How Do You Solve a Problem like the National Debt?
The sky is falling! Quick! Run hide under your made-in-China umbrella before it's too late!
As talks over raising the national debt limit falter, a four trillion dollar reduction deficit reduction deal appears to be off the table and a two to two and one-half trillion dollar deal may be the best to be hoped for in time to save the world:
Democrats want to shield popular domestic programs from huge cuts and say that any deal must include increases in tax revenue, including an expiration of Bush-era tax cuts on wealthier Americans.
Republicans -- under pressure from Tea Party conservatives -- reject any increased taxes and want curbs on popular benefit programs such as Medicare, Medicaid and Social Security.
This is apparently because (a) President Barack Obama continues to insist on another trillion dollars in new taxes and (b) according to Secretary of the Treasury Tim Geithner, August 2 is the drop-dead date for a deal and if one isn't struck by then there will be a catastrophe. Obama says that a deal must be struck within ten days from July 10 -- rather like ObamaCare had to be passed quickly so we could see what it said. We the peons still do not know what spending cuts the Obama administration has on the table; why should we? We don't need to know, we just need to acquiesce and reelect him next year. The new head of the International Monetary Fund says that if we don't shape up very bad things will happen. Preventing those bad things will make it necessary to
Greece grease -- right now -- the palms of those who want to keep our welfare state perpetually afloat by taxing the "rich" more than we already do, resulting in lower tax revenues by decreasing incentives to invest in productive (non-governmental) sectors of society. But don't worry! There is method to this madness:
Last November Republicans won the House and landslide gains in many states in large part because of the deep unpopularity of the stimulus and ObamaCare. Mr. Boehner has a mandate for spending cuts and repealing the Affordable Care Act. If Republicans instead agree to raise taxes in return for future spending cuts that may or may not happen, they will simply be the tax collectors for Mr. Obama's much expanded entitlement society.
Relief was finally here. You see borrowing was not really printing money but a new sort of math in which the “people” would be saved from Wall Street chicanery by brilliant new stimulatory theories. Borrowing money “created” more money; spending “money” was stimulus that made even more money. Most of the debate centered around the pitifully small size of the new deficits: a three-year plan to print $5 trillion was deemed conservative or too timid by many of the Obama geniuses. Joe Biden, given his sterling credentials and vast knowledge (re: his call for Bush to rally the people — as FDR supposedly did as president “in 1929″ and “on television” no less) would oversee the trillion-dollar borrowing to ensure it was “shovel-ready.”
Senator Jim DeMint, Republican of South Carolina, said,
The fact is we will pay our debts if it’s the last dollar we have. There are enough assets in Social Security and Medicare to pay the benefits of those programs for several years. Other programs can be funded from tax revenue. There certainly will be disruption....But this is not a deadline we should rush and make a bad deal and do something that cuts benefits from seniors without giving them better choices.
made it clear that she’s against any deal that raises the debt ceiling and would hold House Speaker John Boehner’s feet to the fire if he agreed to one . . . .
"No, we have to cut spending. It is imperative, and I will be very, very disappointed if Boehner and the leaders of the Republican Party cave on any kind of debt deal in the next couple of months."
But she acknowledged that Congress will likely raise the debt ceiling anyway.
She and Senator DeMint are correct.
But how should spending be cut? Reductions in Social Security retirement benefits have been suggested, on the theory that there's still money available there to be used for other purposes and that besides, they are just part of a stupid Ponzi scheme in which participants were apparently foolish to invest. The Social Security system is a stupid Ponzi scheme, but "contributors" to the federal Ponzi scheme -- unlike investors in Mr. Madoff's Ponzi and other such voluntary schemes -- were and still are compelled by federal law to "contribute." For the reasons I stated here, such proposals make no sense. Nor did it make sense to rob the Social Security "trust fund" to pay for things bearing no relation whatever to its purposes:
The compulsory nature of Social Security “contributions” and the purposes for which they were spent — without so much as a “by your leave, Contributor” or even a “thanks a heap, Sucker,” are important differences. The Social Security “Trust Fund” has for years been a giant pig slop for our government to feed at to satisfy the political/ideological needs of our
masterspublic servants. No need to become unpopular by raising taxes; we have the big pig slop.
That made -- and still makes -- no more sense than this: