For the past few days, we've delved into the problems with the debt limit deal that was signed last week. Today, we're going to talk about who is to blame for this bad deal, and there is plenty to go around.
Before we get to the deal, I'm going to tell you who ISN'T to blame: the Tea Party. Despite what the President and the Drive-By Media are trying to tell us, the Tea Party tried to do the right thing. S & P gave a specific recommendation to avoid a drop in our credit rating: cut at least $4 Trillion over the next ten years. The Cut, Cap and Balance plan did just that and more. When the House was given the chance to vote on Cut, Cap and Balance, they passed it. Then Harry Reid refused to let it see a vote in the Senate. Many Tea Party members even refused to vote for the deal that was ultimately passed. I’ve said since the election that we need to keep a separate scorecard for the Tea Party. In this debate, the Tea Party gets A’s.
Now to pass out blame: I’m going to break with my usual pattern here, and start with the old guard Republicans. This includes the RINOs, but it’s not just the Republicans in name only to blame here. There are some legitimate Republicans who caved on this deal. Speaker Boehner, I’ve defended you, but you are chief amongst the cavers.
Speaker Boehner and other Republicans acted in fear. Typical of modern GOP, there was a widespread fear that if the GOP didn’t pass a debt limit increase, the Drive-By Media would be super mean to Republicans and call them mean names and generally pick on them and ultimately blame them for the default. Just for the record, what would you call what’s going on now?
The Drive-By Media and Liberals in general were always going to blame the Republican Party. They’ve tried to blame the Tea Party for the S & P credit rating downgrade, which we’ve already shown is as ridiculous as finding an emotional engineer. (To any engineers reading, I have the utmost respect for engineers. My hero, my late grandfather, was an engineer. No offense intended.) The choice for the GOP to avoid blame didn’t exist. What did exist was a choice between being criticized for doing the right thing or being criticized for doing the wrong thing. The GOP chose to do the wrong thing.
I for one am absolutely sick and tired of the cowardice shown by the old guard GOP. We put you back in power so you could do things the right way, not play politics as usual. You’ve chosen to play politics as usual. As a Tea Party member, I can guarantee you that you will be facing primary challenges in 2012 in the best case scenario. (Speaker Boehner, that means you.) At worst, if wiser heads do not prevail, you may have just divided the GOP.
Now to the Democratic Party and President Obama: You had no plan, but continually shot down every plan suggested. You continued to demand tax increases in a bad economy with unemployment remaining above 9%, a move that would have been poison to the economy, because it’s page one in your playbook. Rather than do the right thing for the American people, you demonized the Cut, Cap and Balance plan that 66% of Americans supported and refused to even let it come to a vote. When I called the GOP cowards, I saved some for you too. You were too cowardly to do the right thing in favor of sticking to your politics.
America is not Liberal. We do not want your redistributionist policies. That’s why you have to lie about them to get elected and pretend to be moderates. In 2010 we shellacked you. In 2012, be ready for more of the same as the Tea Party continues to take over the American political scene.
In the end, this bad deal is bad for America. Even with the cuts included, we will be doubling our debt in the next ten years. It is a mathematical certainty that if we continue to spend in deficits to this degree we will ultimately be bankrupt. It is time to get our fiscal house in order, and that means real, significant cuts in spending. $2.1 Trillion in cuts is not enough. We needed to get to the point where we are cutting $16 Trillion over ten years. We cannot afford more of this spending. It’s time to get really serious about cutting spending. With the exception of the Tea Party, no one in elected office is serious. That means it’s time to get rid of them. 2012, here we come!
Showing posts with label debt limit deal. Show all posts
Showing posts with label debt limit deal. Show all posts
Thursday, August 11, 2011
Wednesday, August 10, 2011
Reactions to the Debt Limit Deal - Credit Rating Reduced
All this week we've been discussing reactions to the Debt Limit deal reached last week. Today, we're going to talk about the issue of our dropped credit rating by Standard and Poors.
