President Obama announced a deal had been reached to raise the debt limit, but many of the details were still unclear and there were indications the proposal would meet opposition from both parties.
A compromise based on proposals that have been under discussion for weeks, the multi-step plan with a special committee and deadlines and “triggers” would raise the debt ceiling by more than $2 trillion — high enough so lawmakers likely won’t have to go through this exercise again until 2013.
AdvertisementThe plan also calls for $1 trillion in savings over 10 years as a first step. Then, a bipartisan committee of House and Senate members would be formed to make recommendations later this year for up to $2 trillion more in savings, including from Medicare.
If the special committee’s work didn’t lead to congressional approval of the additional savings, deep cuts would automatically be triggered, including ones to Medicare and the Pentagon. The trigger was designed to give ample incentive to both parties to make the committee process work, lest their most treasured programs be slashed.
The plan would not require that a balanced-budget amendment to the U.S. Constitution be passed, a provision passed by the House last week. That would ensure many Tea Party Republicans wouldn’t go for it; some conservatives were also reportedly unhappy about the defense-cut trigger.
Until the details of the deal are presented and threshed out, it will be unclear who won. Greg Sargent of the Washington Post says “it apppears the GOP is on the verge of pulling off a political victory that may be unprecedented in American history. Republicans may succeed in using the threat of a potential outcome that they themselves acknowledged would lead to national catastrophe as leverage to extract enormous concessions from Democrats, without giving up anything of any significance in return.” Sargent argued the GOP could hold out longer because the Democrats needed the money more.
Under the emerging deal, President Obama can hike the debt limit in two stages — the first in exchange for equivalent cuts; the second after a Congressional committee comes up with second round of yet more cuts, including to entitlements. The talks appear close to resolving the spending cut “trigger” that would force the committee to act — without giving the GOP an incentive to deliberately sabotage its work. The remaining question is how to get it through the House. But a deal seems immiment.
Again and again, Dems drew lines in the sand that they promptly erased as the threat of default grew. A clean debt ceiling hike? Dropped. Cuts to Medicare benefits? They’ll likely be in that committee’s crosshairs. The insistence on revenue hikes? Withdrawn.
What make this all the more remarkable is that throughout this process, Republicans themselves conceded not just that a debt ceiling hike would be disastrous for America, but also that it was inevitable. Yet they were still able to use the threat of default as leverage. How?
The simple answer: Dems weren’t prepared to allow default — no matter what. Republicans, by contrast, treated the debt ceiling hike as a necessity, but one that had to happen on their terms.
But just because something is touted as a victory doesn’t mean that it is. If the Republicans are determined to give away the store, the leadership would present it as a good deal. But Scribd has the text of John Boehner’s summary of the deal, the bullet points of which are reproduced below. The readers can judge for themselves, from the documentation available, who “won” the negotiations.
TWO-STEP APPROACH TOHOLD PRESIDENT OBAMA ACCOUNTABLE
Emerging framework has three main features:
- (1)cuts government spending more than it increases the debt limit;
- (2)implements spending caps to restrain future spending;
- (3) advances the cause of a Balanced Budget Amendment Framework accomplishes this without tax hikes, which would destroy jobs, while preventing a job-killing national default.
A. NO TAX HIKES
- Same as House-passed bill, the framework includes no tax hikes.
- Requires baseline to be current law, effectively making it impossible for Joint Committee to increase taxes.
B. CUTS THAT EXCEED THE DEBT HIKE
- Same as House-passed bill, framework includes spending cuts that exceed the amount of the increased debt authority granted to POTUS.
- Would cut & cap discretionary spending immediately, saving $917B over10 years (certified by CBO) & raise the debt ceiling by less – $900B – to approximately February.
- Before debt ceiling can be raised, Congress and the president must enact spending cuts of a larger amount first.
C. CAPS TO CONTROL FUTURE SPENDING
- As in House-passed bill, framework imposes spending caps that would set clear limits on future spending & serve as barrier against gov’t expansion while economy grows.
- Failure to remain below these caps triggers automatic across-the-board cuts (“sequestration”).
- Same mechanism used in 1997 Balanced Budget Agreement.
D. BALANCED BUDGET AMENDMENT
- Same as House-passed bill, framework requires both House & Senate to vote on a BBAafter Oct. 1, 2011 but before the end of year.
- Similar to House-passed bill, framework authorizes POTUS to request second tranche of debt limit increase of $1.5T if:
- Joint Committee cuts spending by greater amount than the requested debt limit hike,OR
- A Balanced Budget Amendment is sent to the states.
- Creates incentive for previous opponents of a BBA to now support it.
E. ENTITLEMENT REFORMS & SAVINGS
- Same as House-passed bill, framework creates a 12-member Joint Committee required to report legislation by November 23, 2011 that would produce aproposal to reduce the deficit by at least $1.5T over 10 years.
Each chamber would consider Joint Committee proposal on an up-or-down basis without any amendments by December 23, 2011.- If Joint Committee’s proposal is enacted OR if a Balanced Budget Amendment issent to the states, POTUS would be authorized to request a debt limit increase of$1.5T.
F. ENTITLEMENT REFORMS & SAVINGS
- Sets up a new sequestration process to cut spending across-the-board – and ensure that any debt limitincrease is met with greater spending cuts – IF Joint Committee fails to achieve at least $1.2T in deficit reduction.
- If this happens, POTUS may request up to $1.2T for a debt limit increase, and if granted, then across-the-board spending cuts would result that would equal the difference between $1.2T and the deficit reduction enacted as a result of Joint Committee.
- Across-the-board spending cuts would apply to FYs 2013-2021, and apply to both mandatory & discretionary programs.
- Total reductions would be equally split between defense and non-defense programs.
- Across-the-boardcuts would also apply to Medicare.
- Other programs, including Social Security, Medicaid, veterans, andcivil & military pay, would be exempt.
- Sequestration process is designed to guarantee that Congress acts on the Joint Committee’s legislation to cut spending.
Several items deserve closer inspection. The first and most important is whether Boehner’s claims of “no taxes” and “real savings” are true. The second and arguably more important is how the debt deal affects the relative power relationship between the movement which seeks to reduce the size of government to a manageable and affordable level or whether it simply provides a speedbump on the way to an even larger socialistic state.
Assuming the cuts and the lack of tax hikes are real, the question is why, as Sargent says, Obama lost when he had the Senate, the White House and the media at his back. One possibility is that he ceded the initiative early on to the GOP. He never had a plan, simply the belief that he could force the GOP to surrender on his terms by threatening a government shutdown. If, as Sargent says, the president eventually realized that his political opponents had a greater will to run the risk than it would knock the floor out from under him.
But the devil is in the details and it will be interesting to see which side fared better in the standoff.
Is the "deal" as described a victory for smaller government or smoke and mirrors?
- Smoke and Mirrors (59%, 439 Votes)
- Unclear. Let us wait and see (35%, 259 Votes)
- Victory for smaller government (6%, 51 Votes)
Total Voters: 747
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As I understand it, these are “cuts” to future projected budgets, not actual cuts from the last actual budget. Smoke nd mirrors.
Giving authority to a “bipartisan committee” is an abdication of teh responsibility of each house and senate member. It gives those few members very concentrated “pork power” and diciplinary power overthe independence of other members. Those elite selected members of this (what should be unconstitutional) small concentrated committee will become very rich. It is easy to focus bribes on just a few people, than to “lobby” the entire congress.
http://pajamasmedia.com/richardfernandez/comment/168589/
Per the subject of this comment from the previous re: Rick Perry, I hope even if Perry doesn’t listen to some of his own political appointees in Texas, the Hartman Plan might be something L3 would like, and I suspect L3′s people know some of Perry’s people through Houston connections.
Like Greece, there is no way the U.S. can ever hope to balance budgets through austerity alone — not at 22% real unemployment, and probably not at 10% UE. We’ve got to focus on the revenue side as well, and that means exporting more oil and gas and producing more GDP HERE and keeping it here.
It’s a terrible deal. If Moody’s and S&P meant what they said, a downgrade for Uncle Sam is near.
This is probably the best deal could have been expected.
I think the Republicans get more credit for it than Dems – that seems to be the spin on the TV, except for the knee-jerk sycophants, and even some of those.
But, does it matter? Nope. I guess it’s a “good thing” to kick the can down the road as long as possible, and at best that’s all this does. Bernanke can try to work his voodoo for another 18 months.
Energy independence. Return 10,000,000 manufacturing jobs from China. Or none of this matters.
If left to their own devices the Donks would call for slashing Defense and offer a cosmetic haircut to Medicare in the future for the GOP to hang itself with. They would do so knowing that they had a massive campaign ready to pop in the media microwave to get Medicare restored. I’m surprised they didn’t name this the “Peace and Unicorns but the GOP wants to take Grandma’s Walker away Act of 2011.” A few threads ago I accused Obama of not even offering old rope for his trillions. Well here he has taken his trillions again and produced the rope for the GOP to hang itself with. What can we go to the voters with? The Democratic foot soldiers will be well greased, the Democratic corporate cronies will be fully lubricated, the Democratic foreign allies will be unimpeded by an enfeebled America. The Republicans will get a vote on an Amendment that Harry Reid will stuff in the oubliette.
We need a bill ordering the POTUS in the event of no rise in the Debt Limit to follow a list of priorities.
