
United Kingdom 178 89 130.9
Brazil 169.3 148.5 127
Hong Kong 148.7 95.7 77.2
Russia 141.8 143.3 116.4

Doesn’t seem too far out there now does it.

Webmaster’s note:  I also found the original commercial from 1986…

A Perfect Storm: Deficit Soaring…Debt Soaring…Number Who Pay No Taxes…Soaring

From Big Government:

The “Perfect Storm,” described by author Sebastian Junger in his 1997 best-selling novel by the same name, referred to a confluence of weather conditions that produced a monster hurricane off the coast of New England.  Today the term is commonly used to describe any combination of circumstances that drastically aggravate any given situation. For example, an exponential increase in the number of retired elderly Americans who require more health care being supported by a declining number of young Americans who provide the funds to cover those health care costs. With over 70 million baby boomers about to retire we, indeed, have the conditions for a perfect storm.

The President and Congress seem to have no trouble grasping the logic that the more people who share the cost of health care the less the cost per capita will be.  In fact, the very cornerstone of their health care program is that everyone be required to pay into the system with which we manage the nation’s health care.  That same logic, however, seems to elude them when it comes to sharing the growing cost of government.  They consistently propose that we compensate for the ever-diminishing number of American taxpayers by simply increasing the taxes on those who already pay the most.  Their mantra for every expansion of government programs is that the wealthy should pay their fair share. How can you argue with that? Shouldn’t everyone pay his or her fair share, whatever that is?

 Unfortunately, the path we have traveled in the past half century in relentlessly increasing so-called “entitlement” expenditures has put us on the horns of a dilemma in which the number of Americans who pay absolutely no taxes is soaring at the very time government spending is producing a voracious federal appetite for tax revenue.  The good news is that 142 million tax returns were filed in 2008 (the last year for which data are available). The bad news is that nearly 52 million of those returns, utilizing a potpourri of deductions, exemptions and tax credits, reported zero taxes due.  What is even worse is that, in just the last ten years, the number of tax filers reporting zero taxes due has increased by 60 percent.  So just how did such a bizarre reality come to be?  The answer is simple: politics.

Read the (very long) article on Big Government.

God Bless America

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The present Constitution is the standard to which we are to cling. Under its banners, bona fide must we combat our political foes — rejecting all changes but through the channel itself provides for amendments. — Alexander Hamilton, letter to James Bayard, April, 1802

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