Two weeks ago, S & P stated that there was a 50/50 chance that, if the debt deal did not consist of at least $4 Trillion in cuts over 10 years, that the United States would lose it's AAA Credit Rating. After the deal, S & P dropped our rating to AA+. It was predicted in many places, by the way, including here at Biblical Conservatism. (1) This deal fell tragically short of the $4 Trillion that S & P said would allow the United States to avoid the rating decrease (fell short by nearly half, for those of you from Palm Beach County, FL).
As Rush Limbaugh commented Monday, Obama has spent so much time talking about what he "inherited from George W. Bush." Well, as Limbaugh noted, Obama inherited a AAA credit rating from Bush. He has officially squandered it by failing to make sufficient cuts to our deficits over the next 10 years. S & P stated in it's report that included the credit rating drop,
"Even assuming that at least $2.1 trillion of the spending reductions the act envisages are implemented, we maintain our view that the U.S. net general government debt burden (all levels of government combined, excluding liquid financial assets) will likely continue to grow." (2)
For those of you who haven't studied economics, that the spending cuts are not enough to offset the growing debt burden. For those of you from Palm Beach County, FL, that means we're going to continue to owe lots and lots of money while bringing in not enough money to pay for the lots and lots of money we owe.
Further, S & P has stated:
The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently assume could lead us to lower the long-term rating again. (2)
For those of you from Palm Beach County, FL, that means our rating could drop more. We are on a trajectory to eventually have our entire budget be required to service the debt, or borrow money to pay the debt, at any rate it's a path to bankruptcy, eventually. We cannot continue to add $15 Trillion or so to our debt every decade. Ultimately, we will drown in debt. We will dream of having an AA+ credit rating at that point.
We needed to make much larger cuts and move toward a balanced budget to be able to return our national credit to the AAA rating and we need to get to a point where we are paying off our debt. I've been in debt. I've paid it off by intentionally not incurring new debt and living on less money than I had coming in. I didn't get out of debt by continuing to charge more on my credit cards. Make no mistake about it, we deserved this downgrade.
Further, we were not downgraded because the Tea Party demanded larger cuts. We were downgraded because we failed to cut ENOUGH. S & P told us last week that if we didn't cut at least $4 Trillion we would quite possibly see our rating cut. We failed to cut $4 Trillion, and our rating was cut. We spend too much and we borrow too much. Period.
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(1) Debt Limit Alone Won't Save AAA Credit Rating
(2) United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative
Two weeks ago, S & P stated that there was a 50/50 chance that, if the debt deal did not consist of at least $4 Trillion in cuts over 10 years, that the United States would lose it's AAA Credit Rating. After the deal, S & P dropped our rating to AA+. It was predicted in many places, by the way, including here at Biblical Conservatism. (1) This deal fell tragically short of the $4 Trillion that S & P said would allow the United States to avoid the rating decrease (fell short by nearly half, for those of you from Palm Beach County, FL).
As Rush Limbaugh commented Monday, Obama has spent so much time talking about what he "inherited from George W. Bush." Well, as Limbaugh noted, Obama inherited a AAA credit rating from Bush. He has officially squandered it by failing to make sufficient cuts to our deficits over the next 10 years. S & P stated in it's report that included the credit rating drop,
"Even assuming that at least $2.1 trillion of the spending reductions the act envisages are implemented, we maintain our view that the U.S. net general government debt burden (all levels of government combined, excluding liquid financial assets) will likely continue to grow." (2)
For those of you who haven't studied economics, that the spending cuts are not enough to offset the growing debt burden. For those of you from Palm Beach County, FL, that means we're going to continue to owe lots and lots of money while bringing in not enough money to pay for the lots and lots of money we owe.
Further, S & P has stated:
The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently assume could lead us to lower the long-term rating again. (2)
For those of you from Palm Beach County, FL, that means our rating could drop more. We are on a trajectory to eventually have our entire budget be required to service the debt, or borrow money to pay the debt, at any rate it's a path to bankruptcy, eventually. We cannot continue to add $15 Trillion or so to our debt every decade. Ultimately, we will drown in debt. We will dream of having an AA+ credit rating at that point.