1. Debt interest
2. Military pay
3. Contracted military operating expenses
4. Social Security
5. Military pensions
6. Civilian pay from DOD DOS Treas DHS & Justice
7. Military procurement contracts
8. All other Fed civilian pay
9. Medicaid reimbursement
10. Federal civilian pensions
11. Medicare reimbursement
12. Other domestic contracted expenditures
13. Other overseas contracted expenditures
14. Foreign Aid.
Failure to adhere to this schedule would be grounds for Impeachment and/or the prosecution of any officer found in violation.
It’s probably the best that could have been expected with Barack “High Speed Train to Boondoggle” Obama and Harry “Never Met A Spending Bill I Didn’t Like” Reid controlling 2/3 of the process. We have to elect someone with at LEAST half a brain president in 2012 as well as a bunch of senators who can count or else start stocking up on wheelbarrows to use as wallets when the currency fails.
I thought for sure it would get pushed past the August 2nd deadline, if only to see who could take the heat and who couldn’t.
Obama couldn’t take the heat – he folded. Look how pissed Sargent is, and you know Obama folded his cards. He doesn’t have the nerve to stand and fight – he never did.
That’s his weakness – we’ve suspected, but now we know. He doesn’t have the stomach for a real fight. Once you know a man’s weakness, you’ve got him.
I think he’s calling ‘compromise’ where there is none. No bill has been passed in both houses of congress, house and senate, and further signed by the executive office. This committee business sounds so extra-constitutional as to be an outrage. BHO and democrat party are telling us that spending will only go up 4 trillion instead of 7 trillion, or some such. I don’t expect there to be any reductions in spending at this moment in time, and have no illusions about that happening att, given the kind of accounting tricks that will be in play. What I want is debt ceiling increases to be forced to come up every three months or so to keep this issue of spending and raised debt ceiling in the conversation and an issue going into the election year.
Since there is no bill, passed and signed by the executive office, he’s hoping the perception will be that republicans balked at a, “the deal” he outlined and has said was “agreed on” out of (his) pure fantasy. In other words, he’s counting on people’s being uninformed about proper congressional procedure and process, and public opinion will be malleable by his loyal minions in the press. Methinks the Ponzi Prince doth miscalculate.
The only bright spot is the Republicans didn’t give up real, immediate tax increases for dubious, future spending cuts. It looks heavy on defense cuts, which were going to happen anyway. Taxes go up and down; defense spending goes up and down (which is why a career in STEM has been insecure.) Non-discretionary defense spending *never* goes down.
THE GRASSHOPPERS AND THE ANTS
The conservative members of the GOP, read Tea Party, understand that small victories lead to larger victories. The conservatives did not crumble, they held their ground, and they accomplished something. The public, and more importantly, independent voters, know who are the grasshoppers and who the ants.
Grasshoppers sure are cheerful fellows
They play all summer long
The ant, meanwhile, stores for the winter
They hear grasshopper’s song
And chide them for their leisured lifestyle
At which grasshoppers smirk
And tell the ants that only fools and
Ants do all the work
That’s where we are now in this country
With grasshoppers in charge
Believing summer’s never ending
And no debt is too large
But down below the grassy surface
The ants are stirring now
And taking aim at the grasshoppers
And pledging that their vow
Is smaller government that listens
To what the Founders said
They know that soon, at next election
The grasshopper is dead
This puts us on the path to be $22.5 trillion in debt by 2020 or 2021, instead of $25 trillion in debt. I doubt that there is enough money on the planet to buy our bonds at that rate.
Question: If the baseline is current law, does that cook the expiration of the “Bush tax cuts” into the cake? This would be a tax increase, regardless of what Boehner tells us.
One last point, an absolute freeze on spending (no increase even for inflation) would provide $9 trillion in “cuts”. The problem is the baseline. Now we have enshrined it as budgetary law.
Republicans got more than they gave up but devil is in some of the details. Obama and the Dems could not “sell” the idea of a clean debt ceiling increase nor the idea of tax hikes in the middle of an election despite having the White House, Senate, and MSM. The prof of that was Obama’s plummeting poll numbers. In the end this bill probably does little to curb the deficit but there was never much chance that it would. Under the circumstances a little is a lot and it does it without tax increases.
now Obama owns the economy, the unemployment, the huge deficits, five wars, all of it completely, all of it his and he has saddled House and Senate democrats with these failures as well. Tuesday he will jet off to his big birthday bash and go on vacation to the Vineyard. We will see if his poll numbers or the economy recover. I doubt it. my guess is we are already in a double dip and that when the Q2 numbers eventually get revised they will be negative.
“high enough so lawmakers likely won’t have to go through this exercise again until 2013.”
They hope. it is based on the current economy and if it tanks the new scheduled crisis will be re-scheduled for a closer date.
There is a major misunderstanding going on here.
Tea Party is an interest group, Not a political party.
Political parties have agendas and function by trading items from their agenda. The (D)’s give the (R)’s something they want in return for something the (D)’s want. They then call it compromise and claim to be making ‘progress’
Interest groups that play that game end up like a puppy that played bumper tag on the expressway. Take the Anit-war groups( someplace far away, please). They tried compromise and now they are a whinney bunch of fools ignored by everyone.
So long as the Tea Party remains focused on reducing government spending they cannot lose.
Government default? GOOD, the feds can’t spend money nobody will lend them. Bond rating downgraded? GOOD. See above about if it’s harder to get money, there will be less borrowed. Government collapses? Good. If there is no government they can’t spend money. This is a win-win for most of Americans. Percenters ( anybody that derives income from a percentage of another’s labor) will get screwed but they have been screwing everybody for ages it’s only fair that they get a turn over the barrel.
Was it Judges were Samson took down the Temple? The establishment needs to know that it’s over.
They either stop with the deficit spending or the Temple comes down. Since deficit spending will destroy everything eventually, Destroying it now allows the rebuilding to start sooner and puts the hurt on the Bathtards that did this.
Did anyone else met “workfare” participants when that was in broad use? I spoke to several at the time, and they welcomed the opportunity to increase job skills. This time public service union opposition would be a pushover.
You might be interested in William Hutt’s “Idle Resources” economic theories.
http://en.wikipedia.org/wiki/William_Harold_Hutt
W – You left out option #4:
A victory for big government.
(it lives to prey another day)
The “perception” is that there are no tax increases in the bill presented. The Obama base will scream like banshees over that perception. It will be viewed as a Republican “win” by a lot of parties and interests. The question will be how much clout will the perceived win have for the Republican house over the upcoming battles for deregulation, reigning in the EPA for example?
Also there is the overseas economies to consider, Most are facing increases in taxation on falling GDP’s or at least stagnant ones. As Ambrose Price Richard says in the Telegraph, “The US is wounded the Euro is dying.” Will money now flow to a “perceived” safe haven in the US?
If the sturm and drang fades over the debt ceiling will operation Fast and Stupid come to the fore, now that the AP is reporting on it?
Biden 2011?
1) A $2+ Trillion increase in the Debt Ceiling, which means that Obama will not have to worry about the issue coming up again before any putative elections in 2012. That implies QE3 is definitely on; so the Federal Reserve prints more money to buy the T-Bills to finance a) the government manipulation of the stock market, and b) payoffs to Obama’s criminal gang, and c) financing his re-election through devious means. One hell of a campaign pot. I have some Confederate dollars that may have more value than the US dollar when they are done, because there is collectors interest in the Confederate money.
2) $1 Trillion in cuts identified fairly immediately, but assuredly in the out years.
3) The “Super Congress” to identify $1-2 Trillion in further cuts for the future within a time limit. If they fail to do so, in theory an across the board cut in all spending [with the exceptions noted] will take place. What do you want to bet that any cut will not be applied evenly across the board in reality.
4) Somewhere in there, a Balanced Budget Amendment is to be drafted and sent to the states as an alternative, if there is a failure of the “Super Congress” to identify and the “Lesser Congress” to pass the cuts noted above. Note the “OR”
It may be because a) I am not a nice person, b) even before spending my working life amongst felons, sociopaths, and bloody idiots [both criminals and politicians] I was a cynical bugger, and c) I have seen the Institutional Republicans fight hard only when they were pulling defeat from the jaws of victory. There are addiction problems involved. The Political Class of both parties are addicted to spending money we don’t have, and the Institutional Republicans are addicted to Democrat promises of handfuls of “magic beans”, for which they will trade anything.
I expect the situation to shake out:
1) Obama gets what he wants [Debt Limit increase], irrevocably, immediately.
2) After #1, a) what downside is there for the Democrats not to renege on the cuts completely? It is not like once the money is spent, that they can revoke the increase. b) What do you want to bet that if any cuts are offered at all, they will all be in the far “out years” and therefore never happen?, and c) one key thing to look for is which specific baseline budget are they using? Both sides up till now had Obamacare baked into all the long term budget baselines. The Democrats and Mitch McConnell’s plan had Obama’s budget figures that the Senate rejected 97-0 as being too far out even for the Democrats to accept “deemed” as the baseline. Or are they using the House budget the Democrats will not vote on in the Senate? Which they use is critical. I have a feeling we are going to be craving strong drink when we find out these details.
Remember Boehner’s recent history in negotiating budget cuts against the Democrats, where baselines were used to first claim “real” cuts, then it was found that the cuts were far, far less, finally ending up a paltry few million out of a multi-trillion budget, and spending would have to increase for 5 years before the chimerical cuts would take effect. This is not the first rodeo we have seen him in. On Budget matters he has two strikes. We need to see him actually win something major [in fact, not just in claims] before he can be trusted not to leave the pooch walking bowlegged as a matter of course.
