The debt problem -- to raise the ceiling, etc. Look we have to do it. But Obama wants to punt this thorny question out to beyond the election so that he can avoid making difficult decisions now -- decisions like cutting medicare and medicaid and of course, social security. No WAY he can get re-elected if he slices into those. So in his ego-maniacal quest for re-election, he is perfectly ready to risk the U.S. economy, bond rating and hence maybe world economic stability for his own interests in 2012. THAT, my friends, is the story with Obama. THAT is the man you idiot liberals and hopey-changey dunderheads elected.
Reality is that we are broke. Obama bears more than a little responsibility for it, along with Pelosi and Reid: Keynesian economics do not and have not ever worked. You cannot spend your way into prosperity: at some point there is nothing left to spend ... and that is now. And history has also shown us that you cannot simply tax your way to prosperity: every time that the marginal rate on "the rich" has risen, receipts have gone down. If you consider that the real growth engine of American prosperity is the privately held company, taxing corporations more will simply cause corporations to hire less (more unemployment) and make fewer distributions to shareholders and finagle retained earnings (lower corporate tax receipts and lower personal income tax receipts). Go ahead and close loopholes on the GEs and the Exxons -- you should. But raise their cost of doing business, and you might find them headquartered in Belize.
Reid and the Senate Democrats assume (perhaps rightly) that we are all too stupid to understand his deal: trillions in "spending cuts" rendered by "savings" in elimination of fraud and waste in government programs (has there ever been ONE case where this has been true) and "savings" (that is not spending) due to Afghanistan and Iraq withdrawals. And of course, raise the debt ceiling. Does that get us ANYWHERE? No, it does not. It is a punt by a deluded power-hungry maniac to secure re-election for his party that has tried and done more in three years to destroy America's prospects than any other group ... ever. The 1960's KGB could not have dreamed up this scenario.
Boehner ... (see I am being fair and attacking Republican idiots too) ... wants relatively small cuts in spending, a small raise to the debt ceiling and punts the difficult spending cuts to next year ... where it can sit in committee like a smelly turd on Obama's plate. Which is why Obama will veto it, damn the risk to the international markets -- it is a serious mistake to believe that ANYONE in the West Wing even understands macro-economics. Hell, we don't even know that Obama ever took a course in economics -- he won't release his transcripts.
Boehner also wants to punt so that his party can get re-elected ... by making Democrats look to be the evil party during next year's election. He, too, is willing to risk everything for partisan politics. And his Tea Party friends won't go along with it. He couldn't get the votes last night.
So now to the Tea Party. Notwithstanding what you might hear in the Press which characterizes these people as idiots and loonies (particularly in Europe where there is no notion at all of fiscal restraint -- except in Germany), the Tea Party beef is this: if we don't do something now, we are doomed. In that simple statement, they are entirely correct. But, they do not appear to understand the risks of debt default -- or maybe they do and that is the hammer they need to wield to get somewhere. Remember, folks, these people were elected last year PRECISELY on the platform of what they are doing now. Stop the insanity -- stop the spending, stop the entitlement growth, shrink government. All of which seem pretty damn good to me.
Why should we cut spending? A simple way of looking at it is this: we will wind up sending 70% of our tax revenues to the Chinese within 10 years if Obama has his way. The Chinese, in case you may have forgotten, are not our friends. The more you owe, the more the schoolyard bully can command your obedience.
What needs to happen now?
Without going into "mandatory spending" and other lunatic ideas (those are dollars Congress has created laws to bind themselves to spend on programs -- not that Congress is barred from repealing those laws), we need to cut trillions out of future spending: (1) repeal Obamacare (perhaps 10 trillion over the next decade in one swoop); (2) cut medicare / medicaid to spending based on needs testing; (3) cut social security to spending based on needs testing; (4) eliminate federal bureaucracy overlaps; (5) eliminate domestic spending on illegal immigrants; (6) eliminate tax loopholes for large corporations; (7) eliminate mortgage tax deduction (or at least limit to first $300,000 plus no second homes) -- a realistic price bottom will be set, phase it in over 5 years; AND .. take a big breath ... impose a federal value-added tax the receipts of which will go solely to the reduction of federal debt. If or when the VAT pays off the deficit, then it is reduced but directed to fund education and scientific research -- to get our edge back.
I could add that moronic EPA regulations that threaten to impose hundreds of billions in burdens are not particularly bright at this time. Oh, yeah ... NASA came out (yesterday) and stated that the models of heat retention based on CO2 emissions are all wrong: significantly more heat is radiated by Earth than had ever been considered. The guy who stated that the Polar Bears are drowning? He was placed on administrative leave this week because of scientific misconduct in getting to that "result." In other words ... he faked it.
Some other comments.
People have this end-of-the-world notion about default ... it is not really necessary. Look, we continue to receive taxes -- if the receipts are directed solely to payment of debt obligations, we are not in default. Simple. But it does mean that federal programs will not have money to spend, because it is going to the Chinese. That means making extremely difficult decisions on what to cut here and now because we can't blow the budget. This is where "mandatory spending" comes in .. it is like some evil tax and spend demon purposely created that notion so that his/her special interest would never face this day.
So do we send $$$ to Granny living in Boca with a $2million portfolio or to Lateesha/Consuelo/BarbaraAnn and her five children in their trailer? Granny and hubby paid into Soc Sec all those years (until raided by Dems and left with an IOU) ... and our trailer trash have never paid in at all ... or even paid taxes. But those poor kids -- no food to eat in front of the 60 inch LCD with their X-box!! Boehner would have to pass laws in Congress and the Democrats would have to make the Administrative decisions -- controlled by the Executive Branch ... back to Brother Barry. Obama couldn't get elected dog catcher if his realm of welfare recipients and trailer dwellers stopped getting their checks. So might Barry simply stop paying the Chinese? That is what is scaring the international markets: the realization that Obama and Boehner are so concerned with their own partisan problems that they just might.
Last Word
The debt commission in April came out with concrete and feasible cuts and actions -- bipartisan and based on sound numbers. Obama rejected that out of hand. The Gang of Six proposed cuts we could all live with and sensible debt reduction plans. Reid, Boehner and most importantly, Obama rejected them. Where is our leadership?
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