We needed to make much larger cuts and move toward a balanced budget to be able to return our national credit to the AAA rating and we need to get to a point where we are paying off our debt. I've been in debt. I've paid it off by intentionally not incurring new debt and living on less money than I had coming in. I didn't get out of debt by continuing to charge more on my credit cards. Make no mistake about it, we deserved this downgrade.
Further, we were not downgraded because the Tea Party demanded larger cuts. We were downgraded because we failed to cut ENOUGH. S & P told us last week that if we didn't cut at least $4 Trillion we would quite possibly see our rating cut. We failed to cut $4 Trillion, and our rating was cut. We spend too much and we borrow too much. Period.
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(1) Debt Limit Alone Won't Save AAA Credit Rating
(2) United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative
Tuesday, August 9, 2011
Reactions to the Debt Limit Deal - The Trigger Cuts Problem
Yesterday, I began our response to the bad debt limit deal that was passed last week. Today, we'll deal with the issues of the automatically triggered cuts that will go into effect if the necessary cuts are not specifically chosen.
The problem with the automatic triggers included is that the $1.5 Trillion in trigger cuts are set up to be split evenly between domestic spending and defense spending. That means $750 Billion, spread out over 10 years, goes right to our national defense. That translates into $75 Billion in cuts each year. That is A LOT for one department to deal with, especially considering That is out of a defense budget of about $660 Billion. (Note: Since there is no 2010 or 2011 Federal Budget, thanks to Obama and the Democrats, I have to use 2009 spending levels for these numbers.) It’s a pretty big cut, 11.3% in total.
Now I’m asked frequently by people I debate with why Conservatives consider defense spending to be untouchable. Please read this: It’s not untouchable, provided said cuts don’t harm our ability to protect ourselves. To quote one of my favorite movies, “We live in a world that has walls, and those walls have to be defended by men with guns.” It’s a true statement. Unfortunately, our nation cannot be defended in this world with a citizen militia. It’s simply not possible. To return to the John Locke foundation of government for a moment: Provision for a common defense is one of the primary purposes of government. So to mix in that much of the cuts into defense spending is irresponsible, especially considering that programs like Medicare and Social Security, which are causing far more deficits just by proportion, see so much less.
Let’s also consider the percentages $2.891 Trillion was the total Federal spending, discretionary and mandatory. A cut of $750 Billion per year out of that total is cutting just under 2.6% from the remaining budget. So this deal cuts 11.3% of defense spending, but only 2.6% of other spending? That is preposterous. Our problem is not military spending, despite the fact that liberals would have you believe that $100 Billion in spending on Iraq and Afghanistan per year and $130 Billion in tax cuts (no, I am not saying tax cuts cost money, I’m just explaining the fallacy in liberal rhetoric) explains $1.65 Trillion deficits. For those of you from Palm Beach County, FL, $230 Billion DOES NOT equal $1.65 Trillion. Liberals won’t tell you what costs the other $1.42 Trillion in deficits are from other spending.
It’s Liberalism 101: The only thing we can cut is defense, because liberal politicians will make rouge nations love us anyway (how’s that worked out). When half the cuts come from defense and the other half come from the rest of our domestic spending, that’s a bad policy. Yes, I believe some defense cuts are reasonable. $100 Billion or so is going to be cut automatically by the ending of Iraq and Afghanistan. I have heard soldiers tell me that the 1990s peace dividend was good for the military because it required them to become more fiscally responsible. But automatically cutting 11.3% of our military budget is a dangerous gambit, one that makes us less safe.
The problem with the automatic triggers included is that the $1.5 Trillion in trigger cuts are set up to be split evenly between domestic spending and defense spending. That means $750 Billion, spread out over 10 years, goes right to our national defense. That translates into $75 Billion in cuts each year. That is A LOT for one department to deal with, especially considering That is out of a defense budget of about $660 Billion. (Note: Since there is no 2010 or 2011 Federal Budget, thanks to Obama and the Democrats, I have to use 2009 spending levels for these numbers.) It’s a pretty big cut, 11.3% in total.
