Don’t Fear Default… Goose and Gander at a National Level

This weekend was a “road trip” weekend for me and my lovely wife. A trip back to my hometown, which also included a detour to Hershey Park so that Mrs. Weapon could experience the wonderful world of chocolate for the first time. What Mecca is to Muslims, Hershey is to 52% of the US population. On the ride north, I listened to a minimal amount of news, instead opting for some music that the USWeapon clan could sing along with on the drive. But I did listen to about an hour of talk radio coverage of the debt ceiling discussions happening in Washington DC. As a result, SUFA gets this article because I am tired of hearing all the bull dookey around the topic.

Allow me to get my position on raising the national debt ceiling out of the way up front. I am opposed to raising the debt ceiling at this time with one exception: I am willing to agree with raising the debt ceiling only if it is accompanied by a piece of legislation that requires the federal government operate with a balanced budget, and ensures that there is not a clause that will allow that legislation to be ignored whenever politically expedient to do so.

In short, I am done with listening to the bullshit excuses from both sides. I am also done with listening to the bullshit fear mongering. It appears that the entirety of the established DC politician’s strategy for persuading the American public to accept raising the debt ceiling is raising flags of fear and scaring them into accepting it. Well, I am not buying it. And if you have any sense, you won’t be either.

And I guess in fairness, I should mention that there is one person in DC who has a different strategy than the fear mongering that everyone else is using: President Obama. He uses the fear mongering but adds in another factor. The President of the United States has resorted to outright lying to make a case for what he wants to do. In his appeal to the American people, he attempted to claim that 80% of Americans are in favor of raising taxes to fix the problem. “The American people are sold. The problem is members of Congress are dug in ideologically.” What a complete load of horse manure. Of course he did couple his lies with more fear mongering, claiming that time is running out for us to avoid “financial armageddon.”

The reality is that the American public is against raising the debt ceiling, against raising taxes to deal with the deficit (although I will touch on that a bit more), and in favor of cutting spending in Washington. I give the caveat to the raising of taxes only because there is a vocal minority in favor of raising taxes only on the wealthy and a vocal minority in favor of only raising taxes on the 47% of Americans who pay no income taxes. The President, along with the rest of the dolts in DC on both sides of the aisle, have deluded themselves into believing that anything they are doing has overwhelming support from Americans. The reality is that Congress has a dismal approval rating, and the President’s isn’t much better at this point.

Adding to the noise are the pronouncements from Moody’s and Standard & Poor’s that the United States is in danger of losing its triple A credit rating. To this I say, I don’t really care. That the United States HAS a triple A credit rating is a firm testament to how irrelevant those two agencies are to reality in the first place. What is good for the goose apparently isn’t good for the gander.

While the average US citizen operates at the complete mercy of a credit rating system that is rigged to do little more than provide justification for increases in interest rates, the federal government apparently has for far too long been allowed to maintain a glowing credit rating while performing more like someone who doesn’t qualify for a debit card. If you or I operated under the same tactics that the federal government operates under, we wouldn’t be able to secure a loan for a vending machine purchase.

The credit agencies in America, who are a completely created entity made to favor the banking industry and corporations, will drop your credit rating for having too much credit extended to you. You don’t have to even be irresponsible and use that credit, you merely have to have been given too much ability to use credit. They will drop your credit rating if people inquire too much into your credit history. You know how crooked the system is when you can actually be penalized for closing credit cards rather than continuing to use them. And you are penalized for having a debt to income ratio that doesn’t equal whatever random figure they come up with at the moment, despite whether you have paid your bills on time or not.

Yet somehow, a federal government that consistently spends far more than they bring in has a triple A credit rating. The federal government operates with a debt to income ratio that, by most measures, doesn’t have the ability to change anytime in the next several decades. We have a national debt above 14 Trillion dollars. We have a budget that spends 1.7 Trillion more than we bring in annually (and that is just the “planned” shortfall, we all know how adept the federal government is at operating within the budget they are allocated). And despite all of this, those two organizations have the audacity to pretend that the United States is worthy of a triple A credit rating? If the federal government were a US citizen they would have a credit rating in the low 100’s and wouldn’t be able to borrow at all.

Top off this discussion with the ridiculous proposal by GOP Senator Mitch McConnell. True to politician form, he offers up a compromise that is the exact opposite of what anyone in the United States should be willing to accept. Under McConnell’s “Plan B”, Congress would give up its power to determine whether the debt ceiling should be raised and give it to the President! Obama would get to determine whether the debt ceiling could be raised and the only way Congress would be able to stop him from doing so would be to have the votes to veto in both houses! How is that somehow an acceptable alternative? It is the most ridiculous idea I have heard to date. Is it any wonder that the country is in such dire straights?

With GOP leadership like Mitch McConnell, ridiculous spending from the previous administration, and out of control spending from the Democrats, the flailing US economy never had a chance.

The bottom line is that neither the Republicans or the Democrats have any intention of doing anything that is going to truly begin to address the serious systemic problems with the US economy and the federal government’s budgets. Both are playing political games with these issues and neither has any clue what to do that would be acceptable to other politicians. But don’t for a second think that they don’t have any clue at all. The crooks on both sides of the aisle know exactly what to do to begin the process of healing what ails this country, but they are aware that the real solutions lie in shrinking government power and scope. That is something that neither side is willing to consider.

As I have said before, and I will repeat here, the battle in America isn’t Democrats versus Republicans. Not at all. Democrats and Republicans are on the same team, despite their gamesmanship. They attempt to define the battle lines in that way. But the reality is that the real battle is between Washington DC politicians and the American people. These two parties, who are both on the same side against us, are playing a high stakes poker game with the our futures. They are not gaming each other. They are gaming you. And the time has come to call their bluff.

No debt ceiling raises. No more increases in federal spending or federal control over our lives. We need to risk our tournament life and push all in. We are going to find that the federal government has been holding 2-7 off-suit the entire time, they were just exceptionally good at making us believe they had pocket Aces.


  1. Agreement … but with an understanding why American workers will feel more jerked than usual (i.e., the bailout that came with similar warnings of financial Armageddon wound up benefitting the most wealthy in the country (like usual). ZERO stipulations to protect American workers have allowed Goldman Sachs et al to not only reward themselves with record bonuses and profits (on the backs of American taxpayers), they continue to ship American jobs overseas. For those of you who “claim” to be against corporatism, why isn’t there any angst about that? (or should they be “free” to find less than minimum wage workers wherever they want?)

    A question for Republicans who voted for the bailouts: If Wall Street was too big to fail, why isn’t the United States of America?

    I doubt the crisis was as bad as it was presented to the public during the 2008 fiasco. I doubt our potential default August 2nd will create a similarly presented crisis. And while I refuse to trust anything this government says (both parties), the fact it is owned by the very people who benefited from the last crisis makes me all the more skeptical.

    So what do we do?

    It seems to me if this crisis was half as real as it is being portrayed, the following would be mandatory for the benefit of the greater good of the country:

    1) an immediate withdrawal of our troops from both Iraq and Afghanistan (in as expedient a manner without endangering our troops as possible). That would be a major cut to our defense budget costs (which help average American workers, except those working in defense contract plants, in no way shape or form).

    2) an immediate significant scaling back of all foreign aid (as much as 50%).

    3) putting an end to lifetime healthcare and pensions for all elected officials; if it isn’t good enough for the people who elect them, why should pols get it?

    4) significant term limits that might help preclude politicians being owned.

    5) an end to all corporate tax loopholes so they are no longer a part of the 47% who don’t pay taxes (which no one here seems to point to).

    6) Then we can start talking about cutting other entitlement programs and a balanced budget amendment.

    Or let it all collapse (as should have happened in 2008) and let the revolution begin already.

    • gmanfortruth says:

      Charlie, Good morning this fine day 🙂

      I mostly agree with you. I like your last sentence, lets get it over with, hang the pols from lampposts and move on. At some point the corruption needs to end, it will not be painless, might as well get it over with.

    • Hi Charlie,

      Like G-Man, I can go along with what you outlined.

      I can even go along quite happily with shutting down corporate tax loopholes and letting the corporations get hit for taxes too. Since we’re going to have taxes, as long as we have a government (which we will of some kind) we’ll have taxes to pay for it’s operation. If we want to limit taxation then limit government and everyone can pay less – not just those who can slide through the openings in the tax code.

      Likely though the ideas you’ve outlined will not see reality. They don’t fit in with the ideas that the political parties believe are best for us poor citizens.

      • And I agree with you both (Gman/Plainly). I think we’re best to just sit back and enjoy the fiasco. Neither party can be trusted. If there’s a collapse around the corner, so be it. If there isn’t, it’ll be business as usual (except a lot more spinning about who won what on the cable channels). It is absolutely across the board pathetic that we the public have these two choices to lead. Frankly, if this is the best we can do, than I’m with BF and absolute anarchism. I think you all know I prefer something more radical, but if it’s really a choice between these two and anarchy, start building the hanging scaffolds.

  2. Ray Hawkins says:

    Is it just me or does the font and wording look a little off?


    Couple of points first:

    USW is claiming the following:

    “The President of the United States has resorted to outright lying to make a case for what he wants to do. In his appeal to the American people, he attempted to claim that 80% of Americans are in favor of raising taxes to fix the problem. “The American people are sold. The problem is members of Congress are dug in ideologically.” What a complete load of horse manure.”

    – Well that isn’t exactly true is it? We cannot call his statement 100% true, but it certainly is not “a load of horse manure”.

    Additionally, much as a I despise Moody’s and S&P – it is erroneous for USW to claim they are irrelevant – the problem is they are very relevant. Until there is a solution that places complete/near complete objectivity into financial instrument rating (go ahead free marketers – this is one I’ve never heard a good answer to) – both “agencies” are still completely prone to influence from the very entities they rate.

    In my opinion the answer rests in:

    (1) An increase in the ceiling – there must be enough float in that new gap for us to un-fuck ourselves;

    (2) A balanced budget amendment

    (3) Normalization and simplification of tax policies – I’m not talking about “sock it to the rich” – I’m talking closing loopholes so we don’t have 50 definitions of income

    (4) Significant and pervasive and deep cuts in spending – this means things like eliminating Social Security (for me – on a gradual progressive scale), complete elimination of foreign aid (goodbye UN), eliminating multiple Federal-level Departments (e.g. Labor, Education, etc), complete Defense overall (e.g eliminate separate branches of services)

    (5) Consider radical term limit requirements – up a House Rep to 4 years but limit them to 2/3 terms. Limit Senators to 2 terms, limit SCOTUS, limit POTUS to a single term…….

    Cheers on a Monday…….


    • Good morning……Ray? I am not sure that this is not a surrogate speaking for you. You seem to talk like a…a…..a….a….COLONEL!!!

      Question, my friend….why do you think there needs to be an increase in the debt ceiling? We have enough money to pay everything…..except increased spending. I would rather have an agreement that does not increase power to the President who bypasses congress anyway…….but I stand ready to call all in.

      Cheers back atcha…just got back from Los Alamos (actually Jemez Springs) in New Mexico. We have a mountain home up there but the fire missed us by 2.5 miles. Close call considering New Mexico’s largest fire ever. Hopeyour little one is doing well….teach him to shoot straight….tight shot group.