3) If they follow the McConnell surrender plan which originated the idea; the “Super Congress” will consist of 6 members from each House, divided evenly by party. They will be pretty much guaranteed to be from either super-safe seats where they cannot ever be ousted, which for the Democrats means from their most Moonbat fringe [picture Sheila Jackson Lee in the "Super Congress"] or Senators who will not be touchable for 4-6 years; or those who already are out one way or another. The Democrats will send their crazies. The Institutional Republicans will send their own, and probably one or more DIABLO’s or RINO’s [picture John McCain reaching across the aisle, or Murkowski, Collins, Brown, Snowe, Hutchinson, or Cornyn] to “balance” the presence of any TEA Party members or Conservatives the may be appointed from either House [and you CAN bet that there will be attempts to keep them out completely]. All it takes is a one vote majority in the “Super Congress” to let the Democrats rewrite the budget forever. Remember, it was one of the Maine Twins whose vote kept Obamacare from being bottled up in Committee forever; because she did not want to offend the Democrats by voting against them. If they are still following the McConnell surrender plan, it will be a straight up or down Congressional vote on anything they come up with, with no amendments in either House allowed. And I can see the Institutionals whipping the vote in order to preserve their own “credibility” with the Democrats, regardless of where the cuts fall.
4) Who drafts the BBA? If it ends up not restricting spending, but mandating tax increases to cover any spending, we are scrod. Or it could be toothless completely to give cover to both sides. Remember, all they have to do is send something with Balanced Budget Amendment in the title to the states.
Reagan had the saying, “Trust, but verify.”. Democrats cannot be trusted ever, and the Institutionals require at least as much wariness as the Soviets did, and maybe more.
Subotai Bahadur
Anytime I see a liberal rag which declares the GOP “won,” then you know the GOP lost. No matter how pissed Sargent appeared in this article, experience should tell us that nothing which leaves their keyboards is ever benign.
Are the ‘cuts’ in this deal absolute reductions in current spending – or does ‘cut’ merely mean that future spending increases will be lower than currently planned?
First I want to comment on how much the psychological mechanism of projection has been at work in this mess. For example, Harry Reid complains that the evil Republicans won’t allow his bill to come to the floor only minutes after he engineered that the Boehner bill would be tabled. This has happened over and over again. It is painful to watch it on TV, as politicians and commentators accuse the other side of doing exactly what they themselves just did.
As to the substance, this is very weak cheese. Keith Hennessey pointed out what I had been struggling to formulate for weeks. Namely, there is a difference between a liquidity crisis — we don’t have the cash flow today — and a solvency crisis — we are headed toward eventual bankruptcy. By drawing all eyes to the liquidity crisis Obama and the MSM have succeeded in turning attention from the real solvency problem. Folks on this blog have not been fooled and have been pointing out that reducing the debt in 2021 to a mere $22 Trillion instead of a worse $25 trillion is not very impressive. And that assumes that the cuts will really come.
Of course we all know, but the MSM obscures so the public will not notice, that the “cuts” are not really cuts at all but are simply smaller increases than might otherwise have gone into effect. We need REAL cuts not just reduction of the acceleration of increases.
The Dems will make sure that the select committee will stalemate. Who then will make the decision? An algorithm? Geitner? Magic? And I know everyone here noticed that the cuts themselves do not begin until 2013, just when the Bush tax cuts expire.
So we have given the heroin addict just enough heroin and methadone to tide him over until the election with the promise that he will go into rehab the following year — maybe.
I am drawn more and more to the conviction that the downgrading of America’s credit rating and the consequent fall of the economy is either a side-effect that is acceptable to the administration or perhaps part of their strategic plan. I have always had contempt for conspiracy theories. But it is harder and harder not to conclude that the decline of the United States was the real agenda of the 2008 election.
Tick, tick, tick….
batman @ 20 said:
“… there is a difference between a liquidity crisis — we don’t have the cash flow today — and a solvency crisis — we are headed toward eventual bankruptcy. By drawing all eyes to the liquidity crisis Obama and the MSM have succeeded in turning attention from the real solvency problem. Folks on this blog have not been fooled and have been pointing out that reducing the debt in 2021 to a mere $22 Trillion instead of a worse $25 trillion is not very impressive. And that assumes that the cuts will really come.”
The politicians behavior confuses me. Except for the TEA party, the politicians seem to be focused on the liquidity crisis and ignoring the solvency problem. I guess they are assuming that they’ll be out of office before the solvency problem explodes. An alternative explanation is the people on the inside have concluded that the solvency problem is intractable and only the liquidity crisis is actionable. If that explanation is true then why hasn’t the United States’ credit rating been down graded? Maybe the politicians have concluded that money printing will solve the solvency problem? Is it possible that they’re that stupid?
The liquidity process is (supposedly) immediate, the solvency crisis (supposedly) has a year or two to go. If Paul Krugman has his way, the answer to both is MORE spending, not less, in fact more DEBT and not less. Where has Mr. Krugman been keeping himself?
The “triggered” 50% cuts from the Pentagon – could not happen. Is it moral or ethical to vote for a bill containing that clause?
I had said no deal before Xmas. Well, this hasn’t passed yet.
“We got a Deal”.
Just who is We here?
There ain’t no we,/i> and there ain’t no deal
20. batman
I myself, hate conspiracy theories and those that promote them are scalawags of the worst sort.
However your very reasonable and cogent analysis tends me to my redoubt to consider…some of the obvious facts.
But I have concluded that president Obama is a man of the most high moral character, well-intentioned and generous, who honestly and forthrightly explained to Pastor Rick Warren that such things like when human life begins, or that silly knowledge of economics, or the very basic tenents of leadership and comity, are simply low level slices of Americana better left to the knuckle-dragging Neanderthals who cling to their firearms, go to church, hunt, or value the concept of the American family.
He, on the other hand, is better left plotting his vision of what the “new” America ought to look like.
You know, the one with peasants, pitchforks, a one-child policy and the spectre of 1.0 GDP growth per annum.
Spend Now!
Cut Later! (But not really cut, just don’t grow as much.)
Deja` Vu all over again!
Once again we have been screwed now in exchange for promises of what is to come tomorrow, and tomorrow of course never comes. It would have been far better to let it all pass and put teh Won in the position of deciding who wasn’t going to get their checks. Do we give the leftover cash to the bureaucrats at HUD or HSS? Make Obama make the decision as to which of his supporters don’t get their paychecks.
Instead we have the same old pattern that got us into this mess to begin with replayed yet again. The smoke is thin and the mirror is cracked, but the drooling rubes still see it as magic. How sad.
Let’s Go For Broke! Default Now!
Debt default seems academic at this point what with the announcement out of Washington Sunday night that a tentative deal had been brokered on the debt ceiling. However, the operative word there is “tentative.”
With reservations, Senate Majority Leader Reid likes it, which could and should be the kiss of death in the House. Speaker Boehner is ambivalent but believes it’s in line with GOP principles although, as a RINO, his view of those principles don’t jibe with conservative principles. House Democrat Minority Leader Pelosi isn’t sure what she thinks and will probably wait until the deal is consummated before reading it. Senate Minority Leader Mitch McConnell greased the skids for the agreement but can easily wash off the grease if it goes badly.
In sum, the vaunted deal will not become a done deal until the overweight lady sings her approbation and shouldn’t be approved since the so-called compromise accomplishes nothing substantive aside from authorizing the president to tack on a few more trillion to the federal debt.
Balanced budget? They’ll work on it. Cuts in spending? Piddling, but they’ll work on that too and appoint another toothless commission to study them. Re-structuring Medicare, Medicaid, Social Security, the most crushing crises facing America? Not even on the table.
Barring a temporary debt ceiling hike postponing the inevitable, what if America defaults Monday night at 11:59:59 p.m.?
That scenario is now unlikely since the party in favor of fiscal sanity has once again compromised and the party favoring taxing and spending the United States into financial oblivion seems about to get its way, once again, but, just for the jollies, what if we do default?
Who would be held responsible? What would be the effects of a default? Who would emerge the winner and who the goat? . . .
(Read more at http://www.genelalor.com/blog1/?p=5143)
Basic principle – keep it simple. The greater the complexity, the more important the fine print becomes. As a rule, the fine print of any agreement favors Obama.
Watch the triggers, because they are the “best alternative to a negotiated agreement” against which any future negotiations will be measured.
Sorry to be off-thread but just stumbled on an idea that I’m going to follow up on and thought it might be of interest to many readers. It’s called a Sticky Notes campaign. See this thread for examples:
http://atlasshrugs2000.typepad.com/atlas_shrugs/2011/04/a-great-idea.html
coming soon, the new “Pride in Uncle Sam” bonds. These so-called PUNKS bonds will be issued to you with a small nominal premium to net current value of your retirement accounts and other tangible non-depreciable assets. These 100 year maturity bonds will pay .025 simple interest and will be underwritten by Goldman Sachs of Singapore, will be denominated in the new USA currency the Amero, and will have a ‘call’ feature wherein criminal behavior causes revocation and reversion to the Goldman Sachs/Singapore treasury. Government services will be exclusively federal police and migration marshals to aid population transfers to the new Chinese so-called ‘ghost cities’ of the high desert plateau of outer Mongolia.
Buddy,
PUNK bonds sound like the new Red Dawn movie. You know, where the Russians are the half-willing sidekicks of the Chi…er, North Korean invaders, who came to collect on their ‘debt’. Not sure how they re-cut the film to get around that little plot item.