Now I’m asked frequently by people I debate with why Conservatives consider defense spending to be untouchable. Please read this: It’s not untouchable, provided said cuts don’t harm our ability to protect ourselves. To quote one of my favorite movies, “We live in a world that has walls, and those walls have to be defended by men with guns.” It’s a true statement. Unfortunately, our nation cannot be defended in this world with a citizen militia. It’s simply not possible. To return to the John Locke foundation of government for a moment: Provision for a common defense is one of the primary purposes of government. So to mix in that much of the cuts into defense spending is irresponsible, especially considering that programs like Medicare and Social Security, which are causing far more deficits just by proportion, see so much less.
Let’s also consider the percentages $2.891 Trillion was the total Federal spending, discretionary and mandatory. A cut of $750 Billion per year out of that total is cutting just under 2.6% from the remaining budget. So this deal cuts 11.3% of defense spending, but only 2.6% of other spending? That is preposterous. Our problem is not military spending, despite the fact that liberals would have you believe that $100 Billion in spending on Iraq and Afghanistan per year and $130 Billion in tax cuts (no, I am not saying tax cuts cost money, I’m just explaining the fallacy in liberal rhetoric) explains $1.65 Trillion deficits. For those of you from Palm Beach County, FL, $230 Billion DOES NOT equal $1.65 Trillion. Liberals won’t tell you what costs the other $1.42 Trillion in deficits are from other spending.
It’s Liberalism 101: The only thing we can cut is defense, because liberal politicians will make rouge nations love us anyway (how’s that worked out). When half the cuts come from defense and the other half come from the rest of our domestic spending, that’s a bad policy. Yes, I believe some defense cuts are reasonable. $100 Billion or so is going to be cut automatically by the ending of Iraq and Afghanistan. I have heard soldiers tell me that the 1990s peace dividend was good for the military because it required them to become more fiscally responsible. But automatically cutting 11.3% of our military budget is a dangerous gambit, one that makes us less safe.
Monday, August 8, 2011
Reactions to the Debt Limit Deal - By the Percentages
To my regular readers: I apologize that it has taken nearly a week for me to offer my response to the debt ceiling deal that was passed by Congress last week. As my notes on my “Treatise on Biblical Conservatism” that was posted last week stated, I was on vacation and unable to pen a response. However, the silver lining to this delay is the ability to see the reactions to the deal that happened in the past week and thus the ability to respond to them. Quite frankly, there is too much to deal with in one day’s posting, so we’re going to analyze this deal over the next few days.
Last week, Democrats and Republicans agreed to increase the nation’s debt limit by $2.1 Trillion in exchange for cuts in the amount of $2.5 Trillion. Since that deal was struck, there have been many, many commentaries on the deal. Nearly a week after the deal was signed; it’s time for a Biblical Conservatism reaction.
It’s an insufficient deal, pure and simple. Many of my fellow Conservatives are calling this a bad deal, and I’m forced to agree. It’s bad for America, because it failed to begin to deal with the real spending issues our nation is currently facing in any real way. Yes, there were $1 Trillion in immediate caps in spending, which are insufficient, but at least a positive step, and a demand for $1.5 Trillion to be cut in the following 10 years. On the surface, it seems like a start, albeit a very slow start.
Yet there are problems with this deal. Today, we’ll deal with the first issue, the deal by the percentages:
Let’s be generous and assume those cuts happen. After all, there is a provision in the deal that has been passed into law that requires those cuts to happen…so if the committee that has been created by the law does not enact those cuts, they will be automatically triggered. (There’s a huge issue with the nature of those triggers which we will discuss later.) We’ll also be generous to Congress and assume that the GOP will, at the very least, disallow any new spending by Obama and the Democrats, and thus we will assume that the 2011 spending levels (remember, there was no budget, thanks to Obama and the Democrats) will be maintained for the next ten years. So we’ll assume a $3.82 Trillion in expenditures annually and $2.17 Trillion in incoming revenue, meaning an annual deficit of $1.65 Trillion.
So, if we simply assume maintenance of those amounts, we’re staring down the barrel of $16.5 Trillion in new deficits (and thus new debt) in the next ten years. With the $2.5 Trillion in cuts spread across the next ten years, that’s a mere $250 Billion in cuts per year. It’s not very much. It leaves us with $1.4 Trillion in deficit spending each year. With the cuts included in the debt deal, we are down to a mere $14 Trillion in new deficit spending and thus new debt in the next 10 years. That means, with these cuts, we’re down to just under DOUBLING our debt in the next 10 years. That is not only unacceptable, it is absolutely irresponsible!
Liberals are guaranteed to try to tell you that we can make up that difference by, what else, taxing the rich, but friends, that is a lie. We cannot make up $1.4 Trillion in budget deficits by taxing the wealthy. It’s been said many times that if we were to confiscate every dollar earned over $250,000 per year and it would not make a dent in that deficit. It’s not going to make a difference.
Cutting a lousy $250 Billion each year is NOTHING. It’s not going to save this country from bankruptcy. Obama and the Democrats are not willing to make the cuts that need made. There is not enough money to keep programs like Social Security and Medicare alive for my generation. I’m paying social security taxes every paycheck, and I can basically guarantee that I will never see a dime of that money back, because right now Obama and the Democrats want to keep buying votes on the backs of the American taxpayer.
The Republicans aren’t getting off scot-free either. Speaker Boehner cut a deal that isn’t doing enough. I will grant them a bit more grace because I honestly believe a better deal would have happened with a Republican Senate and President. That being said, the GOP has a severe losers mentality. We are constantly on defense. Even though 2/3 of Americans supported the Cut, Cap and Balance plan, the GOP accepted this bad deal.
Americans are on our side, yet the Republican Party keeps acting like we have to eat the crumbs off the table. To be more specific, the old guard Republicans are used to accepting the crumbs off the table. I’ve had enough of it, and I know you have too. The Tea Party, on the other hand, has stood up for what was right and did their best to protect the American people.
I will continue to say that a third party is not the answer. A third party means Obama wins a second term. Ronald Reagan famously stated that what we need is not a third party, what we need is a revitalized second party. The Tea Party has business to conduct, no question. The place to conduct it is not going to be in the general election, but in the primaries.
Speaker Boehner needs to face a primary challenge, not because he isn’t Conservative enough…I believe in his heart he truly is a Conservative…but because he is a political coward. He’s afraid of the media saying mean things about him. He’s afraid to not be a part of the political elite. There are Conservatives in the House of Representatives who won’t cave. Paul Ryan is one. Another, if she doesn’t get the GOP nomination for President, anyway, is Michelle Bachmann. There are others as well.
Make no mistake about it, the answer is not for the Tea Party to become a third party. The answer is for the Tea Party to BECOME the Republican Party. Two election cycles at best, and we’ll be the GOP. That means no more bad debt deals, no more bad budget deals, no more political games. That, my friends, is the answer.
Tomorrow, we’ll continue discussing the debt deal by discussing the automatically triggered cuts that will go into effect if the bipartisan committee does not come up with the necessary cuts for the next ten years.
Last week, Democrats and Republicans agreed to increase the nation’s debt limit by $2.1 Trillion in exchange for cuts in the amount of $2.5 Trillion. Since that deal was struck, there have been many, many commentaries on the deal. Nearly a week after the deal was signed; it’s time for a Biblical Conservatism reaction.
It’s an insufficient deal, pure and simple. Many of my fellow Conservatives are calling this a bad deal, and I’m forced to agree. It’s bad for America, because it failed to begin to deal with the real spending issues our nation is currently facing in any real way. Yes, there were $1 Trillion in immediate caps in spending, which are insufficient, but at least a positive step, and a demand for $1.5 Trillion to be cut in the following 10 years. On the surface, it seems like a start, albeit a very slow start.