      • Ray Hawkins says:

        Morning Colonel – on a sidenote – am nearly done reading Howard Wasdin’s book “Seal Team Six”. Quite some interesting comments that gives me new perspective on what happened in Somalia (thanks a million to Bubba Clinton and Les Aspin). I wonder how much guys like Wasdin and others must “clear” before writing books like this. Some of their observations come across as cautiously expressed……

        All the respect in the world to folks like Wasdin. Must have strong asshole muscles to handle high pucker situations….. 😉

        • Funny you should mention it. I wrote a book sometime ago titled ” On the Edge of Hell”….it was an in depth book on Special Forces Operations in Vietnam ( in the 70’s) and drug interdiction raids in Colombia in the 80’s. I took it to TCU to have it tweaked to make it flow well and critiqued, They changed nothing except some punctuation thingies. However, I did not get permission to release some of the information until April of this year……it was that highly classified. I have to edit just two things and then I can publish. Trying to find an online publisher now. But to answer your question…..we must “clear” everything and be very careful of how we “insinuate”….(that is the tern that was used from the State Department on my book)…

          As to the pucker factor…..just allow me to say that on several ops…….you could not have driven a ten penny nail with an air wrench into me… I can speak to pucker factors.

      • Ray Hawkins says:

        Colonel – heard rumors that MOH recipient Sal Giunta may have re-deployed to Afghan and died yesterday in a firefight (and was defending other special forces troops). Any idea on this one? I though since after Vietnam MOH’s weren’t sent back to theater any more?

        • They can go back as a volunteer at anytime. But I have not heard this. Will inquire.

          • Ray Hawkins says:

            Am being told it was a different Sgt. Giunta…..RIP for him though…..there was some Special Op yesterday that didn’t end well….

    • Ray Hawkins says:

      And this:

      Moody’s: Abolish the debt limit

      • This is interesting-Kinda seems strange for Moody’s to suggest this-all I can say is not a chance unless we had a balanced budget amendment and a written in stone amendment to spend a certain % to pay down the debt. At least now they have to do something, to go over this limit, which alerts the sleeping public. JAC comment about Congress having to approve borrowing on a bill by bill basis also seems relevant to this discussion.

    • as to your number 4, specifically the elimination of separate branches of the military, I don’t know how that would work logistically, and there can be solid arguments made towards both sides of this, but I have two complaints one for and against the elimination of separate branches.

      (for elimination) Wasn’t there something recently where the Marine Corps didn’t want the Army to use its camouflage? What is wrong with this? They are on the same team. I dislike how the separate branches have to use their own equipment and how one branch will phase something out while another will keep it, I can see how different units would use something differently, but logistically it seems wasteful.

      (against elimination) What would happen to the Army Navy game?

      • Ray Hawkins says:

        @Naten – that is a vexing problem because we’d be down to one service academy (unless we eliminated those also). We could turn it into an alumni game I suppose.

    • Ray

      Mr. Obama flat out lied about the 80%.

      Was his general point that a majority support a balanced approach valid? YES!

      But just imagine what Politicfact would have said if say ……….oh perhaps Beck had made that statement.

      Now as for public support, Mr. Obama also said a week ago that the general public doesn’t have a clue about this issue. Then he said the public is on board.

      Also notice that the poll questions don’t accurately reflect the situation, they only play off political rhetoric that has been “fed” to the media in advance.

      The R’s, however, are also lying when they only refer to those who want the budget cut.

      As I have said before, the R leadership has been stupid on this issue. The D leaders did a much better job of battlefield preparation. The R’s did virtually nothing.

    • “Additionally, much as a I despise Moody’s and S&P – it is erroneous for USW to claim they are irrelevant – the problem is they are very relevant.”

      Absolutely! But the relevancy is not the value of their service as an adviser for potential investors in US debt. Their relevancy is the bald faced lies they publish intended to keep investors buying our paper. It’s the folks who get commission on handing our paper who need the AAA credit rating. THEY get commissions for handling the paper based on its face value. They have no risk (unless they also hold some paper) but if investors quit buying the paper, no paper-flow, no commissions, business suffers.

      If you and I conducted our borrowing business like the United States Congress, we’d have a credit rating of zero. Nobody in their right mind would invest in a borrower who’s level of debt is in a perpetual state of growth.

      It’s almost a certainty that the so-called rating services for US creditworthiness have little concern for folks who HOLD the increasingly worthless paper, only in the folks who get commissions on piles of paper that cross their desks. Those very same folks sang the siren song that dragged trillions of dollars down the hole in over-rated housing mortgage securities. Now that government has swept THAT particular thievery under the rug, what makes anyone believe that the same ratings services are now magically trustworthy?

      The US AAA rating is a scam, has been a scam for a long time.

      “(4) Significant and pervasive and deep cuts in spending . . .”

      Stone Simple Task: Pick an unconstitutional department of government and notify all employees that, “next Friday is your last day. You will continue to receive a paycheck on the regular schedule for the next ten years. One year at 100%, next year at 90% . . . final year at 10%. Please use this money and newly financed spare time to get yourself an education in a independently self sufficient skill to replace your no-value added career here with the US Government.”

      Close their offices. Auction off the furniture, sell the buildings, cars, and computers. Shut off funding for all budget items over and above the graduated salaries cited above.

      A wonderful thing happens immediately. The daily operating costs for that department disappear tomorrow. Their economy and liberty killing activities disappear tomorrow. The growth of that department stops . . . in fact, all expenses associated with its support probably drops immediately by half and totally disappears in ten years.

      Spending of taxpayer dollars to “retrain the unemployed for new jobs” has been a favorite canard of the government for as long as I can remember. Okay, if it works for the laid off oil platform worker, it works even better for a laid off bureaucrat.

      I’d start with Department of Education, Department of Energy, and Department of Agriculture.

  3. Good morning, Stella meister………..Your item number one……cool. But you don’t have to eliminate the defense workers. I have absolutely no problem with being an arms manufacturer to the rest of the world. Keep our people employed. Bring our troops home and sell arms and ammunition abroad. Your item number two….Why stop at 50%? Your item number three and four……cool with me,. Your item number five…..I am cool with closing loop holes PROVIDED you make it a flat tax on everybody. No one is immune. Do away with the progressive tax. The 47% should pay….period. The numbers have already been run. A 15% flat tax on all corporations and a 10% flat tax on ALL individuals and this government, even in today’s standards, is rolling in money. Furthermore, I think that you are too conservative in your approach….make ALL and I mean ALL trade equal. There is NO trade imbalance. NO trade deficits. Your item number six…..You do not need to target cuts in the entitlement program if you have a balanced budget amendment. You do not need to target anything. Living within ones means becomes decisions of priority.

    However, this dumb old Colonel who knows nothing, is also prepared to call the bluff. Do not raise the debt ceiling. Everyone will still be paid. The troops, social security, interest on debt…..there will be no default and there will not be rioting in the streets.

    See? I was even more draconian than you were. I like it.

    • I have absolutely no problem with being an arms manufacturer to the rest of the world. Keep our people employed. Bring our troops home and sell arms and ammunition abroad.

      Good point. I yield on that one.

    • I like that also Colonel.

      But I do not want the Debt ceiling raised. No way. No how.

      And take us completely OUT of the U.N.!

    • I’m not convinced that reducing the defense budget is a wise/helpful thing to do. That is ONE activity for which the government has a constitutional duty. Further, it’s an expense that CAN be modulated on a year-to-year basis depending on current needs.

      Department of Defense is necessary in the current world environment. At the same time, the military needs to be used for killing bad guys and breaking their stuff . . . and only when shown to be a threat to the security of our citizens. The secondary effects of Defense Department activities are value added jobs.

      Virtually all other departments of government destroy value, they grow every year. Their work product attacks liberty of honorable citizens and sucks investment money out of the economy. See Bastiat’s discussions of “plunder”, “philanthropy”, and “proper function of law”.

      Click to access The_Law.pdf

      Check out Article I, Section 8 of the Constitution. What would the federal budget look like if they were faithful to their constitutional charter?

      Bob . . .

      • PeterB in Indianapolis says:

        I am fine if you don’t want to cut the Constitutionally mandated DEFENSE budget. However, you must consider how much of the defense budget is actually used for DEFENSE and how much of it is used for invading countries which we have no business invading, having our military bases in foreign countries where we don’t need them to be, etc. I would strongly suggest cutting EVERYTHING from the “defense budget” that isn’t for Constitutionally mandated defense of our country.

  4. Well Ray I don’t know exactly what demographic population was polled but I consider my family middleclass and I sure as hell don’t support a tax increase. As a matter of fact I believe the tax code should be changed from the progressive wealth redistrubution beast it is into a fair tax in which the other 47% pay their share. I agree with the Colonel as well. Corporations should pay their 2-bits.

    I get so pissed when I look at my paystub. I have already payed in 16,000 in fed taxes this year (including SS and Medi). My wife somewhere around 7,000 I’m guessing. Sometimes I wonder at where the numbers are gathered polling for who bears the brunt of the tax burden in America. I still have to look forward to another half a year of fed taxes plus property and school taxes…not to mention all the other nickel and dime telephone, electric, gas taxes, sales.Blah blah blah blah blah. What say do I have in where or what my “tax money” is funding? Wars I don’t agree with? Useless Government Agency employees paychecks? Shrimp running on treadmill studies? Aid sent to foreigners that give a shit less about my culture? WTF…

    I budget to live within my means and the government needs to as well or be held accountable for their actions which border on the criminal in most instances in my book.

    • Ray Hawkins says:

      @TexasChem – ftr I do not support any tax increase whatsoever. I don’t look at my paystub often because I get too angry when I do so….

  5. USWep,

    legislation that requires the federal government operate with a balanced budget, and ensures that there is not a clause that will allow that legislation to be ignored whenever politically expedient to do so.

    The age old contradiction:
    You want a body to create legislation upon itself so to limit itself in creating legislation.

    But if such a body has the power to create such legislation, it de facto has the power to create other legislation, including such legislation capable of reversing any previous legislation.

    In other words, you are willing to legitimize counterfeiting and stealing, as long as a charade entertains you first.

    • Black Flag

      My friend, you once again fail to recognize the difference in our form of Govt.

      I agree with your statement that it is ridiculous to expect Govt to pass legislation that constrains it. It can simply pass new legislation that removes that constraint.

      But with Constitutional govt it is NOT the Federal Govt that passes this law. It is the STATES with public input.

      If an AMENDMENT is approved the Congress/President will have tremendous pressure to comply. Failure to comply and defiance of any subsequent SCOTUS ruling would create a true Revolutionary moment. One that Govt will avoid for fear of losing ALL legitimacy and thus power.

      The potential weakness is not in the govt over ruling itself, but in the people not caring enough to force compliance, through the power of the States.

      • JAC,

        Lincoln proved that a piece of paper is no match for an Army.

        The belief that waving a piece of paper is vital to establishing rightful rule misunderstands the concept of “rulers”.

        All that matters is legitimacy – and as long as more than a few give legitimacy to an action, no words on paper will refute them.

        As point out long before, either the Constitution was irrelevant or worthless – because there existed a Constitution and this is what you got.

  6. USWep,

    The reality is that the American public is against raising the debt ceiling, against raising taxes to deal with the deficit (although I will touch on that a bit more), and in favor of cutting spending in Washington.

    That is not the question nor the problem.

    The question and the problem:
    Where and Who will suffer the cuts in spending

    Everyone is actually in favor of cutting spending, as long as it is not there spending that gets cut.

    Thus, no spending will get cut since no one wants their spending cut.

    This is unsolvable without a collapse or default.