Incidentally, the Aussies already did their version of Chinese dawn, only with Wretchard’s fellow Aussie-Filipinos playing the ChiCom soldiery.
Oz makes the best movies in the world –must be something about the vast empty interior –they grow up with the cinematic eye –
Should have been a series of debt ceiling increases in 100 billion increments. 100 billion in debt increase for a 100 billion in spending decreases. In a year’s time we’d have a balanced budget. Make the Dems walk the plank every month. 2.5 trillion increase in the debt ceiling, and maybe, just maybe 1 trillion in cuts in the future? Seems to me the Republicans got rolled again. Not happy in the least over this.
Well it is starting to look like maybe Obama jumped the gun on a deal being made. The 70 member far left “progressive” caucus is balking because there are no tax increases in it, the trigger that causes automatic cuts in defense spending is regarded as too risky by too many on the right. Going to be a busy day on August 1.
The RINO’s have found out that it is hard to threaten the tea party congress critters. They tried the threat of holding up campaign funds and were told “We didn’t use all that much money anyway, we were sent into office by feet on the ground people who put us here to reign in spending. Opposition from you will actually aid us in coming back, and on top of that a lot of us ran against candidates that you had put up in the primaries.”
“The 70 member far left “progressive” caucus is balking because there are no tax increases in it.”
It looks like the Tea Party caucus is crawfishing because the spending cuts are not real.
Since the bonds are getting downgraded regardless, there is no reason for anyone to vote for this bit of Kabuki Theatre.
With any luck the government will collapse. That will save tons of money and the sheeple will learn first hand that they don’t need no stinking feds.
Dear Dr. Bones,
For a bracin’ breath of fresh cold air straight from Barbary, I recommend peanut-gallery Peanut #35@201108010221:
“With any luck, the governement will collapse.”
Don Ricardito de Fernández y Podhòretz cannot itself take so bold a line, for its Party Paymasters undoubtedly want *some* sort of Fedguv to survive, so as to further enrich those at home who truly deserve enrichment an’ to keep up all those nifty schemes of Native Management overseas.
Happy days.
–JHM
No deal is a reasonable deal unless the cuts are real and immediate: cut $900 billion from 2011-2012 spending; then raise the debt limit a like amount.
Baseline budgeting has to be abolished: no more built in increases (especially at the absurdly high rates of today ~7-8%) from which phony cuts can be made.
Next year’s baseline should be last year’s actual spending or budget, whichever is less.
If this deal won’t avoid a downgrade, just say “No”.
And, if this passes and Obama’s bacon is saved, this will be the end of the Republican Party.
Any time the Statist Media comes out and starts having the main talking point be that how the GOP really won this time, you have to wonder about a deal.
I say since it doesn’t really accomplish what is needed vote it down and make the hacks come back for another bite of the apple. The debt downgrade is already unavoidable, thanks to the Democrats incredible spending spree and the “default” was always a phoney issue.
One trillion (over 10 years) in cuts is 1/15 of the debt. That might be back-loaded toward the end of the decade, i.e. take effect a few election cycles later. Meanwhile inflation creeps up, though not acknowledged in the official numbers…
Never mind. I give up.
5. Blast From the Past – This is a great idea. Only better is to tie the debt limit to a percentage of GDP and never have these political (only) crapshoots again.
O’s ceiling from the floor.
O’Floor Flusher and the “experts”.
…-
“Homeless hell in America’s Midwest as thousands of middle-class families are forced to bunker down on mattresses as economic crisis bites”
“People are spending all their benefits on having a motel room for a third of the month”
“Experts say that these families are from ‘the boom suburbs that have now gone bust’”
“Tough times: This shelter in Albuquerque, New Mexico, is packed with middle-class families who have lost their homes”
http://i.dailymail.co.uk/i/pix/2011/07/29/article-2020265-0D37A2A100000578-267_634x428.jpg
http://www.dailymail.co.uk/news/article-2020265/Homeless-hell-Americas-Midwest-thousands-middle-class-families-forced-bunker-mattresses-economic-crisis-bites.html
Posted by: macd at August 1, 2011 7:26 AM
O*’narcisist’s “sole legacy”:
“Democrats tearing their hair out in frustration.”
“*This is his sole legacy: a massive post-traumatic stress disorder.”
“*The “small people”, the “rank and file”, the “loyal soldiers” of the narcissist – his flock, his nation, his employees – they pay the price.”
…-
“What now for Obama? President looks weak after being held to ransom by Tea Party Republicans”
“Such a move has been typical of Mr Obama’s handling of the crisis which he has left many Democrats tearing their hair out in frustration.
They have also been horrified that he has lurched so far to the right – the bipartisan committee looking at the national debt will have ‘everything on the table’, the President admitted.
This opens the door to brutal cuts in Medicare, Medicaid and Social Security, programmes which are dear to the hearts of liberals.”
http://www.freerepublic.com/focus/f-news/2756850/posts
…-
*O’narcissist:
“The “small people”, the “rank and file”, the “loyal soldiers” of the narcissist – his flock, his nation, his employees – they pay the price. The disillusionment and disenchantment are agonizing. The process of reconstruction, of rising from the ashes, of overcoming the trauma of having been deceived, exploited and manipulated – is drawn-out. It is difficult to trust again, to have faith, to love, to be led, to collaborate. Feelings of shame and guilt engulf the erstwhile followers of the narcissist. This is his sole legacy: a massive post-traumatic stress disorder.”
http://www.globalpolitician.com/25109-barack-obama-elections
If we could raise growth to a mere 4% (or 400% from where we are), we could grow our way to a normal deficit of around 2 or 3% of GDP –or put another way cut by two thirds our current deficit to GDP ratio.
The problem is, this bunch in our exec branch will not let us do it. If you doubt that they are following the Lenin ”worse is better” dictum, simply observe EPA’s two year jumpback on the carbon allowable that had been scheduled to go into effect in 2013. Probably because we stubbornly won’t collapse, the new rule start date has been pulled in. It calls for lowering carbon (AKA ‘plant food’, AKA ‘human & animal food multiplier’) ppm from current 75 to 60-70, will cost biz about $90 bbl/yr and add a dollar to a gallon of gasoline, further destructing the life liberty and pursuit of the rural states of the south and west, whose folk need to drive a lot to make a living.
This is cap n trade lite, which congress would not pass, so the EPA will simply do it to us.
So, by that example you may see, Obama’s forces still have plenty of time to wreck us badly enough that we’ll need a very long time to recover, assuming no foreign power relieves us of our sovereignty in the interim.
***
With that in mind, an alternative plan might be to simply defy the government –defy the EPA. We’d have to do it altogether on cue, or be defeated in detail. This would not have to collapse the govt –it would simply be a strike in front of collective bargaining, with the 57 states as the collective.
Meanwhile, lets face the fact of the undervalued Yuan and the enormous intellectual property theft of the western patrimony, and simply declare the debt to China paid in full, and then embargo further trade with this nation we all know intends to make war on us anyway, as soon as we are weak enough.
If they raise hell, maybe our military could sort of detach itself from the exec branch for a few weeks or months (hell, they could apologize later, and the White House would have to accept the apology), and sink the Chinese navy, now while we can. If they want nuclear war, they have about 50 warheads and we have 1500, lets just do it, launch on them. If we lose 50 cities over here, well, jobs for everybody for a hundred years, rebuilding. Loss of life? Yep, but that’s really only a problem if it’s your own or your loved ones, so, dig a shelter, now while you can.
Everything we are now buying from them, we would have to start producing ourselves.
Bingo, back in the saddle again!
Anyway, it might seem an extreme plan, but it would neatly outflank the near enemy, the Democrats.
Pelosi was rightly excoriated when she squealed that we needed to pass ObamaCare to find out what’s in it. The spending limit compromise is designed such that we won’t know what’s in it even after it’s passed.
We do know what the future holds though, so let’s default now and get on with life
MSO, get Mad Fiddler or Agoraphic Plumber (argh, one or the other) to tell you what his friend found when he tried to read the bill. It was intentionally blended to where every page needed to refer to multiple other pages, without links to them. For starters. And there were other booby traps.
Recall too that the pubs needed to call in all the readers that would fit in a room, as they had to be physically together to break it up and try to read it before the vote. And just read it –no time to prepare any sort of document with any sort of analysis.
And now such a cheap trick is bidding to fundamentally overturn the way the country does business with itself –and what it costs to live in the USA, and what damage the bill will do to quality of medicine and burden on practitioners. We the people are bound by the thin skein of arguable legality to tolerate such a dirty low down polecat trick, totally unwarranted, undeserved, and at odds with tradition, precedent, ethics, and the will of the people.
Always, these people are able to find the key to how to do the most demoralizing damage in the greatest area with the least amount of effective reaction.
Hooray! We are borrowing more money to avoid defaulting on our debts, while committing to unspecified difficult choices in the future! That makes so much more sense than reducing spending to what we can afford! I am relieved, knowing that the our sensible, smart government officials are on the ball!
Why is it the “cuts” are always the in the dollar amount that go to recipients, and never in the OVERHEAD costs (like salary and Bennies)of the millions of overpaid criminal moochers in all levels of the government?
Afterall, I do believe at some point youve “earned enough (taxpayers) money”
When the teachers in my district average 100K per year, and the median salary for citizens is 45K, its hard to believe the only government “belt tightening” that can be found is in Grandma SS or medicare payments, and not in overhead costs.