Yet there are problems with this deal. Today, we’ll deal with the first issue, the deal by the percentages:
Let’s be generous and assume those cuts happen. After all, there is a provision in the deal that has been passed into law that requires those cuts to happen…so if the committee that has been created by the law does not enact those cuts, they will be automatically triggered. (There’s a huge issue with the nature of those triggers which we will discuss later.) We’ll also be generous to Congress and assume that the GOP will, at the very least, disallow any new spending by Obama and the Democrats, and thus we will assume that the 2011 spending levels (remember, there was no budget, thanks to Obama and the Democrats) will be maintained for the next ten years. So we’ll assume a $3.82 Trillion in expenditures annually and $2.17 Trillion in incoming revenue, meaning an annual deficit of $1.65 Trillion.
So, if we simply assume maintenance of those amounts, we’re staring down the barrel of $16.5 Trillion in new deficits (and thus new debt) in the next ten years. With the $2.5 Trillion in cuts spread across the next ten years, that’s a mere $250 Billion in cuts per year. It’s not very much. It leaves us with $1.4 Trillion in deficit spending each year. With the cuts included in the debt deal, we are down to a mere $14 Trillion in new deficit spending and thus new debt in the next 10 years. That means, with these cuts, we’re down to just under DOUBLING our debt in the next 10 years. That is not only unacceptable, it is absolutely irresponsible!
Liberals are guaranteed to try to tell you that we can make up that difference by, what else, taxing the rich, but friends, that is a lie. We cannot make up $1.4 Trillion in budget deficits by taxing the wealthy. It’s been said many times that if we were to confiscate every dollar earned over $250,000 per year and it would not make a dent in that deficit. It’s not going to make a difference.
Cutting a lousy $250 Billion each year is NOTHING. It’s not going to save this country from bankruptcy. Obama and the Democrats are not willing to make the cuts that need made. There is not enough money to keep programs like Social Security and Medicare alive for my generation. I’m paying social security taxes every paycheck, and I can basically guarantee that I will never see a dime of that money back, because right now Obama and the Democrats want to keep buying votes on the backs of the American taxpayer.
The Republicans aren’t getting off scot-free either. Speaker Boehner cut a deal that isn’t doing enough. I will grant them a bit more grace because I honestly believe a better deal would have happened with a Republican Senate and President. That being said, the GOP has a severe losers mentality. We are constantly on defense. Even though 2/3 of Americans supported the Cut, Cap and Balance plan, the GOP accepted this bad deal.
Americans are on our side, yet the Republican Party keeps acting like we have to eat the crumbs off the table. To be more specific, the old guard Republicans are used to accepting the crumbs off the table. I’ve had enough of it, and I know you have too. The Tea Party, on the other hand, has stood up for what was right and did their best to protect the American people.
I will continue to say that a third party is not the answer. A third party means Obama wins a second term. Ronald Reagan famously stated that what we need is not a third party, what we need is a revitalized second party. The Tea Party has business to conduct, no question. The place to conduct it is not going to be in the general election, but in the primaries.
Speaker Boehner needs to face a primary challenge, not because he isn’t Conservative enough…I believe in his heart he truly is a Conservative…but because he is a political coward. He’s afraid of the media saying mean things about him. He’s afraid to not be a part of the political elite. There are Conservatives in the House of Representatives who won’t cave. Paul Ryan is one. Another, if she doesn’t get the GOP nomination for President, anyway, is Michelle Bachmann. There are others as well.
Make no mistake about it, the answer is not for the Tea Party to become a third party. The answer is for the Tea Party to BECOME the Republican Party. Two election cycles at best, and we’ll be the GOP. That means no more bad debt deals, no more bad budget deals, no more political games. That, my friends, is the answer.
Tomorrow, we’ll continue discussing the debt deal by discussing the automatically triggered cuts that will go into effect if the bipartisan committee does not come up with the necessary cuts for the next ten years.
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