    • Ray Hawkins says:

      That is because there is too much scare tactics happening to frighten people into thinking that they will suffer some travesty/tragedy if “their spending cut” gets enacted. Sure – if you take my trash once every two weeks instead of once a week then I will see/feel that. But I don’t think that is purely what needs to happen.

      • Ray,

        And you accidentally highlight the other component of the intractability of the issue.

        We are not talking about garbage collection costs, yet this is where everyone -for many reasons- feel most comfortable in dabbling.

        Big numbers boggle people. So they fret about little numbers, and ignore the big ones.

        So lots of people want to talk about cutting the margins – which will not make a dent.

        The mindset: a cut garbage collection will resolve $1.3 trillion furthering into debt.

        The question is not about these trivial matters.
        It is about the real problems regarding base entitlements – which are now fused to the American core psyche- and the military – which has always been fused to American core psyche. These will not be touched, but this is where things must radically change.

        Again, what program do you believe can be cut that will make financial difference? Not fictitious, but one that the People will actually vote to cut…

        The answers: None exists.

        • Ray Hawkins says:

          “Vote to cut”……..we lack the will to do so. We’d rather pretend that things will magically get better – when the result from inaction may be a far more bitter pill.

  7. 80% ? Who did they poll? I know exactly 1 person who would like to pay more taxes: Mathius!
    Meanwhile…Gold just hit 1600

    • Mathius™ says:

      1600? I’m RICH! WAHOO!

      Ok, Anita, just send me your tax bill and I’ll take care of it for you. (you have to fill out all the forms, etc, I’m not doing your taxes, just cutting the check). 🙂

  8. Charlie

    allowed Goldman Sachs et al to not only reward themselves with record bonuses and profits (on the backs of American taxpayers), they continue to ship American jobs overseas

    These two things are not correlated.

    American “jobs” going overseas is a testament that the American worker is too expensive – and that expense line includes government tax and regulation on companies on behalf of such workers, and not just their pay scale.

    For those of you who “claim” to be against corporatism, why isn’t there any angst about that? (or should they be “free” to find less than minimum wage workers wherever they want?)

    Of course they should – or the alternative is NOT them staying and putting up with your bizarre understanding of economics, it is them stopping providing you the goods they produce.

    Your choice is they find the most economical way to produce goods for you, or they stop producing. There is no such thing as “Charlie’s way” – that they will produce goods that no one wants to buy because they are too expensive.

    A question for Republicans who voted for the bailouts: If Wall Street was too big to fail, why isn’t the United States of America?

    One is a company, the other is a nation. Nations do not “fail” economically – they always exist within Economic Laws.

    It is not a failure of economics that you become financially disrupted if you cannot pay your debt. It is because of economics such outcomes occur.

    Indeed, it is probably no exaggeration to say that economics developed mainly as the outcome of the investigation and refutation of successive Utopian proposals – if by “Utopian” we mean proposals for the improvement of undesirable effects of the existing system, based upon a complete disregard of those forces which actually enabled it to work. – Hayek

    In other words, economics refutes people like Charlie, who proclaim the use of violent coercion to “fix” the economy to make it “better” for him.

    Since these people do not understand the actual forces that created the circumstance he rages against, his solutions are dangerous as they will tend to make the situation so very much worse.

    . I doubt our potential default August 2nd will create a similarly presented crisis.

    The US government has defaulted many times before in the past

    The Continental-Currency Default
    The Greenback Default of 1862
    The Liberty Bond Default of 1934
    The Momentary Default of 1979

    …and with no surprise, the United States is still here, and also with no surprise, few people today even know of these past defaults.

    Charlies skeptical insight here is probably quite accurate.

    1) an immediate withdrawal of our troops from both Iraq and Afghanistan

    A great idea that will NOT happen.
    They will be “adjusted” to somewhere else.

    Global Empires do not retract voluntarily – they have historically retracted catastrophically. There is nothing special about the US that makes it immune to such dominating historical precedent.

    2) an immediate significant scaling back of all foreign aid (as much as 50%).

    A great idea that will NOT happen.

    Israel is by far the single largest recipient of such aid, and that will not be disturbed voluntarily.

    3) putting an end to lifetime healthcare and pensions for all elected officials;

    A great idea that will NOT happen.
    Government exists for the government, and not the people.
    They will be the last ones that suffer cuts.

    4) significant term limits that might help preclude politicians being owned.

    Wholly irrelevant and pointless.

    5) an end to all corporate tax loopholes so they are no longer a part of the 47% who don’t pay taxes (which no one here seems to point to).

    Just eliminate corporations.

    6) Then we can start talking about cutting other entitlement programs and a balanced budget amendment.

    Entitlements account for the vast majority of spending. If one cannot start talking about them now, it is already too late.

  9. Marco Rubio on Face the Nation
    By Doug Powers • July 17, 2011 05:41 PM

    **Written by Doug Powers

    Is there anybody in Washington at the moment who articulates the conservative philosophy more effectively than Florida Senator Marco Rubio?

    Rubio was on Face the Nation this morning and dismantled each one of Bob Schieffer’s points, counter-points and regurgitated talking points. I wish more conservative Republicans in Congress could communicate this clearly:

    You need to go to the link to hear the interview-As JAC has noted-there is a huge debate going on in the republican party-a debate the Tea Party initiated -I have no problem bashing the republican old guard-they are not fiscally conservative-but when you bash the Republicans without making a distinction between these two-I think you are hurting the movement for smaller government- we have new people who are fighting for fiscal responsibility-and I hope and pray that we will all have reasonable expectations of what they can achieve when they are fighting the old guard and most of the democrats-we need to support them and continue to vote out the old and bring in the new. Because all the talk aside-there isn’t gonna be a revolution-riots in the street-we’re having some of those already-there just not the typical form of riots-it’s people, mostly teenagers simply robbing and beating up people. And they aren’t showing their anger in support of smaller government but against it.

    • I agree V.H.. The new Tea Party crowd remember how they got elected. And it was NOT to raise the damn debt ceiling. It was to cut the size of government down.


      But they will. They are already showing they will.

      • I don’t think they have forgotten either-I just think they are out numbered-and I am afraid the people may be too impatient and not give the idea a chance to work. Although I agree with BF that people generally don’t want their stuff cut-I believe people are scared enough of the country falling that they are ready-at least a good portion of them -to sacrifice- because they see total disaster coming.

  10. Your right Ray-what is up with the font-it is super small-I have to keep using the Zoom, over and over-to be able to read the words.

  11. I have to go to a School Board meeting tonight to protest their ‘New’ dress code. They are trying to change it to a virtual Uniform.

    Only dress or dress casual shirts. Only khakis or new blue jeans. no rips, tears, or even so much as frayed. NO logos on shirts except for SCHOOL logos(can you say money maker rule?). No hoodies.

    My main problem, aside from the fact that this is a public school system, is who do they expect to finance this? A lot of parents have already BOUGHT school clothes. And the others cannot AFFORD to buy a whole new wardrobe for their children. Folks like ME for instance.

  12. SK Trynosky Sr. says:

    An interesting tidbit. The US Army has announced that it will put off the drop dead date for conversion to the new Class A Blue Army uniform for 18 more months. The reason reported by “Army Times” is that there is a lack of manufacturing base in this country to outfit the entire US Army, Guard and Reserve. By law, the uniform, at least initial issue, must be of US Manufacture. In the interim, the wearing of the old (green) or new Class A’s will be allowed. This ties in nicely with another report I had read last year where 60 plus percent of all Army boots on the feet of our soldiers (private purchase) are manufactured in Korea. In the event of another Korean War, I assume it is the American troops that will go into combat wearing sneakers (probably made in Vietnam) while the North Korean and Chinese troops will be well equipped.

    This from a country, mind you, that with less than half the population managed to outfit 16 million soldiers, sailors, marines and airmen in WW 2, build 250,000 aircraft, fifty aircraft carriers, 54,000 Sherman tanks and 6,000,000 M-1 rifles and another 6,000,000 M-1 carbines.

    What, if anything, is wrong with this picture?

    • Totally sad-Trade great-but this idea of globalization to the point where we are dependent on other countries for things we need to survive-is just crazy.

  13. The Latest ‘If We Don’t Raise the Debt Ceiling’ Scare Tactic
    By Doug Powers • July 15, 2011 10:30 AM

    **Written by Doug Powers

    Harry Reid has decided to ratchet up the scare tactics a notch. We’ve already been told that if the debt ceiling isn’t raised and taxes increased, government checks might not go out, but now the schools will close:

    To fall for these scare tactics you have to believe that refusal to raise the debt ceiling means that the government will suddenly stop taking in revenue, which obviously isn’t true (you’ll notice that at no point have Dems tried to frighten Americans by telling them that if the debt ceiling isn’t raised there won’t be enough money to fund the IRS — but on second thought maybe that should be the Republican talking point).

    Human Events:

    Once again, courtesy of the Examiner’s Mark Tapscott, here are the hard numbers, in monthly amounts, for anyone foolish enough to buy into Democrat scare tactics:

    Federal revenue: $200 billion per month

    Interest on the national debt: $29 billion

    Social Security: $49.2 billion

    Medicare and Medicaid: $50 billion

    Active duty military pay: $2.9 billion

    Veterans affairs programs: $2.9 billion

    Education funding: $11 billion

    All of that core spending adds up to $145 billion, which means that in the event of a debt limit, the government can pay it all and still have $55 billion a month left over.

    Note also that this Tweet absolutely confirms Harry Reid is a liar, rather than simply an idiot, since he has previously insisted that Social Security “is in great shape for many decades… Today it is not a problem.”

    Call the bluff, Republicans!

    As August 2nd approaches, Democrats will be sweating like John Kerry during a luxury tax audit. Not because they fear default, but because they know a Y2K moment for the general population is approaching — that morning when everyone wakes up, looks around, realizes the world didn’t end and exclaims, “that’s what we were freaked out about?”

    Per these figures we have enough money coming in monthly to handle- not raising the debt ceiling-I have one question-Do we actually have to miss a payment for Moody’s to change our credit standing or are they threatening to change it period, if we don’t raise the debt ceiling with a plan?

    • V.H.

      Its getting to where we can’t trust anyone to present the facts.

      During the Fed Chairman’s testimony on Thursday it was shown that the monthly income is around 174 billion, NOT 200 billion.

      The list of expenditure does not include contractual obligations, that is payments to contractors and employees for work already performed.

      As I noted below, it also ignores the daily cash flow. We exceed the income in the first 5 days at which time we must rollover several billions in expiring debt (treasury auction).

      The debt ceiling MUST be increased. But I would not do so for the full year or two years the Dems want. Make it 4 to 8 months, to coincide with a Federal accounting quarter.

    • V.H.

      To answer your question.

      They could reduce our rating before the date if it appears there is NO chance of resolution. I don’t think they will unless the date is missed.

      BUT……………… Something NOT mentioned by the Dems or media in this whole thing.

      Moody’s has threatened to reduce our rating if the DEFICIT and DEBT is not reduced in the “NEAR TERM”.

      This was also discussed in the Fed Chair’s testimony on Thursday. He clearly stated on numerous occasions that we need to raise the debt limit to prevent increasing our costs and disrupting a mediocre economy, AND then we need to make substantial reductions to both DEFICITS and DEBT.


      • Both the deficit and the debt-hmm-wonder why they aren’t telling us that!!!