Lets be serious, they need FEDERAL “stimulus” money fund LOCAL government workers at current levels… Local Governments are unsustainable, and its employees are driving Federal debt just as much as bombs, bullets and bandades are in the Defense Dept.
Since THEY are the real drivers of debt, its time for THEM to pay their “fair share” for the damage they (and their unions) have caused:
All government employees earning 100K get an immediate 10% pay cut.
You can live on 90 grand, or you can look for work in the private sector.
Choose.
All government employees earning 150 to 175 K get an immediate 15% pay cut.
Youre still well into a 6 figure income.
Cry me a river.
All government employees earning 200K get a 20% cut…
Come on, tell me you cant LIVE on 180K a year?
All government employees earning 300K get a 30% cut.
Be serious, 270K is a sweet deal for what you actually do.
No one earns more than 500K. EVER.
No exceptions.
If you want to ‘Serve” the people, you have to be willing to “Sacrifice” for the people…
Maybe talk to a soldier or something if you dont quite get that.
We’re not asking for blood.
Trim ALL public employee salaries FIRST, as a sign of good faith,
THEN we’ll see what the numbers look like.
THEN maybe I might agree to a tax increase.
But as long as they, our overpaid servants, are immune to any cost cutting meaures while we take it on the chin…
Let the default happen.
Only one criteria need be looked at, does Obama support it,?????, bad deal for America.
Given that the Republicans only control the House and that the Democrats hold both the Senate and the White House, it’s probably the best deal the Republicans could get given the circumstances.
But at least the Tea Parties and their supporters have forced both the Democrats AND the Republicans to change the national conversation on how to actually cut the budget and save money. We’ve come a long, long, way from when “Hope and Change” got into office and wasted almost one trillion (that’s with a “T”) dollars on a “stimulus” bill that only stimulated more debt and a few new union jobs. Take the deal and pour all our resources in winning in 2012. Win the White House, win the Senate, keep the House, and then force the Democrats to sit by silently while we cut all of their precious budgets, especially NPR and PBS. Keep your eyes on the prize, people, and it CAN get done in 2012.
The problem is systemic, not episodic. This “solution” is a shell game.
The “redistribution” mindset of the leftists that currently run this country has not gone away. They have not “surrendered” and they have no intention of fixing the economic disaster they have built.
This “solution” is a mixture of spit and Elmer’s glue, a patchwork quilt so threadbare, it would be transparent if we had not grown so myopic after decades of being poked in the eyes.
Entitlements, virtually all of them…are on an unsustainable course. Gouging the top 50% of wage earners more and more and more won’t cure that. It will actually make the economy even more degraded, faster and with longer lasting effects.
The leftists do not care. One whit. Crashing the economy actually helps to make the populace completely dependent. They don’t wish to eliminate separation of have’s and have less…by creating more opportunity and raising up the bottom half…they wish to confiscate from the upper half…and call that “fairness”.
And, the leftists despise the military and our defense infrastructure. Always have. They consider them mortal enemies. What would they care if it was completely dismantled? That’s a feature, not a bug.
Lastly, they wail, squeal and gnash their teeth about losing Medicaid…but, they have been trying to find a way to attrition out the stubborn, old, Republican voting white people en masse….and this is a gift from heaven. They can blame the Republicans AND wipe out their most consistent base.
Smoke and mirrors? It’s a wildfire and shards of glass.
The devil is indeed in the details, and will the Congress get to really read the bill and see what’s in the small print, before voting on same. Let’s hope this isn’t another case of “we have to pass the bill to know whats in it”, because we know the Democrats are good at double dealing.
Another factor involved in the success of cutting spending, is that we are talking about savings over a ten year period. Should the Democrats regain total control, you can be sure that spending cuts will go bye bye. It is imperative that we elect a Republican Senate, and regain the White House. And then, we are going to have to hold the majority in those branches of government, to ensure we maintain the momentum towards smaller government.
I truly believe, that a majority of the American people are fed up with the Federal Government’s profligate spending. That anger is going to need to be focused on the government over the long term to keep it honest. We need to be sure that going forward, we do not just bump up against this new debt limit and then raise it again. To reduce government, we need to start moving towards lowering the debt limit incrementally. Less money sent to Washington DC is the only way to shrink government. We have to make sure that every dollar spent comes from money the government has, not money it has plus money it borrows. Then, we have to start reducing those dollars available to the government to spend, dollars that come out of our pockets.
Root ’83—
“All government employees earning 200K get a 20% cut…
Come on, tell me you cant LIVE on 180K a year?
All government employees earning 300K get a 30% cut.
Be serious, 270K is a sweet deal for what you actually do.”
Want to recheck that math?
Buddy #32
Give us a top ten list of OZ movies then (not to veer too much OT)…
The Root ’83
I agree about the overhead. With 2 million civilian federal employees, the federal government is hugely overstaffed. Elminating obsolete / unneeded agencies would be a good first step. A 10% across the board reduction in staff would be a great 2nd step.
How about making the Department of Education, EPA, HUD OSHA, DARPA, the Federal Reserve, the State Department, the ATF and Erik Holder’s Justice Department all wholly-owned subsidiaries of the US Post Office?
52. Gordon
He does, but they surely don’t.
There are no cuts,
There are promised reductions in the rate of increase in spending.
Those are not cuts.
The Federal Government is a runaway train and the GOP just dumped a truckload of marshmallows on the tracks to stop it.
53 – gordon
20% cut of $200K = $20K, and 30% cut of $300K = $30K is just an example of Congressional deficit-cutting mathematics. And the $200K and $300K are “projected” amounts, not current actual salaries.
Creative accounting not bound by rigid rules is so much easier to work with. It helps that journalists don’t know, and can’t even comprehend, the difference between a $billion and a $trillion.
A quick whip count of the debt ceiling vote indicates we have 157 no votes (70 from the Progressive caucus and 87 from the TEA Party caucus). That is already sufficient to block a bill brought up under Suspension of the Rules. It takes 216 votes to block something brought up under normal or emergency protocol, meaning we need these plus 49 more. If the Democrats or the Republicans try to wash their hands of this, it doesn’t pass.
Jaybird, this is why when I called my Senator last night, I quoted the figure I wanted cut from next year’s budget ($500 billion) in scientific notation. It’s hard to mix up that quote.
In regards to conspiracies: these do exist. True, much of the speculations about these is hogwash but some are real. Political parties are made up of persons conspiring to take control of the government in order to impose their agenda on all. Businesses routinely conspire to undermine their competitors in order to capture more market share and, hopefully, put their rivals out of business. I suppose that many think that conspiracies are closed, secret things but open conspiracies exist.
The left – “progressives” – have conspired for decades to bring America to where it is today. They haven’t hidden their agenda. Neither did the Fascists, Nazis or Bolsheviks. It’s just that people either chose to disbelieve that such true believers really are true believers or they chose to believe that the most radical of the positions espoused by such parties are anything more than devices to inflame the masses or instill zeal in the rank and file but that the leadership is surely not serious about implementing such. It is only after the gulag opens or mass murder is underway that people wake up and discover that those people really did mean what they said.
In other words real conspiracies are sometimes masked by the wishful thinking of their targets. There were Jews who couldn’t believe what was happening even as it happened to them. There were old “comrades” who sure that if Comrade Stalin only knew what was happening he would put an end to it.
No doubt there were citizens of Cambodia who never believed that the communists would really implement a policy aimed at erasing the past believing that by so doing they could start over at “year zero” and reinvent their civilization and create heaven on earth for all the downtrodden and oppressed. That was their intention but the reality was hell on earth and the slaughter of over a million. The leftists in this country have, in their way, the same objective in mind. What they have done and intend to do is intentional. They don’t aim at murdering millions (though there have been those on the farthest edge of the left who have toyed with the idea) but they do aim at destroying tradition and institutions in order to “fundemenally transform” the United States into something very different from what it has been. That their actions have resulted in conditions far different from what they envisioned is no doubt surprising, maybe even shocking, for some. But not for all. Some of them have expected this and even welcome it as a kind of payback for what they believe are the crimes of this nation and its people. But I guarantee you that for the hard core of the left there is a belief that once the unpleasantness has passed the new El Dorado will usher in with peace and plenty for all. That is the belief of all these parties – that to bring the human race into the perfect world of tomorrow requires the determination to eradicate the reactionary and retarding forces of today by whatever means necessary. That their actions in so doing ensure a future diametrically at odds with the one envisioned is not considered.
The progressive left in this country is anti-American but they certainly do not think of themselves as such and would be highly offended to be called such. They are for a “better America” that is more “tolerant” and “diverse” where everybody believes uniformly and there is no contention or strife and all the wealth is distributed equally and none are in want or need. But this requires erasing the “false consciousness” of the past. So they, like us, look and see that the America we live in was founded on Judeo/Christian principles and they work to undermine these by expelling any referrence to such from public education and political discourse. They see that the principles of the Founders are part of the bedrock of the political and economic institutions of the nation so they work tirelessly to traduce those men the better to then dismiss those principles as the product of corrupt, wicked men. They replace the faith and ideals of the nation with a new faith and new ideals because they know that to simply destroy is to leave a vacume into which almost anything can coming rushing. So they insist on government schools and then, once these are well established and education is compulsory, they insist on specific curricula designed to inculcate the new faith and the new principles that will guide the nation.