        I read somewhere the other day that we hadn’t decreased our debt since 1960(I believe) and that we have consistently stayed 2 points higher in spending than we have received in revenues.

        • V.H.

          Here is a graph that shows tax revenue and expenditures of Fed Govt as % of GDP.

          At the bottom is a summary of the avg for each administration since Reagan. We have exceeded the 2% number several times. On an administration basis Reagan and Obama are the worst.

          • I’m sure your post the graph in a moment 🙂 But what I took from the article was that it was simply policy to raise the debt -that it is completely okay to do so-and what I ask myself has the tax rate got to do with it-it seems no matter the tax rate the spending always exceeds the revenues.

            • V.H.

              The tax rates have NOTHING to do with the Debt Ceiling.

              In fact the debt ceiling is a creation of the PROGRESSIVES.

              Up until about 70 yrs ago Congress approved borrowing on a bill by bill basis. When Govt programs exploded the Progressives thought it would be easier to just raise the TOTAL debt limit periodically.

              And it HAS been used as a political football by BOTH sides during the last 70 years. Even going right up to the midnight deadline or passing short term extension before raising the limit a few days later.

  14. USW

    Ray is not the only one who has the FONT changed. I can barely read the print in “bold”. The Font size is much smaller today than usual.

    Hard to read.

    • Ray Hawkins says:

      Someone asked me the other day why I have not gunned for higher level (read higher paying) positions in my field. While the answer can be complex – I’ll simply state I am unwilling to do more work than I do already so I can pay even more taxes than I already pay.

      I crave a candidate who will show some backbone and make the hard leadership calls that need to be made.

      I do not set all the blame at the feet of Obama. But I do hold him responsible for being more of a part of the problem than solution.

    • Agreed. The font is hard to read. I had to increase my browser zoom just to prevent me from squinting.

  15. USW

    I’m with Ray on this issue.

    We MUST raise the debt limit in the short term or we will simply be adding to our deficit and debt without getting anything for it. Just more money to the investors and more monitization of the debt.

    Those folks throwing around numbers showing we have enough to prevent default are not looking at daily and weekly cash flow. In fact we are already borrowing money from various federal programs to pay current expenses. For example, Treasury has been using Fed Retirement funds to pay other bills. That means these funds must be replaced, in effect a loan.

    Failure to extend the debt ceiling and paying the debt due will result in shutting down about 40% of the Federal Govt, IMMEDIATELY.

    Now just think what that will do to an economy that has only a 1.5% growth currently and 30% of which is Fed Govt expenditures.

      • How the man can say things like “move beyond politics as usual” and “partisan agreements” with a straight face-just amazes me. Please tell me Mr. President-if default is such a problem-why won’t you REALLY agree to a short term agreement. And if we must cut spending, which you keep claiming you want to do-why are you against a balanced budget? If we have to cut the deficit and PAY off the debt-what part of having to cap just about everything confuses you?

        Could it be that you are nothing more than a “fake walking movie production of a man” spouting the convenient words and acting all tough with your “call my bluff” silliness. In case you aren’t aware of this fact-You aren’t John Wayne and the act is getting old.

        Okay rant over for now.

        • Good rant! I wish you could attend a press conference and say it to his face!

          • Okay, if he shows up here I will try to do so-but you may have to bail me out of jail-it is much easier to edit your rants when they are written down. 🙂

      • Ray Hawkins says:

        @Kathy – sorry for my language – but these guys need to get a fucking clue.

        “Ensuring dignity in retirement”?


        Talk about empty rhetoric.

        The failure to exercise fiscal restraint and accountability has left this Country on life support.

        Should I start apologizing to my kids now for how screwed a Country they are going to grow up in?

        • Ray


          Or you could do what I did. Every time I see them I thank them for allowing me to live a lifestyle I choose at their expense. I also tell them to make sure and let my grandkids and great grandkids know I thank them as well……….. 🙂

          • I, too tell my kids often how they won’t have it as nice as my generation has it. When they balk at attending a tea party rally or get tired of me passing on articles to help educate them as to the realities of their futures, I just point out that putting their heads in the sand is exactly what got us here in the first place.

    • Did I read correctly.. JAC says we MUST raise the debt ceiling? Our JAC? The president of VDLG? Do you really think they will use the couple trillion to pay the bills? I’m seeing a major fail. Raise the debt ceiling and this time next year we’ll be in the same boat with a bigger hole in the hull. So what if 40% of the govt gets shut down! Our credit rating has slipped anyway. States, businesses and families have learned to get along with less. Why is it any different for the Fed? There will never be a good time to quit digging. If not now, then when JAC?

      • Anita

        Your confusing authorizing borrowing to cover the expenses Congress ALREADY approved versus the approval of future spending.

        The Debt Limit simply authorizes Treasury via the Fed to borrow money to cover the bills they ALREADY approved. It does not allow the Administration of Congress to increase future spending, or to even continue spending.

        If 40% of the Govt were to shut down that means 100% of everything other than paying the immediate debt interest, soc sec and military. There would be an avalanche of “unemployment” claims against State and federal accounts. Bank mortgage loans and credit card debt would start defaulting at even greater proportion, depending on how long the shut down lasted.

        Getting by with less is not the same as getting by with NOTHING.

        While the ceiling needs to be increased I reject the President’s claim it should be extended to 2013. As I said,, extend it long enough to deal with the 2012 budget. Meanwhile the R’s need to take their argument to the public to prepare for the future showdown.

        • I’m not confused about the debt ceiling, but I am confused about your support of raising it.
          By BF’s wisdom, the end result is default. Let’s get it on!

      • Anita

        There is about 14 million unemployed in the USA today. Shutting down Govt would ADD another 2 million over night.

        This does not count the State and local govt employees that might lose their jobs due to halting federal funding.

        • In my nice voice..SO WHAT? We crash, burn and’s inevitable.

          • Anita

            I have never been an advocate of the idea we should crash and burn. I do agree we should prepare for that but I firmly believe we need to fight like hell to prevent it from happening. The time is running out but there is still a remote possibility. Therefore, I will still fight rather than just give in to BF’s “inevitable”.

            Besides, think of the “reboot” option. We are not prepared to reboot. If collapse happened today who do you think grabs the reins of power?

            • I really don’t know JAC. I bet you could gather 5-10 different answers to that question. My guess is that the current president and his cabinet would stay in power until the next election anyway.

  16. Get Ready for a 70% Marginal Tax Rate
    Some argue the U.S. economy can bear higher pre-Reagan tax rates. But those rates applied to a much smaller fraction of taxpayers than what we’re headed for without spending cuts…

    • Ray Hawkins says:

      Higher rates?

      Whiskey Tango Foxtrot.

      Lemme see here – keep taking more of my money via taxes means I invest less and I spend less as a consumer.

      Great idea.

  17. 😐

  18. Ray Hawkins

    You raised the effect of increasing marginal rates. Thought you might like to see this graph regarding the change in top marginal rates at revenue.

    There is a problem with the data, I think. But the relationship is very interesting.

  19. Why aren’t we seeing this in print, over the airwaves, over and over and over?

    “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the US Government can not pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. Increasing America’s debt weakens us domestically and internationally. Leadership means that, “the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”

    — Senator Barack H. Obama, March 2006

    • As a senator in 2006, Joseph R. Biden Jr. lamented “the tsunami of debt created by the policies” of the Bush administration, including big tax cuts. Now, as vice president, Mr. Biden is trying to persuade Republicans to support a much bigger increase in the debt limit.

      In a scrap over the debt limit in 2004, Representative Steny H. Hoyer of Maryland, the No. 2 House Democrat, said, “The immoral, intellectually bankrupt fiscal policies that we have been pursuing for the last four years resulted in this request for a gargantuan increase in the debt.”

      The increase then was $800 billion. The White House is now seeking an increase of at least $2.4 trillion. That would lift the limit to at least $16.7 trillion, about twice the level set in 2004.

  20. Does Rahm Get It? Emanuel Lays Off 625+ Public Workers In an Effort to Close Budget Gap

    * Posted on July 18, 2011 at 3:05pm by Becket Adams Becket Adams

    Chicago Mayor Rahm Emanuel sent pink slips to up to 625 city employees last week and he plans to privatize many of those jobs in order to close Illinois’ $30 million budget gap, the Chicago Tribune reported.

    Nearly 130 seasonal transportation workers will be told to leave immediately.

    According to the Tribune, “Emanuel said he intends to get private companies to clean the city’s airports and libraries, work now done by city employees. Operators at the city’s water-bill call center and employee benefit managers also will see their jobs outsourced. Those union workers will receive 30- and 45-day layoff notices.”

    Emanuel followed through on his threat to lay employees off because, he said, the unions had failed to offer concessions or cost-cutting measures that would help close a budget hole created by an earlier deal with City Hall for unions to take unpaid days off.

    Could it be that Rahm Emanuel is cleaning house? Is he really removing public sector jobs and privatizing them?

    The Tribune quotes Emanuel as saying, “It has been two weeks and despite ongoing talks between leaders of organized labor and my administration, none of the changes yet have been embraced or agreed upon.”

    “My duty as mayor is to protect our city’s taxpayers … not to protect the city’s payroll.”

    Union leaders said Emanuel never set a hard deadline for them to present their money-saving ideas and, according to the Tribune, “did not make serious attempts to negotiate.”

    But should this come as a surprise? If anyone knows about the stubborn obtuseness of union leaders, and their propensity to not concede on monetary issues, Emanuel would. Perhaps the mayor figured that a preemptive strike would be far more effective than spending hours sitting around a table.

    “Mayor Emanuel’s decision to lay off these workers and privatize services without really engaging in the process is both perplexing and disappointing to all of us,” said Jorge Ramirez, president of the Chicago Federation of Labor, in the Tribune article.

    “When there’s a fire, you don’t pour gasoline on it. You pour water on it.”

    Henry Bayer, the executive director of the American Federation of State, referred to Emanuel’s approach as “scattershot.”

    “If the mayor were serious about attempting to change any work rule, he would have taken the appropriate measures to engage in such discussions,” Bayer said in a statement.

    “The fact that he has never done so is clear evidence that his attempt to blame union work rules for the city’s massive deficit is mere public relations gimmickry,” said the Tribune article.

    With Emanuel reigning in the unions, Chicago will no longer be responsible for custodial services at libraries or airports. Additionally, according to the Tribune, “managing benefits and staffing the water billing call center will no longer be the city’s responsibility. 75 percent of the seasonal work force at the Department of Transportation will be dismissed as well.”

    Labor leaders are still expected to sit down with Emanuel’s administration later this week. Those talks will likely be geared toward cost-savings in the 2012 budget, which is expected to be short $650 million or more.

    Therefore, Emanuel has proposed additional solutions:

    1) Salaried employees receive the same number of sick days and holidays as hourly employees

    2) Workers doing the same job would get the same pay, no matter which union they belong to

    3) The city would eliminate rate differences for driving different vehicles and operating different equipment.

    “Emanuel inherited the $30 million budget shortfall from former Mayor Richard Daley, who balanced his final budget by including savings the city would have seen if unpaid days off continued through the end of the year. But Daley did not negotiate an extension of the furlough program with the unions before handing the reins to Emanuel,” reports the Tribune.

    Emanuel rejected unpaid days off as a solution, saying they hurt employee morale and fail to deliver the anticipated savings.

    Adding more pressure to the unions, Emanuel announced last week that he had salvaged $20 million of the $30 million in savings by not filling up to 200 vacant jobs and by turning a city-run community health clinic system into a partnership with a federal health care program.

    Turning over city-run programs to the feds? Uh-oh.

    “The layoffs will save an estimated $10 million to $12 million for the rest of the year,” Emanuel said in a report from the Chicago Tribune.

    Labor leaders are still prepared to negotiate in good faith and share Emanuel’s sense of urgency, Ramirez said. The layoff move, however, “complicates things.”

    Emanuel also said he remains open to partnering with labor and will continue to look for “better, smarter, more efficient and cost effective” ways to deliver city services.

    There are two possible conclusions to this story. Either Rahm Emanuel, like the rest of America, has realized that in order to control state budgets, the unions must be brought under control.

    The second possibility is that Emanuel, in his typical strong-armed way, has decided that the unions need to be reminded of who’s really in charge. Laying off 625+ union workers seems like an awfully good way of driving this point home.

    Which conclusion seems most likely?

    Okay it’s not about the debt ceiling but it is about a democrat’s handling of debt-Nice to see how much this Dem. cares about the unions. So much better to lay off 625 people than to make them pay more of their insurance and retirement.

  21. Then we have this!

    July 18, 2011
    The Progressive Mask Slips
    By Ann Kane

    July 9, at the Aspen Institute’s Ideas Festival, a mask slipped, and the event was recorded on video. We get a fascinating glimpse at hardball politics inside the progressive left, as a quiet network of leftists seeks to supplant part of the Democrat Old Guard, step by step.

    Jonah Edelman, director of Stand for Children, and son of Peter and Marian Wright Edelman, spoke at a seminar on education reform. He was caught bragging (see video — embedded below) about his involvement in undermining teachers’ unions in Illinois.

    It may look like business as usual for so-called education reformers to use lobbyists, PAC money, and influential politicians like Rahm Emanuel to get their agendas enacted, but Edelman gives us invaluable insight into the inner workings of a leftist’s hardball approach to the opposition, in this case the unions. The end result was a power shift in the education platform.

    Edelman operates out of Oregon, where he helped create SFC in 1996 with his mother, who is well-known as the founder of Children’s Defense Fund. Politicians and non-profits have lauded Marian Wright Edelman since she began her program in 1973. The fund proved to be a very lucrative venture for Marian, who studied under Marxist Howard Zinn in the ’60s. Zinn even sponsored her on a summer trip to the Soviet Union as an undergraduate at Spellman College.

    In the July 2011 video, Jonah Edelman speaks about a breach between the usual Democrat ranks and the teachers’ unions in Illinois. Education reform has taken on a new way of doing business in the past few years. Ever since Obama came onto the scene, teachers and their unions have been in the crosshairs.

    In a press conference pushing his stimulus bill in February 2009, Obama brought up education. “But we’re also going to need more reform, which means that we’ve got to train teachers more effectively; bad teachers need to be fired after being given the opportunity to train effectively,” he said, adding that “we should experiment with things like charter schools that are innovating in the classroom, [and] we should have high standards.”

    Obama mentioned “a wonderful new superintendent” (Michelle Rhee) in his national debate in October 2008 with John McCain to transform public education. Since then Rhee has been at the forefront of creating a whole new brand of nationalized government schools: top-down management from the public sector combined with privatization through charter schools. The new left hybrid uses venture philanthropist foundation money along with taxpayer money.

    Jonah Edelman joins this new education model by offering his political savvy as a tool to help change power structures. When the tape of Edelman was first released, it had a limited showing. An anonymous scrubber quickly removed it from its original site. Then a leftist public school teacher and activist, Fred Klonsky, put a link back up on his blog. His brother Mike Klonsky, “Ayers’ partner in the Small Schools Workshop dating back to 1991, briefly worked for Obama in 2008 as his education campaign blogger. When his Marxist-Maoist, SDS, fugitive past came to light Klonsky was thrown under the bus along with Reverend Wright and Ayers.”

    There’s so much to this story — too many names and complex networks to grasp the scope in a short article. So, here are some highlights of the transcription of the video.

    [James Schine Crown speaking] So into that maelstrom [Illinois teachers unions and “incremental pension reform”] walks Jonah Edelman. And you heard a little bit about Jonah, Stand for Children was organized, in, well I guess DC was the first place you worked, but it’s based out of Oregon. And Jonah, through some mutual friends, approached several of us who had been working on this, to talk about how he thought maybe he could help make things different, and he was quite persuasive that he could. And so we’ll move to having him explain exactly what that was.

    [Jonah Edelman] And so our analysis was he [Michael J. Madigan, D-Chicago, Speaker of the Illinois House] was still going to be in power, and as such the raw politics of it were that we should tilt toward him. And so we interviewed 36 candidates in targeted races and essentially, I’m being quite blunt here, the individual candidates were essentially a vehicle to execute a political objective, which was to tilt toward Madigan. [snip]

    So the press never picked up on it. We endorsed nine individuals, and six of them were Democrats, three Republicans, and tilted our money to Madigan, who was expecting that because of Bruce Rauner’s leadership, and Bruce is a Republican, that all of our money was going to go to Republicans. That was really as show of, an indication to him, that we could be a new partner to take the place of Illinois Federation of Teachers — that was the point.

    Luckily, it never got covered that way. That wouldn’t have worked well in Illinois. Madigan is not particularly well-liked. And it did work. [snip]

    And so essentially what we did in a very short period of time was shift the balance of power. I can tell you there was a palpable sense of concern if not shock on the part of the teachers’ unions in Illinois that Speaker Madigan had changed allegiance, and that we had clear political capability to potentially jam this proposal down their throats, the same way the pension reform had been jammed down their throats six months earlier. [snip]

    So here’s what ends up happening at the end of the day. April 12th, we’re down to the last topic of collective bargaining. It’s been saved for last. It’s the hardest topic. We fully expected that we would, our collaborative problem-solving of three months would end, and we would have an impasse and go to war. And we were prepared. We had money raised for radio ads and our lobbyists were ready.

    Well, to our surprise, and with Rahm Emanuel’s involvement behind the scenes, we were able to split the IEA from the Chicago Teacher’s Union. [snip]

    We’d done our homework. We knew that the highest threshold of any bargaining unit that had voted one way or the other on a collective bargaining agreement, contract vote was 48.3%. The threshold we were arguing for three quarters. So in effect they wouldn’t have the ability to strike even thought [sic] the right was maintained. [snip]

    So in the end game the Chicago Teachers Union took that deal misunderstanding probably not knowing the statistics about the voting history, and the length of day and year was no longer bargainable in Chicago. And we insisted that we decide all the fine print about the process. She [Karen Lewis, head of Chicago Teachers Union] was happy to let us do that. [snip]

    [The result]The unions cannot strike in Chicago. They will never be able to be able to muster 75% threshold necessary to strike.

    This video shows Jonah Edelman’s ability to work the system by scamming the opposition. Somewhere in the process of his moral development, Jonah Edelman learned that this was honorable enough that it could be a public boast.

    Please keep telling me that the democrats in power-care about the people

    • Holy crap! How does the mainstream media not tap into this info? They truly are as bad as the marxists in this story.

      The scary part is how far ahead the progressives are in their schemes to destroy. Do we even have a chance?

    • Who’s telling you the Dems care about the people?

      They’re the flip side of the GOP … bought and sold by big business whenever it wants …. see AIG and subsequent Wall Street bailouts for proof. You need more than that, you’re kidding yourself.

      Leave the political parties. Take the cannoli …

  22. How Much Longer Can Obama Defy Political Gravity?

    posted at 6:16 pm on July 18, 2011 by Karl

    ABC News Political Director Amy Walter wants to know. After noting that Obama’s overall job approval ratings in various polls are seven to nine percent higher than his approval numbers on the economy, Walter observes:

    Obama’s job approval ratings defy political gravity. The only question now, is if they can do so for much longer.

    Psychologists talk about “cognitive dissonance,” the tension that people feel when their thoughts are inconsistent with one another. In this case, it’s feeling as if the president is doing a pretty lousy job on the economy, but still giving him decent (though not glowing) marks when it comes to his overall presidency.

    At some point, psychologists will tell you, relief from the tension comes only when you try to restore consistency.

    In this case, it means that either voters need to start feeling better about Obama’s handling of the economy or they will start to feel worse about his overall ability to handle of his job.

    Walter gives Pres. George H.W. Bush as an example of a weak economy eventually drawing inflated, post-Gulf War I ratings back to Earth. She also cites Ronald Reagan’s 1984 showing as an example of the same phenomenon in reverse.

    However, Nate Silver answered Walter’s question last month, with a better Reagan example. Silver began with an obervation similar to Walter’s:

    Since 1974, CNN and Time Magazine have routinely posed a question in their polls that asks respondents to tell them “how well are things going in the country today”. So far this year, an average of 39 percent of respondents have said things are going “very well” or “fairly well”, while an average of 60 percent have said they’re going “pretty badly” or “very badly”. By contrast, Mr. Obama’s approval has averaged 52 percent so far this year in CNN surveys, against 46 percent disapproval.

    Silver hypothesizes that some of the difference is due to: (1) people still blaming Pres. George W. Bush for the recession; Obama being a first-term president; and (3) Obama having high personal favorability ratings. But on the issue of political gravity, Silver posts a chart showing that the “going well” number and presidential approval have historically gone into near-perfect alignment in presidential election years. That’s why Silver began his blog column with a different Reagan example than Walter used — 1980:

    Mr. Carter — despite approval ratings in the 30s or low 40s — was holding his own against Ronald Reagan. Some polls, even well after Labor Day, showed the horse race to be tied or even had Mr. Carter with a slim lead.

    Mr. Reagan would win overwhelmingly, however, claiming 44 states (even Massachusetts and New York) while limiting Mr. Carter to just 41 percent of the vote.

    How much longer can Pres. Obama defy political gravity? If 1980 is any guide, well into the election season… but probably not all the way to Election Day.

    “cognitive dissonance” BF/JAC-you could use this word as an occasional replacement for “contradictions.” You suffer from the psychological disorder call “cognitive dissonance. 🙂 Unfortunately part of the resolution process can be ” justifying” or “blaming someone else”-so I guess we’ll have to wait and see what happens.

  23. Second best rant of the day! (after VH’s above). Only thing – he supports Harry Reid????

    Wynn CEO Goes On Epic Anti-Obama Rant On Company Conference Call.

  24. USW, did you hack this sign on your way out of NC? If so, kudos!

    Hacked DOT Road Sign Reads “Impeach Obama”,0,881228.story

  25. JAC and everyone else:
    re: raising the debt ceiling

    Let’s go over some facts:
    (1) has the government EVER been constrained by the debt ceiling?

    (2) Does raising the debt increases the odds the collapse will be catastrophic?

    *** The debt ceiling raising, which will not stop until collapse, increase the odds such a collapse will be catastrophic.

    Therefore, any support of raising such a ceiling is .. (fill in the blank).

    • PS:
      The only reason one may support the continued raising of the debt ceiling is one believes he will lose the race to death, hence, win the race to collapse.

      The bet:
      I will die before the reckoning of the debt comes

    • BF

      1) has the government EVER been constrained by the debt ceiling?

      This is true. However it is NOT supposed to constrain the Govt. Its purpose was to make the authorization of issuing debt more efficient.

      (2) Does raising the debt increases the odds the collapse will be catastrophic?

      This is true. However you conflate debt with debt ceiling. Debt is actually incurred via authorization of spending bills. The Debt Ceiling is the authorization to physically borrow the money needed to pay the DEBT that was already authorized. As I pointed out yesterday, until 70 years ago the borrowing authority would have been attached to the spending bill itself.

      Whether incurring more debt today could help prevent catastrophic collapse depends entirely on the political will of the people to use that new debt wisely. Just as the company that gets new credit to restructure and prevent bankruptcy. As opposed to the company that simply spends the newly borrowed money on new jets.

      If our current total debt load is enough to create catastrophic collapse then quite frankly adding a couple trillion to the pile is insignificant. But if that couple trillion could buy the time needed for structural change and preventing such collapse, then why would you not take that chance?

      In other words, adding debt today changes nothing with regards to the chances of a gloomy future, but it does increase the odds of avoiding such a future.

      I do want to remind you and others that I do not believe Congress should increase the limit by the full 2 trillion. We only need to buy enough time to see the results of the 2012 Congressional elections.

  26. I think you all know I prefer something more radical, but if it’s really a choice between these two and anarchy, start building the hanging scaffolds.

    This is why I think Charlie is great.

    Yes, he holds some basic fallacies.

    But often he cuts to the bone.

    And, historically, his prognosis has been dominate.

  27. Therefore, I will still fight rather than just give in to BF’s “inevitable”.

    I smile when ever JAC says this –

    A futile fight wins cut and molded metal on one’s chest, but never changes anything.

    • BF

      That is because YOUR view of inevitable is NOT my view of inevitable.

      • JAC,

        Inevitable is unavoidable no matter how much one denies it is coming.

        Falling without a parachute – with only the hard stop at end. No matter how much flapping, it won’t save you.

        • But we are not talking about gravity are we.

          We are talking about human nature, knowledge and wisdom. We are specifically talking about the political will of the American people. The outcome of that is not as cut and dry as you seem to believe. I have granted you the odds are long at this point. But that does not make the outcome “inevitable”.

          I would be willing to bet that in 1770 the conventional wisdom in America was that the colonies would continue to exist under the umbrella of British rule.

  28. Interesting Morning Joe (MSNBC) … somebody finally said what I think is actually going on across the country (so no need to be worried, USW). Not many people seem to be all that concerned about a default; people are still stewing over jobs (rightly so). This government is so mistrusted at this point, nobody seems to care what comes out of Washington. Hopefully that apathy will turn to genuine revolutionary fury once big business gets their way one more time (which it will down the road) … which is why so many of us believe it is in fact a free market (at least for big business because they don’t seem to have to answer to anyone and they sure seem to get their way whenever they want … $700 billion bailout immediatley comes to mind).

    Let the anarchy begin!

  29. Bottom Line says:

    The bottom line is government power and scope. The reality is that the real battle is between Washington DC politicians and the American people. These two parties, who are both on the same side against us, are playing a high stakes poker game with the our futures. They are not gaming each other. You(voters) are gaming you. And the time has come to fold.

  30. Interesting how this whole topic is debated: “Raise the debt ceiling to avoid default!!!!”

    Why on earth would the government default? If the debt ceiling is not raised, the government still takes in enough money to pay the interest on the debt, social security, medicare, medicaid and then pick and choose the rest. Why on earth would they choose not to pay interest on the debt if it would be such a collosal crisis? Those evil Tea-Partiers. How dare they say things like “the US won’t default if the debt ceiling isn’t raised!”

    Seems to me like the things in danger of not being paid are other government spending items. If you don’t want those to go under, you can argue that, but at least use some honesty in the debate.

    Interesting how forming the debate in this way changes the perspective…

    Another thing. The government takes in more than we did in 2000, right? We had a surplus then and people weren’t starving in the streets, right? So why is it necessary to be spending $1.6T more now?

    • Seems to me like the things in danger of not being paid are other government spending items

      I have thought the same thing, just couldn’t put thought to paper. It’s the simplest way to look at the problem. As I said to JAC above, so what if 40% of the govt gets shut down. Is it a fear of the politicians that their mask will be pulled off and the people will realize that we can get along with far less government?

      • In past “government shutdown events” we were told that only non-essential offices and activities would be curtailed. ?????

        Why does the American taxpayer need to support ANY non-essential job? Part of the answer appears on the front page of USA Today . . .

        Saul Alinsky was the first to popularize the takeover of institutions from inside. The president and his handlers are good students of that philosophy. Every new, permanent addition to government’s hoards of no-value-added employees is one more dedicated servant to the despotic progressive slave holders.

    • JB

      Why would we willingly increase the interest payments if we DO NOT have to?

      Why would we allocate our inadequate income to interest instead of principle or programs?

      • So you’re saying we should not repay our debts according to the contracts? That’s a sure way to make a bad deal.

        If our credit rating drops (it certainly will if we don’t pay interest) then our interest rates will increase. This means we pay more money in interest, thus taking away more money from our economy.

        I’m not saying we should not pay to principle (we should), but we have to address the interest. I thought that was rather obvious…

        How am I wrong?

        • JB

          If we do not increase the ceiling and then try to allocate the income to debt service and a few other programs we will still be DOWNGRADED. Thus increasing the interest on our future debt, the first of which would be issued the same week.

          Increasing the debt ceiling is a non event in the big picture.

          Increase the ceiling then start proposing SPENDING CUTS in legislation passed by the HOUSE.

          Nobody can win a stand off on the debt ceiling. Well nobody except those who would like to see the crash and burn option accelerated to the here and now.

          • I was just making a comment on how the debate is being established.

            I agree with you.

  31. So let me see if I understand this.

    Premise #1. Clear headed thinkers in the United States realize that present trends plotted into the future spell financial disaster for the nation.

    Premise #2. Credit worthiness is a function of risk to creditors . . . a prospective borrower is screened for potential risk and an appropriate “credit rating” assigned.

    Premise #3. The idea of a borrower saying, “no more” to further borrowing should INCREASE probability that the borrower can pay back present obligations as agreed. I.e., restrained borrowing lowers risk: unrestrained borrowing raises risk. I’m pretty sure that’s what happens to me if I have a dozen maxed out credit cards!

    Premise #4. A nation is truly dedicated to bringing acquisition of new debt under control, would not care if their credit rating went into the tank.

    Premise #5. If a credit rating is worth the paper it’s printed on, it would reflect the intentions and ability of the rated creditor to honorably service it’s debt.

    It would appear that our credit rating has been much too good for far too long. I suggest that maintenance of a stellar rating was INTENDED to increase our debt even in the face of decreasing revenues. If I were running a house like Moody’s, the passage of Obamacare would have knocked points off the US credit rating just for it’s demonstrable lack of economic sanity.

    This all smells like a Frankfurt School philosophy for trimming “arrogant, self-sufficient, honorable nations” down to sizes attractive to Frankfurt School graduates (despotic progressives). To my way of thinking, the best thing that could happen to us is the downgrading of our credit rating. For only in the face of real adversity (virtual bankruptcy without having to disburse assets) will the true nature and intent of our nation’s leadership become clear.

    Ladies and gentlemen, I can think of no better way to flush the most seditious members of our leadership out into the open. Believe me, it goes much deeper than Pelosi, Reid, Roberts, and Obama These four horsemen of the apocalypse are but the very tip of a massive legislative, judicial and administrative iceberg that is going to put a hole in the ship-of-state if we don’t change course and speed VERY soon.

  32. I don’t know why it won’t let me copy and paste-but it will not. 😦

  33. The proposed Balanced Budget Amendment supposedly caps federal expenditures at 18% of GDP. This coincides with the recent historical avg for total Federal Revenue……… counting all sources. But notice in the graphs on the following page how the total Fed Revenue was actually far below this level until 1960’s. I think you will find these graphs very interesting.

    • I found this article-reasons to be against the balanced budget amendment-curious what you and others think-for the life of me-all I see when I read this is justification to continue on the same out of control government spending and people controlling road we are currently on-even though I see the reason behind some of the problems that a balanced budget could cause, it is nothing that I don’t see happening anyway-the only difference seems to be that there is no limit on how far they can push it.

      July 19, 2011 12:00 A.M.
      Against the Balanced-Budget Amendment
      It probably wouldn’t work, and if it did, it would be even worse.

      If Congress has trouble staying within constitutional bounds now, just wait until the Constitution mandates that it must balance the federal budget.

      Republicans have made a late entry into the debt-ceiling debate with a push for adding such a requirement to the Constitution. The balanced-budget amendment is not only an implausible way out of the debt-ceiling dilemma — it’s unlikely to pass Congress with the necessary two-thirds vote to send it to the states — it risks doing the worst disservice to the Constitution since Prohibition.

      The balanced-budget amendment came to prominence in the Contract With America back in the 1990s. It fell a vote short in the Senate and was soon forgotten — and deserved to be.

      A simple balanced-budget amendment threatens Republican fiscal priorities; it would create even more pressure to raise taxes. A straightforward amendment recognizes no difference between balance at 24 percent of GDP and at 15 percent of GDP.

      Realizing this, House Republicans have crafted a version that essentially mandates their favored fiscal policies. It requires that spending not exceed 18 percent of GDP and stipulates that only a two-thirds majority can raise taxes. Only modesty, presumably, prevented the amendment’s authors from spelling out budgetary levels for the Department of Health and Human Services.

      The Constitution is meant to set out the basic rules of the road for American governance. It’s not an appropriate vehicle for enshrining transitory or controversial policy preferences. This is what the 18th Amendment establishing Prohibition did, and so ensured widespread defiance of the nation’s foundational law.

      A balanced-budget amendment could befall the same fate at the hands of the fiscal bootleggers of Congress. Even House Republicans voted for a budget that doesn’t balance the federal books until roughly 2030. It’s easy to imagine Congress playing definitional games to evade the strictures of the amendment, inevitably inviting lawsuits.

      That the amendment would precipitate legal action is acknowledged in the amendment’s own language: “No court of the United States or of any State shall order any increase in revenue to enforce this article.” Judicial interventions in budgetary matters are, by implication, acceptable so long as they bring spending cuts. Let’s hope the federal courts are packed with judges favoring Medicare reform.

      The Republican amendment acknowledges there are circumstances when the budget shouldn’t necessarily be balanced. It allows for a waiver in fiscal years in which a declaration of war against a nation-state is in effect. As a plot to get Nancy Pelosi to declare war on Switzerland or another handy inoffensive country, this is brilliant. Otherwise, it’s wholly inadequate.

      We haven’t declared war on anyone since World War II. The amendment’s exception wouldn’t have accounted for the Cold War or the War on Terror, neither of which entailed declarations of war on nation-states.

      Another provision allows three-fifths of Congress to waive the amendment for expenditures related to a military conflict “that causes an imminent and serious threat to national security.” If you believe the Cold War or the War on Terror qualifies, this could have led to constant exceptions from 1947 to 1991, and from 2001 to perhaps the present.

      The impulse behind the amendment is certainly laudable — to attack the debt problem at its root. But a strictly balanced budget is not important enough to be written into the Constitution. The difference between balance and a small deficit is meaningless in the long run; it certainly doesn’t rise to the level of protecting free speech or ending slavery. We ran budget deficits from 1970 to 1997, and the republic survived.

      The current threat to the country is historic deficits driven by historic levels of spending. Favoring the balanced-budget amendment does nothing to address those problems in the here and now. Realistically, building the coalition necessary to pass the amendment as envisioned by Republicans would take years, by which time it will be gloriously irrelevant or altogether too late.

  34. A tough looking group of bikers were riding when they saw a girl about

    to jump off a bridge so they stop.

    The leader, a big burly retired Navy Master Chief, gets off his bike and asks,

    “What are you doing?”

    “I’m going to commit suicide,” she says.

    While he did not want to appear insensitive, he didn’t want to miss an

    opportunity, so he asked, “Well, before you jump, why don’t you give me a


    So, she does and it was a long, deep lingering kiss. After she’s finished, the

    biker says, “Wow! That was the best kiss I have ever had. That’s a real talent

    you are wasting. You could be famous. Why are you committing suicide?”

    “My parents don’t like me dressing up like a girl…….”

  35. Bama dad says:

    Want to get married?

  36. Buck the Wala

    Extra, Extra…………Read all about it.

    Justice Marshal rules against Obama Care……………..

    Click to access 20110603_NatelsonKopelEngage12.1.pdf

  37. CHICAGO | Tue Jul 19, 2011 3:34pm EDT

    CHICAGO (Reuters) – Texas and nine other states could end up with a higher credit rating than the United States.

    That is what Moody’s Investors Service on Tuesday said could happen if lawmakers in Washington fumble debt talks so badly the rating agency is forced to cut the U.S. rating to Aa1 from its current triple-A level.

    Ten states, including Texas, Missouri and Iowa, are not heavily dependent on federal aid and therefore will keep their triple-A ratings even if the United States is downgraded a notch, the rating agency said.

    However, the remaining five states rated Aaa by Moody’s — Maryland, New Mexico, South Carolina, Tennessee and Virginia — are likely to lose their top rating as their ties to the U.S. government in terms of high federal employment levels or Medicaid exposure put them in jeopardy should the United States’ rating be cut to Aa1 or lower, according to the rating agency.

    The action followed Moody’s placement on July 13 of the United States’ Aaa rating on review for a possible downgrade. At that time, Moody’s said it would be looking at all 15 Aaa-rated states, along with a slew of top-rated, cities, counties, school districts and universities to determine their vulnerability to deterioration in the United States’ credit.

    Neither Standard & Poor’s Ratings Services or Fitch Ratings have included states or other issuers in the U.S. municipal bond market that carry top ratings in warnings they put out about the United States.

    But all three major rating agencies have linked muni debt directly tied to the federal government, such as pre-refunded bonds and certain housing bonds, to possible action on the United States’ rating.

  38. Exclusive – U.S. backup debt plan doesn’t support rating-Moody’s

    By Walter Brandimarte

    NEW YORK | Tue Jul 19, 2011 7:01pm BST

    NEW YORK (Reuters) –

    NEW YORK, July 19 (Reuters) – A backup plan to raise the U.S. debt ceiling and avoid imminent default could still lead to a downgrade of the country’s ratings in the next year or so, Moody’s said on Tuesday, highlighting the plan’s failure to substantially reduce the deficit.

    The back-up plan offered by Senator Mitch McConnell, which is increasingly seen as a “Plan A” in Washington, would avoid any immediate downgrade of the coveted U.S. triple-A rating, Moody’s analyst Steven Hess told Reuters in an interview.

    “But the numbers that are being discussed in terms of any possible deficit reduction coming out of this plan don’t seem to be very large,” Hess said. “Therefore, this plan might result in a negative outlook on the rating.”

    A negative rating outlook usually means a downgrade is likely in 12 to 18 months.

    McConnell’s plan, which is being negotiated with Senate Majority Leader Harry Reid, would authorise President Barack Obama to raise the debt limit in three increments, totalling $2.5 trillion — without any mandatory spending cuts — provided Obama’s fellow Democrats go along with it.

    The plan would avoid a feared technical default by the U.S. Treasury but would not eliminate the periodic uncertainty related to the debt ceiling, Hess said.

    “That event risk would still be there because the debt limit would have to be raised again a couple of times before the end of 2012,” he said.

    The plan would also include about $1.5 trillion in deficit-reduction measures, which Hess said might still cause Moody’s to put a negative outlook on U.S. ratings.

    Hess said a “much larger amount” worth of deficit-reduction measures would be necessary for Moody’s to affirm U.S. ratings with a stable outlook.

    Asked about the ideal size of those deficit-reduction measures, Hess said $4 trillion “could lead us to affirm the rating at Aaa with a stable outlook, if those measures were actually adopted.”

    “I’d rather not opine on the numbers in between,” he said.

  39. “Gang of Six” plan is another Washington punt
    By: Philip Klein | Senior editorial writer Follow Him @Philipaklein | 07/19/11 5:28 PM

    Today, Washington was abuzz with the of the “Gang of Six” deficit-reduction plan, which received a boost when Sen. Tom Coburn, R-Okla., decided to rejoin the bipartisan group of Senators he had previously left in May.

    Though it’s being billed as a $3.7 trillion deficit-reduction package, based on the limited details we have, it looks like it defers the actual tough decisions to a later date.

    The plan claims just $500 billion in “immediate deficit savings,” but even these don’t seem all that immediate. Here’s what’s included as “immediate”:

    — Statutory spending caps through 2015. But that still leaves the actual cuts to be determined.

    — “(N)umerous budget process reforms.” Again, that’s not an actual cut.

    — “Shift to the chained-CPI (a more accurate measure of inflation) government-wide starting in 2012, along with the following specifications for Social Security: (1) exempt SSI from the shift for five years, and then phase in the shift over the next five years; and (2) provide a minimum benefit equal to 125% of the poverty line for five years.”

    In other words, let some future Congress can fight it out with AARP in 2017 when it comes times to actually implement this change.

    — “Repeal the CLASS Act.” For the unacquainted, this is a new long-term care insurance entitlement created within the national health care law. Since the program collects premiums before it actually starts paying out benefits, it produces projected surpluses at first, which turn into deficits later. It should undoubtedly be repealed, though, technically speaking, the way the accounting works, repealing the program won’t reduce short-term deficits (and actually will increase them).

    — “Enact concrete policy changes that lock-in additional savings, including freezing Congressional pay and selling unused federal property.” These actions could be used to reduce the deficit, though likely only marginally.

    — “Require GAO and the Department of Labor to report to Congress on establishing a more effective unemployment insurance trigger.” Okay, so this requires other parts of the government to issue a report. How does that represent “immediate” deficit cuts?

    As I noted, these are only the reforms that make up the theoretical $500 billion in “immediate” cuts.

    The rest of the cuts are even more tenuous.

    For instance, the plan would “Require committees to report legislation within six months that would deliver real deficit savings in entitlement programs over 10 years.” Here’s an example of one of the specific requirements: “Health, Education, Labor, and Pensions would find $70 billion.”

    In theory, if committees did not meet the requirements detailed in the proposal, it would mean across the board spending cuts. But, to put it charitably, it remains an open question as to whether this would actually happen.

    Read more at the Washington Examiner:

    “it looks like it defers the actual tough decisions to a later date.” I am of course -not really surprised. 😦

  40. Oops JAC! Default is inevitable…..had to do it 🙂

    • Anita

      My dear, you left off the first part of his sentence. “Without major changes”……………….

      I do take exception to his “defining” default as virtually anything to do with monetary or fiscal policy. It only confuses the debate for the general public.

  41. We are talking about human nature, knowledge and wisdom.

    Yes, we are – and in a context of a mangled form of democracy where the mass of the unknowing and ignorant carries the day and those in power pander to the masses

    Therefore, one should review the Public Choice Doctrines to best understand what will and will not happen.

    We are specifically talking about the political will of the American people.

    The political will of the American people has been set in ever-hardening concrete for the last 100 years – public looting for private benefit.

    You believe you can change this over night in “political time”, ie: next election.

    I believe it will not change until the entire paradigm is shattered – when government checks bounce.

    The outcome of that is not as cut and dry as you seem to believe. I have granted you the odds are long at this point. But that does not make the outcome “inevitable”.

    It watching a man falling without a parachute.
    You believe some superman will swoop in and catch him before he lands.

    True, he might be rammed by a jet liner before he makes it the ground or hit by lightening or a random bullet …. but all of these end the same … badly.

    I would be willing to bet that in 1770 the conventional wisdom in America was that the colonies would continue to exist under the umbrella of British rul.

    The conventional wisdom is held within your position – that change occurs to a system from within a system.

    But the system is formed specifically to resist this. Change to the system has always been done by catastrophic means, such a violent overthrow and revolution or – as in this case and the Roman Empire/Soviet Union case (and others) economics.

    The people will not support the withdrawal of the means of their “free lunch” until the day after there are no more lunches at all.

  42. Just A Citizen


    1) has the government EVER been constrained by the debt ceiling?

    This is true. However it is NOT supposed to constrain the Govt. Its purpose was to make the authorization of issuing debt more efficient.

    No, it was supposed to constrain government spending and force balanced budgets.

    But as with all politics, it was merely a way to gain public support for more debt and spending by showing “well, at least we are mouthing about it”

    (2) Does raising the debt increases the odds the collapse will be catastrophic?

    This is true. However you conflate debt with debt ceiling.

    Well of course!

    One does need to raise a debt “ceiling” unless one is piling on more and more debt!

    If the latter does not occur, the former is moot.

    If the latter continues unabated, the former will be found.

    Whether incurring more debt today could help prevent catastrophic collapse depends entirely on the political will of the people to use that new debt wisely.

    Utterly and totally impossible.

    Usefuldebt earns a greater return then the debt costs.

    Government does not, nor ever, nor can offer a greater return on expenditures then the earner of the income

    Government uses debt or taxes to pander to political will and bribe a group of people who are willing to legitimize all the rest of the government action in all other areas.

    We only need to buy enough time to see the results of the 2012 Congressional elections.

    No matter what happens, you see the election.

  43. JAC

    default as virtually anything to do with monetary or fiscal policy. It only confuses the debate for the general public

    Actually, the other way around. Government is not a person.

    Without understanding that government default differently from individuals is incredibly important.

    If you fail to pay your debts, you lose property to your lender.

    Governments do not lose property to their lender – you do not “foreclose” on government. The lender is stiffed. This creates a different series of consequences and outcomes then if “YOU” defaulted.

    Government defaults by failing to abide by their promise.
    In a circumstance where legitimacy is the ONLY hold an entity has to maintain its own existence, maintaining at least the appearance of meeting the promises.

    Thus government default begins with paying some bills and not paying others – the latter being the ones who are on the margin of political support, then an ever increasing circles of more and more people that are not paid..

    … which will eventually lead to a massive change of the politic landscape as people shift their legitimacy grant to another violence provider who makes promises that he can -for at least the short term- keep.

  44. Canine Weapon says:

  45. I wonder why no one looks at “cash flow” vs the debt and borrowing?

    • I’m not sure what you mean-I posted a link that shows the amount we receive per day and what we owe per day.

      • I know….but no one seems to understand that the gov’t will never run out of money. IT can simply print more regardless of the consequences.

        • Interesting point-but someone smarter than I am will have to discuss this mess from that angle. I can see where printing money could get us past the short term cash flow problems-but how that would affect our debt and our credit rating-I’m thinking negatively-in the long term-if it forced government to really cut spending and change their ways-maybe it would be worth it.