As far as the progressive left is concerned none of this is done out of malice but out of a deep and abiding belief in what America “should be”. When they act in order to discredit and destroy the reputations of their opponents this is an act dictated by necessity in pursuit of the higher purpose to fundementally transform America and create the more perfect future. Dennis Prager says that the faith of the left is just as firm as the faith of committed Christians. If that is the case then there is no reason to believe they can be dealt with with any more hope of success or accomodation than has been achieved in dealing with Islam. I leave it to others to judge how well that has gone.
Let’s picture the federal government as a freight train heading towards a bridge that is missing. Unfortunately, the train is run by a committee, so it is not a simple operation to turn the train around, which is the goal of the Republican majority in the House (and many posters here). So what to do?
First, they have to change the terms of the debate. From “Tax and spend” on one side arguing against “Let’s accelerate more slowly,” which describes the recent positions of the two establishment parties. To “How much do we reduce the size of the federal government?” And eventually to “Shall we reduce the federal government all the way down to the size allowed in the Constitution?”
I see the Republicans in the House as fighting a year-long battle with this goal. Yes, they have not achieved anything concrete yet. Yes, proposed cuts to the 2012 budget in the neighborhood of $50 billion are trivially small when compared to the magnitude of the problem, even when coupled with vague promises to cut additional small amounts in future years.
But I think they are succeeding at changing the terms of the national debate. The actual details of the numbers used now are less important than winning over public opinion.
Once we have a consensus, there are steps that we need to take, including across-the-board cuts of 5 to 10 percent of every program and every department in the federal government, and abolition of whole programs and departments. But doing so has never been possible because of the political climate–there are lots of third rails lying around.
We are at the point now where killing programs that are so small that their loss would be merely symbolic would be important steps forward.
60- myth buster
Your so-called “scientific notation” is just a conspiracy of evil “Western Civilization” white male culture, intended to enslave native peoples. Shame on you, you racist !! Fortunately, liberal educators are creating math books which teach math according to native people’s own culture (eg, the only counting you need is 1, 2, 3, many). Berkeley has eliminated advanced math highschool classes, because not all cultures can do well in these classes. That way, they won’t be confused and enslaved.
If you think your senator understands $500 x 10^9, you are an uncurable optimist. If you think your senator cares about anything but , you are delusional.
I think it is clear now that the US is Greece. This is exactly the kind of solutions the parliament in Greece was able to reach. Almost impossible negotiations that lead to a slightly slower destruction of the country.
The era of the United States as a formidable power is over. Though it will take a few years for the reality to sink in.
Greece is the word
Greece is the word, is the word that you heard
It’s got groove it’s got meaning
Greece is the time, is the place is the motion
Greece is the way we are feeling
JL @ 64 – I think the foes of the US see its weakness now. They will act soon.
Josh @ 65 – Brilliant!
Liberty – This deal is far, far worse than no deal.
It is an outrage and a trap.
It is a back door to things the Democrats could not get otherwise in this Congress like tax increases and massive cuts to defense spending. As I think Subotai rightly above points out, there will be at least one RINO to cave for the Dems in this proposed “Super Congress” . As a result, this ‘Super Congress” is rigged for tax increases, defense cuts and no real cuts in discretionary non defense spending. It also ties the hands of Conservatives in this Congress to try and fix this economy. Is that really a deal you can live with?
It appears now that it is a near certainty that America’s sovereign debt will be downgraded. Interest rates in all likelihood will rise. The economy is probably already in recession; the lack of concrete steps to deal with our deficits will only make things worse- perhaps much worse. And despite all that, our Congressional Leadership wants to deal only in fantasy gimmicks that only paper over our problems.
The best we could hope for with the present GOP Congressional Leadership at this point, is a bill that would raise the debt ceiling for interest payments only in exchange for a bill that would prioritize the remaining spending along the lines that Blast from the Past outlined above. Let a shutdown happen, the vast majority of checks go to Democrats. Just make sure the military and the like get paid.
This whole debt ceiling fight has proven it’s time for a majority of the Pubs in the House to dump their Leadership. The Leadership has proven unwilling to present and fight for a clear blueprint for progress on the economy and on the deficit. This latest deal is a pure capitulation that really gains nothing concrete for the Pubs, but gives away the store to the Dems. Anyone who even thinks this deal is acceptable should not be in the Leadership. Ever.
The idea that this is all we can get is the same old Republican cowardice. Spending bills must originate in the House. There can be no spending unless the House authorizes it. This fight is about the will of the House to determine spending priorities. And it comes down to the will of the House. The House has sufficient leverage. They should use it. End of story.
The GOP had a golden occasion to speak to the People and say: We will not allow the demise of America.
It seems that they folded, instead.
They keep thinking “politics”. The subversive internationalists instead keep thinking “war”, and they are now very near to an important victory.
Raising the debt ceiling without a substantial cut of the expenses is suicidal.
But maybe it’s a good thing if our sovereign debt is downgraded.
At least it’s the natural thing, the market speaking.
The sun will rise, and all that.
… though Bernanke will still try to fight it. What does “downgrade” mean when he can buy all the Treasury debt he wants just by splashing a few bucks of ink on some paper?
“We got a Deal”.
Just who is We here?
He has a mouse in his pocket.
59. myth buster. There is also discontented rumblings coming out of the Senate.
This will be a fear vote. Do you fear a Default or a Bond ratings downgrade more?
The Demonbrats have tried to link them, but the ratings agencies decoupled them this weekend. So they (Congress) needs to put off the vote long enough to see what Moody’s does. If they downgrade our bonds anyway, A large part of the fear factor is gone.
Since petty cash contains over 3x the interest on August bonds, go thru and eliminate the pork projects in the miscellaneous funding (petty cash) budget. That will get us thru to Oct. 01, when the yearly cycle starts again. One good bookkeeping trick deserves another.
535 Congress critters all have their Ox’s lined up and are fiercely protecting them. Just theirs, they are quite willing to sacrifice someone else’s Ox.
That is why across the board cuts are needed. Let everybody sacrifice. Granny gets a cut, as does Lockheed, GM and AIG.
http://cnsnews.com/news/article/bachmann-debt-limit-deal-means-we-embrac
Yep–and the so-called ‘triggers’ are just a fraud. Pulling a trigger doesn’t do anything unless the gun is loaded. To the extent that it might be loaded I’m sure it will have only one bullet in it, and that the military will be shot first (and last).
The art of the possible is not necessarily the art of the adequate. The debt ceiling agreement may be the “best the GOP can do” yet unable to change the underlying problem. The effect will be like the EU bailout attempts which calm the markets for a few short days before the crisis comes back just as strongly as before.
This suggests that rather than “giving President Obama” — and one might add the political system — a breathing spell until 2012 that it may only work for a few short days or weeks.
At each stage the political system will accomplish “the possible” but the parameters of the possible will change over time as the crisis grows.
that ain’t a mouse, and that ain’t his pocket.
/raises hand
Am I the only human being on the planet who remembers the Fourteenth Amendment…? Uncle Sam *cannot* default on his debts. It’s unconstitutional. We’re not in danger of a default. We are, perhaps, in danger of my mother not getting her Social Security check on time.
I’m encouraged by the lack of new taxes. The lack of even the possibility of a balanced budget amendment dismays me, and the public debt being jacked up by yet more trillions wearies and sickens me. The Republicans ought to stand fast.
scory @61: It has always been distressing to me how few people on our side understand Marxism-Leninism. Once you know what they believe and how they think, what they are going to do becomes obvious.
My US History teacher in 11th grade (1966-67) made us read Marx, Engels, and Lenin (this was somewhat controversial, back then). He made special emphasis on “What Is To Be Done?” (1905) because of the overt rejection of worker democracy and the justification, indeed the necessity, of the red terror. He did it to prepare us for the war that he knew was coming, and now, here it is!
I owe him everything for the tools I have for understanding what we are dealing with.
The breakdown of a currency is non-linear, more like a breakaway panic.
Since the next wave of debt has no market, the hyperinflation that has doubled crude oil prices should ramp them again.
Americans should seriously consider getting more Canadian exposure in their portfolios.
Start with hard rock miners.
Ironically, power companies — with lots of debt — are corporate survivors during hyperinflation.
Those able to tap hydropower are in a fantastic position.
Take the deal and then take back the White House and the Senate. Also, hope that Ginsburg lasts long enough to retire under a GOP president, so she can be replaced with another justice along the lines of Thomas, Roberts, or Scalia.
Then start a long march through the institutions to purge as many parasites from the American systems as possible. Defund all activists, for one. Then keep going: take the racial gerrymadering clause out of the Civil Rights Act, and phase out all forms of affirmative action. The House must reassert its Constitutional authority as well. I know there’s more: gold standard, maybe? End agricultural subsidies, and get rid of that execrable ethanol subsidy, for God’ sake. Change our anti-terror security measures back to intelligent profiling from the current practice of mass groping; defund municipalities who defy the Supreme Court ruling on the Second Amendment (that would be you Chicago and DC). And so on and so forth.
From what I have read and heard last night and this morning, this Bill rather stinks. The Bush tax cuts expire at the end of 2012…the baseline deficit calculations count on that, and if that is not allowed to happen, the resultant accounting deficit will have to be made up elsewhere. Also, the insane automatic scheduled increases in budgetary items continue from year to year, and the continuation, of the stimulus programs goes on. Finally, the defense cuts are really bad.
That said, I think we have to go with this. All depends on the election next year. If Obama can be defeated, and the Republicans hold the House, and make gains in the Senate, some of the damage can be undone, or even rolled back. If Obama is re-elected, we’re cooked anyway. In any case, the conservatives cannot rescue the American project with control of one chamber of Congress and no President.
for Phil Stone #75: the problem with that idea is that there are so many ways to default that technically meet the definition of paying.
Here’s the easiest: QE3, or 30, or 3,000, whatever you want to call it. The debt comes up for refinancing: The Federal Reserve, which exists outside of the Constitutional Framework (just try to find any authority for something like that in the document) simply creates money out of thin air and hands it to all the bondholders, satisfying the requirement of paying the debt. The Dollar is worthless and dropping into a Weimar Republic like hyperinflationary collapse, but the debt will be paid.
That’s the problem with it. Of course the debt will be paid; but if it’s done in a way that destroys the country, so what?
Gotta agree with the posts by both Blert and Don Rodrigo. Very sage advice.
I think the poll needs another choice: “The best we can do until 2013.”
The sad fact lost in the gab about debt ceilings and shared sacrifice is, the answer to the nation’s dillema is staring us right in the face.
Return power to the states. Devolve power away from DC, re-animate the process of experimentation and testing of civic models in a competitive arena that we used to call the “laboratory of the states.” Greatly curtail the flows of revenues to “the center” quite simply by obviating the center; when states, localities and families self-govern effectively, DC’s non-defense agenda (and thusly, the Left’s, too) will be rendered irrelevant.
The concept of competing entities vying to entice creative, productive residents to move to their states because they have empirically succeeded at innovating and delivering exceptional programs and services relative to thier neighboring states, is not a difficult concept to relay.
It’s a wonder the GOP hasn’t been more forthright in legislating to support this model. Outside of the context of education reform, or of support for the 2nd amendment, Conservatives’ representatives in the Legislature seem at times to have forgot the US’s key civic design feature, and to have traded it for a seat at the center-trough.
I want that – oh but I can’t afford it. I know – I’ll just charge it.
)
Problem solved
Boy, did I ever butcher that one!
Anyway…if the problem is unnaccountable government with bad money habits, the citizen performing empirical, side-by-side comparisons over time is the only way for him to appraise the value he gets for his government dollar.
Is California’s school system better than, say, Idaho’s? Do North Dakota county community colleges produce better employees than, say, Washington’s do? Funny. You’d think the Repub’s would enjoy hearing the answers to these sorts of questions.
Relative performance. Comparisons. Competition. Empiricism. Standards. These concepts are like garlic to DC’s blood suckers. We ought be shoving them in their faces right now. A return of the states-rights agenda in Congress’d provide the perfect venue to do so.
2. Mr. X
Agreed. The USA could quite easily become a net oil/exporter in ten years.
The second thing to do is to change the tax laws so as to encourage US corporations to take their foreign profits and invest them in the USA.
Right now the current tax structure discourages US corporations from doing that.
The big balanced budget amendment will have to wait for the decisions of the 2012 elections.
Get a balanced budget amendment then’
Plus get the US on the way to oil independence by 2020
Plus change the tax laws so as to encourage US corporations to repatriate their
overseas profits to the USA.
Deport illegals.
Those four things will set the US government economic house in order.
Uh, oh yeah. Repeal Obamacare.
and restore Glass/Steagal.
steveaz @ 82 said:
“Return power to the states.”
That’s the last act in a multi-act play. Some predictions:
1) Obama and the US Congress go through extensive Kabuki theater that produces nothing of significance. The markets and credit agencies react appropriately, i.e. everything crashes big time.
2) Obama gets the heave-ho in 2012 along with the Democrats in the Senate.
3) ObamaCare along with most of Obama’s socialist vision gets repealed by the new congress.
4) After repealing Obama’s socialist program, the Republicans recognize the federal government is still bankrupt and opt to toss the whole socialist program into the trash can. Big problem: There are millions of Americans who are dependent upon Social Security and Medicare. The Republicans gift wrap and tie a bow around the whole stinking pile of excrement and hand it to the individual states: Your problem!
5) Hopefully after the smoke clears and the dust settles, there will be a balanced budget amendment to the U.S. Constitution and the 16th amendment will have been repealed. After those modifications to the U.S. Constitution, American socialism will lay dead and decapitated on the ground, with it’s mouth stuffed with garlic and a stake through its heart. Noam Chomsky could be elected President after that but be able to do nothing because he’d have no funding mechanism. He’d be all bark and no bite.
c/86, don’t forget the tax code –do something about that 16,000 pages and the fact that no two CPAs can ever repeat results on any but the simplest data set. This is so careless, the cynicism it breeds is too good for it.
egg/87 part 4: “block grant”
(oddly, what Robert E Lee tried to do, block Grant)
49, 62, 78, 79. All good, realistic comments.
The debt issue is of paramount importance, but it needs to be relegated to secondary status in the election. “It’s the economy, stupid.” I don’t want it to go away. In theory, it should be #1… with a truly informed electorate, but that is not what we have. We ahve to talk about the economy to win. We just need to get to 2013, folks. We are just buying time.
This deal is far from ideal. Is it an airball? No. (Btw, first down is football, and airball is basketball. Mixed metaphor. I think you meant dropped pass.)
The ’08 election was a kickoff return into scoring range. The fight against Stimulus, Climate Change nonsense, and ObamaCare were goal-line stands. They were finally forced to kick a field goal. The 2012 election was a good run-back of their kickoff. The budgets were incomplete passes. Only the ground game has been effective. This is a first down. We’re just ramming it down their throats.
We are not getting everything we want all at once, but they are not stopping us, and they are getting nothing they want. We start a new series of downs. Now we move to actually producing a budget,as per this agreement.
Here is what the Left wanted but had to give up, for those of you who are so unhappy:
Tax-rate hikes;
Additional stimulus;
Producing no budget (let the Republicans make the tough choices);
Blaming Republicans for the deficit/spending;
No entitlement cuts;
Obama re-election boost;
Making the Right look “extreme”, “ideological”, and “irresponsible”;
They got nothing. Nothing!
We gained a first-down, because we shifted the dialogue. The talk is about cutting spending. So is the agreed solution. They have ceded us the high-ground on this. We are beginning to win.
I think folks are foolish to think that it is supposed to be easy, just like snapping your fingers. The Dems thought that when they won in ’08. They had the power and still could not score a TD. Now we have far less power, and folks think we can just get it done easily. We can’t. It is going to be a long grueling fight the whole way. Even in 2013, it will still be hard.
It is not supposed to be easy. Our Founders saw to that. They did not want wild swings of public mood to create wild swings in the Republic. It is why they chose to have a Republic, not a Democracy. Real change is supposed to come slowly, deliberately.
Nov ’12 won’t solve it. We will have to fight again in Nov ’14, and again in Nov ’16. But about then, we will be very close to victory, as long as we DO NOT OVER-REACH like the Dems did. Slow. Deliberate. Grind it out, and hold onto the ball.
This is a victory. This is the Right getting their first first-down in a long time, and across midfield. We are learning to play offense, finally. This is a good day. Enjoy it.
As bad as I do believe this debt crisis is, I also believe it’s being overblown by the Administration/MSM/Congress to provide as much of a smokescreen as possible for Gunwalker.
If true, what will they do as an encore?
The Spending is Nuts
http://www.youtube.com/watch?v=6AgL-I3PxHE&fe…
“Happiness and moral duty are inseparably connected.” George Washington
@90 Mark Malone:
Perfect. Thank you for your sanity
first down or air ball?
i think this is more apt:
http://www.youtube.com/watch?v=CocwA5LXKlc
The Pubs show their true colors and vote to destroy the economy and defense 269- 161.
A bunch of clowns. How do they think we are going to take them seriously? Where can I sign up for another political party besides the traitor parties?
90. Marc Malone
It’s true that the democrats got nothing. But are we supposed to be happy just because the inevitable crash has been postponed by a few months.
There is no such thing as half dead, half pregnant or half bankrupt. If it’s not enough, it’s not enough. And it’s not enough. And when it’s not enough it’s bankruptcy.
The Republicans did everything they could. And they should be applauded for their valiant effort.
And the country is still doomed. It was basically too late to fix 5 years ago. Now it’s not even possible in theory. So excuse me if I’m not doing a victory lap. The world is going to see a few life altering events in the next 10 years. The fall of the US will be one of them. The only question now is how? Will it happen like Greece, like Japan or total anarchy?
Half of the Gulf of Mexico well-heads are capped. There are enormous untapped resources in those fields. Then there is the “dirty oil” patch in Rocky Mountain east zones, which is expanding monthly, with new discoveries. New technologies are enhancing exploitation of Prudoe Bay environs fields. Then there is off-shore California, which is subject to environment constraints, that cost-benefit politics could squelch. Then there is natural gas, which is also easier to exploit in context of the post Ice Age pullback. Hybrid engines, which can shut down pistons that are not needed for transportation tasks, are also a saver. In terms of external resources, Canada is now the number one import source. Some of us advocate Anglo-American repatriation of the oil-patch of the Saud-terrorist entity, and making same a national product. Those are all deep-well, and would be better operated by civilized people.
However, everything would be a lot easier if saud-slaves weren’t in the White House.
http://www.youtube.com/watch?v=9WlqW6UCeaY
http://www.youtube.com/watch?v=OUoycVXw9ew
Theres NO winners! Only losers!
There will be NO significant governing between now and the 2012 elections. Everything is going to be pure political posturing rhetoric. The dems are sitting back letting the TeaParty-GOP drive the agenda bus between the 2010 election and the coming 2012. Folks are not to fast in figuring out the TeaParty-GOP has no advocated anything in their bills that will do anything before the elections of 2012….the same ‘political’ mentality of the dems.
NO solutions for the economy! No solutions for the ever increasing joblessness! Certainly no implementation of anything to do with the deficits and debt until after 2012 elections.
Nobody is working with the international community who is fast losing confidence in both the government and the USD. Why? Because neither the Democrats, the TeaParty-GOP or the private sector have anything to offer for solutions to the more critical private sector’s inability to reconstitute the economy and JOBS.
In May 2011, U.S. exports of goods and services decreased to $174.9 billion since April 2011, with record exports of services ($49.7 billion).
According to a report issued by the Department of Commerce’s International Trade Administration U.S. exports supported an estimated 9.2 million jobs in 2010, up from 8.7 million in 2009. For every billion dollars of exports, over 5,000 jobs are supported.
The value of exports that support one job was $181,000 in 2010, an increase of $17,000, or 10 percent from the 2009 figure, as export prices and productivity have strengthened.
The latest available export-related employment numbers indicate that U.S. jobs dependent on manufactured exports totaled an estimated 5.3 million in 2009. These 5.3 million jobs represented 4.8 percent of total private sector employment in the United States, or roughly one out of every 21 private sector jobs.
WHEN IS THE LAST TIME LAST MONTH OR SINCE 2010, YOUR TEA PARTY GOP REPRESENTATIVES HAVE DISCUSSED THE REAL PROBLEMS OF THE PRIVATE SECTOR ECONOMY AND JOBS WITH YOU?
WHENS THE LAST TIME PRIVATE SECTOR LEADERS OF THE MANUFACTURING AND SERVICE ECONOMIES DISCUSSED THE PROBLEMS AND OFFERED ANY SOLUTIONS WITH YOU FOLKS?
The private sector (commerce and the people) hold not only most of the nations assets but also most of the nations debts.
Folks keep obsessing and belly-aching over the nations problems and who do they run to for solutions? Yep! The very same entity (federal government) they demand get out of the way of the private sector economies and let it do it’s ‘natural’ job.
Why don’t the people who demand the government get out of the way, begin to demand that ALL 1,700 + federal government subsidies (the easiest starting place) be repealed IMMEDIATELY?
Any bets we won’t hear that demand from anybody who’s obsessed and belly aching about the government being in the way of the private sector and its economies?
Come on Tea Party! Lets hear you demand this! Lets see you introduce a bill for repealing all 1,700 + subsidies well before 2012 elections!
o/t to DQ/53; Oz films in the mind, by director, or by location, or both: the LotR series, Mad Max series, Walkabout, Master & Commander, Gladiator, Gallipoli, Breaker Morant, Black Robe, Tender Mercies, Picnic at Hanging Rock, Chariots of Fire, The Piano, Babe –that’s 13, a lucky number if you’re upside down in the Antipodes –LOL –
Tops in my book, visual sense of the menace of raw nature which the 17th explorers must’ve confronted and which we won’t even comprehend without films such as this:
http://www.bing.com/search?q=film+black+robe&form=IE8SRC&src=IE-SearchBox
***
(sorry, back to the regularly scheduled deprogramming)
The plan also calls for $1 trillion in savings over 10 years as a first step. One critical question: is this a cut in actual (zero-based) spending? Or is it a $1e12 drop in the baseline spending (which assumes a $7e12 per decade increase)? If it is the latter – which is usually the case in Congressional accounting – than we are still spending more than we can possible take in, and the problem has not been solved.
Excuse me, that baseline should be $7e12 increase in budget assumed per decade , not per year.
buddy@43: “If we could raise growth to a mere 4% (or 400% from where we are), we could grow our way to a normal deficit of around 2 or 3% of GDP –or put another way cut by two thirds our current deficit to GDP ratio.”
I feel like there are some gigantic facts out there that are simply escaping my attention and I’m starting to feel really stupid about it. I know buddy is a smart guy and I’m pretty sure he’s a fiscal conservative, like many others here. And yet he, along with many other people whose opinions I’ve come to respect, speaks blithely of a “normal” deficit. Everyone in the world outside of myself seems to feel that it is a good thing if we can just cut down the deficit.
Meanwhile, I look at the $14.whatever trillion we owe and I’m thinking the conversation should be less about cutting the deficit and more about flipping it into a surplus and then arguing about how and by how much we can maximize that to reduce the DEBT. Talking about the deficit in terms of % of GDP in many cases is a lot more fair than throwing around the nominal deficit, but it still feels to me like a distraction. It’s framing the debate wrong by building expectations of a deficit into our baseline, isn’t it? What am I missing? Seems to me we need one mean SOB in the white house to get this thing on the right track. Let’s have a seance and see if we can ring up Andrew Jackson. IIRC, he’s the only one who ever proved he could actually do this.
@45: That would be Fiddler. I don’t think I have any friends who would actually try to read the Obamacare law. I myself would come closest among my circle of friends, and I’d rather finally get around to reading “War and Peace” first.
TTT@98: “Why don’t the people who demand the government get out of the way, begin to demand that ALL 1,700 + federal government subsidies (the easiest starting place) be repealed IMMEDIATELY?
Any bets we won’t hear that demand from anybody who’s obsessed and belly aching about the government being in the way of the private sector and its economies?
Come on Tea Party! Lets hear you demand this! Lets see you introduce a bill for repealing all 1,700 + subsidies well before 2012 elections!”
Well, if you haven’t heard it before now, then you heard it here first. The government should pull ALL subsidies of every kind to every sector. The only ones I see a use for are indirect ag subsidies like food stamps and WIC, and they really need to find a way to reduce fraud in those. But I know they do work amazingly well for a government program as constituted, too. I can’t say that about any others. Ethanol? Ditch it. CRP? Ditch it. Ditch one, ditch all.
Get smarter people to redraw regulations. Clean out a lot of them, and inject some common sense, especially into the EPA (which could probably stand a 50% haircut in its budget anyway). Ditch the Dept. of Education, since nobody can seem to articulate a lot of useful things it accomplishes or any real decent measurable results. Get rid of Homeland Security and the ATF and half of the other security agencies, since they can’t seem to coordinate decently on anything except running guns to Mexico.
Your point is exactly right, TTT. Subsidies as much as regulation screws up market signals. But the bigger problem right now is regime uncertainty, and there is no quick fix for that. Businesses look at the clowns running things now and have no idea what the regulatory and legal environment will be like tomorrow, so they have to keep LOTS of cash on hand for whatever taxes they dream up tonight and implement tomorrow. Say what you want about Bush, but he kept a steady hand on the rudder. I didn’t much like his direction in domestic policy, but at least everybody on board could look at which way we were going and make a reasonable guess at where we would be in a day or two. No way to do that today. Obama won’t even write his proposals down, he just legislates by speech and by sound bites given by the press secretary. And he’s not supposed to be legislating. Sigh.
JL@96: “The world is going to see a few life altering events in the next 10 years. The fall of the US will be one of them. The only question now is how? Will it happen like Greece, like Japan or total anarchy?”
I share your viewpoint for the most part. Though, that’s not the ONLY question. A rather important and relevant question is what happens with the power vacuum when the US withdraws from the world stage to deal with its own issues? I don’t think China is really ready to be more than a regional power, as they’ve got a whole host of their own internal problems. Same for Russia, really, and the EU has their own things going on obviously.
History shows that the world really thrives only when there is one or two major powers that set the agenda and keep the nasties at least a little in line. The Babylonians, Greeks, Romans, Spanish, British, French, Russians, American….all these powers and many others have at one time or another risen to the top of the heap and steered or helped to steer the world. When you have a rudderless world, just throw in an epidemic or other black swan and you’ve got a lost 1,000 years just like the dark ages.
AP/102; i hear ya –but in defense i refer you to the 12 step concept, where the jittery addict might well throw in the towel if you advise him that he must, from now on, for the rest of his life, go cold turkey.
And then there’s the old proverb, that the journey begins with the first step, no matter how long or short it is to be.
3) “Try it, you’ll liiiike it!” –works with dessert, or a movie, or a vacation spot, anything you know is good, but that is facing unfamiliarity-driven reluctance. Doesn’t work for anything where the risk is more than negligible, whether that risk is discomfort, or that the speaker , sponsoring the idea, is more interested in enrolling you than in whether or not “…you’ll liiike it!”
4) Because the laws of nature create time and space, location can’t be changed by leap of faith or act of will. A journey is required –preceded by a turning. That turning is the leap of faith or act of will. The turning movement is the same, regardless of whether done with trepidation and doubt or enthusiasm and determination, and unlike the journey through time and financial space to the new financial location, the leap or act is done in the instant of the present.
So, to attempt to move someone to the same eventual place (‘eventual place’ = ‘placed in time by event’), you can ask for a personally risky commitment to a long, difficult effort to arrive at an unfamiliar place, or you can ask for an easily-managed, quickly-done, low-risk return to a familiar state.
With the former, you’re more likely to get nothing; with the latter more likely to get something. ‘Something’ can grow; ‘nothing’ can’t grow (except entropy, in negative space).
5) five being a comfort, while four is a bad number for action, i’d like to add this fifth point, in the form of a question: “Jeez, will i EVER shut up?”