          • Please do not misunderstand me. The unabashed printing of money leads to inflation and even hyper inflation eventually. If there was a currency in the world right now that was stronger than the US dollar, we would be in serious trouble. (not that we aren’t)…..however, think of it this way as well. Why do countries still want the dollar? Why doesn’t China take as much in Euro debt as it does the US? Or the Sterling? Why is China selling its gold in droves? The Chinese currency is actually US dollar based…..though no one, but maybe BF, will agree with me on this. Maybe he won’t but I am betting on the “river” that he looks deeper than most because he understands economics. Everyone is looking at the US debt crises right now… one is looking behind the curtain, so to speak. Why? It is no reflection on individuals and their lack of knowledge but economics is much more important now than before. The internet and computers tied the world together. Things happen too fast due to the internet and computers…selling and trading on the world markets and the US markets are all based on “triggers” tied tosplit second timing….and it takes one important aspect out of it. Computers are making decisions that competent managers and people should be making decisions on. Often, the triggers built into the system need rational thought….computers are not rational.

            Cash flow is still simple. When YOU, VH, is out of money…you are dead. Governments are not. You go to jail if you print funny money…..Governments do not.

  46. The new Cold War. The USSR is gone……now there is China.

    Interesting fact: China owns approximately 1.15 trillion in US Debt. The first interest payment to China this year was approximately 31 billion with three more interest payments due.

    The total military budget for China is 91.5 billion. China is only 10 nuclear submarines behind the US. The US has 10 operating Carrier groups….China now has three and is building three more to be finished this year.

    China will soon outnumber the United States in tanks and combat aircraft.

    China’s hegemony is greater than that of the US with emphasis on natural resources and is exponentially greater than the Soviet Union’s hegemony in the 1960’s and 70’s.

    The United States runs a dismal third place in the military financing of expansion in the world to China (number one) and Iran (number two).

    In 1995, President Clinton sold strategic military computers, guidance system information, and leased the Los Alamos nuclear facility to China along with all sensitive military nuclear items there. China’s increase in nuclear capability and computer guidance delivery systems has increased over 165% since 1995 and no one seems to care.

    I wonder why no one cares about this?

  47. The next bubble to burst?

    Will college bubble burst from public subsidies?

    • “Take the California State University system, the second tier in that state’s public higher education. Between 1975 and 2008 the number of faculty rose by 3 percent, to 12,019 positions. During those same years the number of administrators rose 221 percent, to 12,183. That’s right: There are more administrators than teachers at Cal State now.”

      That line just says it all-doesn’t it. Government involvement causes out of control Bureaucracy. You got to give it to them- if your aim is to grow government power their plan is working- they just want to help, so they help a few, cause the price to skyrocket for the many, and suddenly the number who need help increases because they increased the prices -so then they come in and claim private industry can’t handle it-so lets nationalize and/or we must raise taxes in order to pay for the extra that need help-so all those programs that are only there to help the poor-must be increased to handle the poor they created by their policies to help those few. The vicious circle will eventually lead to total collapse-which they will probably use to create actual communism. Of course I’m exaggerating-per the left.

  48. More Obama campaign contributors than Obama new jobs
    Ethel C. Fenig

    Speaking of the “jobs collapse,”

    Mark Tapscott of the Washington Examiner sums up the situation quite nicely.

    Obama attracted twice as many campaign donors as his economic policies created new jobs. That probably explains a great deal about yet a third number that received a great deal of attention this week: Gallup’s finding that a “generic Republican” leads Obama by eight points in voter preference for 2012.

    Maybe those half a million plus Obama 2012 re election campaign contributors, some of them quite wealthy, probably all of them still working mostly in government or government dependent jobs, can create their own American Obama Reinvestment Act and Stimulus, providing jobs on spinning Obama, propagandaizing Obama, deifying Obama and such. Think of what it will do for the American economy.

    • Good morning, LOI………hope you and yours are doing well.

      • GoodDay D,
        Work has been tough lately, but it’s better than being out of work. Thought you would find this interesting. I would say most of these flights should cost out at one hour and 2-$250 per hour would be generous…….

        According to the new filings with the Federal Elections Commission, McCaskill’s campaign committee had failed to account for 143 contributions in the ‘06 cycle, totaling nearly $277,000. The committee also missed about $277,000 in disbursements. During that cycle, McCaskill raised $11.5 million.

        The discrepancies, her campaign said, could be attributed to the fact that donations were coming in at a furious clip at the end of the race, shortly after a plane crash killed McCaskill’s top campaign-finance aide and five other skydivers in July 2006.

        A campaign spokeswoman downplayed the amendments as nothing more than “routine housekeeping.”

        Apart from the unrecorded donations, McCaskill filed four amendments to account for instances where she personally paid for plane trips that included a political event for her 2012 campaign. FEC rules require self-funded political travel to be listed as an “in-kind contribution,” but McCaskill had not previously reported the trips. No tax dollars were used for any of these trips, a campaign spokeswoman said.

        The amendments accounted for a $1,395 roundtrip flight from St. Louis to Kansas City on Dec. 15, 2008; an $1,809 roundtrip flight from St. Louis to Chicago on Nov. 1, 2009; and $3,460 for a plane trip from St. Louis to Kansas City to Springfield, Mo., and back to St. Louis in April 2010. However, $912 of that third trip was for official Senate business.

        “These minor updates are simply a matter of tying up loose ends on the in-kind, political use of the plane,” said Missouri Democratic Party spokeswoman Caitlin Legacki, who is assisting the McCaskill campaign. “After Claire self-reported errors in March, she said she would thoroughly review the flights and these updates are a result of that review.”

        The St. Louis Beacon first reported the new amendments filed by McCaskill, a first-term senator and one of the GOP’s top targets in 2012.

        In March, McCaskill reimbursed the Treasury than $88,000 after POLITICO reported she had used taxpayer dollars from her Senate office account to pay for nearly 90 flights on her private plane, a single-engine turbo-prop Pilatus PC-12. That same week, POLITICO reported that at least one of the trips was political in nature, which prompted the Missouri Republican Party to file a Senate ethics complaint against McCaskill.

        Weeks later, McCaskill said that she and her husband, St. Louis businessman Joe Shepard, had failed to pay nearly $320,000 in state back taxes and penalties on the plane over a four-year period. She promptly vowed to “sell the damn plane,” though so far there have been no buyers.

        Republicans, who see McCaskill’s seat as a prime pick up opportunity in 2012, have had a field day with the senator’s accounting blunders.

        “For someone who prides herself on being an auditor, lawyer, and government watchdog, Claire McCaskill sure does seem to make a lot of accounting and tax errors,” said Lloyd Smith, executive director of the Missouri Republican Party.

        Read more:

  49. PeterB in Indianapolis says:
    • There are alot of people who will argue to the death that all those programs were not only necessary but saved the country-I can’t see any truth in their arguments-historical data backs up that the policies during the great depression hurt alot more than they helped. But I can’t help but feel that some(please note the word some) of those programs were needed TEMPORARILY to help the people survive.

  50. Where are all the progressives-things are too-agreeable around here. 🙂

  51. Mathius™ says:

    Way, way, way off subject, but I thought I’d share throw this out and see what people think..

    • It is a conundrum, how to confront a problem based on race or religious beliefs without hurting or seeming to condemn the whole. But the problems must still be addressed. 😦

      • Like this for instance are we ignoring a problem by being politically correct or helping to increase the problem.

        July 18, 2011
        Three-monkey Authorities Ignoring another Black-on-white ‘Hate Crime’
        Selwyn Duke

        Like the three monkeys who see, hear and speak no evil, our authorities seem intent on ignoring the true nature of yet another black-on-white racial attack. In the New York City subway this past Sunday, 29-year-old Jason Fordell was attacked by a group of black men who taunted him for being white. Yet NYC police “are unsure” if the incident is a bias crime.

        The problem started when Fordell transferred to a crowded 4 train at 42nd street, where he encountered four black men who began harassing him. The New York Daily News reports on what transpired next, writing:

        “People started saying stupid little comments – cracker this, white boy this, f—-t this,” Fordell said. “I told them the only reason they were saying this is there was four of them and one of me.”

        …As the train continued into the Bronx, the confrontation became physical, he said.

        “I was in a headlock, punched and kicked on the floor,” Fordell said.

        Then a passenger decided to join in – declaring, “Oh, I get a few shots, too,” before kicking and punching Fordell in the head, according to cops.

        …”Everyone on the train was egging them on,” said Fordell

        Fordell suffered numerous injuries, which included head-bleeding, a badly swollen eye and internal injuries, as evidenced by blood in his urine. The assailants also stole a bag he was carrying that contained $2900-worth of handmade leather accessories, which Fordell sells at an East Village nightclub.

        Despite the epithets hurled by Fordell’s attackers, this crime hasn’t yet been transferred to the NYPD hate-crimes task force because, we’re told, the authorities aren’t sure if it was motivated by bias. According to a Daily News source, “They have to look at whether that was the motivation before the robbery.”

        Really? Do the police need evidence that the four sat in a darkened room laughing fiendishly while stating that they were going to attack a white guy because they hate crackers? I always understood that the mere use of racial language during an attack was enough to classify it as a hate crime (or, at least, it seems to be when a white person is the accused).

        And this brings us to yet another reason why I oppose hate-crime legislation. Not only is it an attempt at thought control, as it’s hard to escape the conclusion that the extra punishment it mandates is for the thoughts expressed through the commission of the crime, but it will never be applied equally. The government just has too much room to fudge when it’s assigned the role of mind-reader. And in a politically correct time, it’s not hard to figure out what form that fudging will take. Hate-crime laws are not designed to punish hate, but, rather, the thoughts, actions and groups the Left hates.

        And, I believe, they pave the way for hate-speech laws. After all, if people can be punished for saying the “wrong things” within the context of the commission of a crime, how long will it be before they’re punished for saying the “wrong things” beyond that context?

        As for the police’s willful blindness, it should surprise no one. Being human, cops respond to powerful social pressure like anyone else. Add to this the fear of being labeled bigots, career damage and rioting that could result from actually enforcing the law with minority perpetrators, and it’s easy to see why the thin blue line looks awfully yellow when the matter is black-on-white crime.

        If this keeps up, soon we’ll be like Britain. In that once-proud civilization, the police are so afraid to tackle Muslim criminality that their efforts to cover it up have reached comical proportions. And it will keep up unless we experience a deep cultural renewal. This means pulling leftist ideology up by the roots in academia, the media, the entertainment arena and beyond. Mere political victory won’t change a thing.

        • I’m throwing this one in -because it makes me want to cuss.

          July 20, 2011
          Black Privilege

          By Robin of Berkeley

          One of my friends voluntarily attended an event recently, one that I wouldn’t go to for a million bucks (well, maybe a million bucks). It was called Erasing White Privilege.

          My friend, whom I’ll call Andrea, sat in a room with other whites on one side, and people of color on the other. Then the whites sheepishly confessed any real or imagined offenses perpetuated against a person of color.

          After the whites tried to atone for their guilt, the people of color got involved: yelling at them, preaching, and discharging much rage. Andrea’s rendition of the events reminded me of those angerfests that were popular in the ’70s.

          Back then, people would pay to be in encounter groups, where they’d holler and smack each other with foam bats. The idea was that by releasing anger, everyone would feel better.

          But guess what the research eventually found? By raging at another person (whether he deserves it or not), our anger doesn’t dissipate; it grows. And the deleterious effects are not just emotional. Blood pressure rises and muscle tension increases, promoting hypertension and musculoskeletal pain.

          But the studies don’t matter; these days it’s all about white guilt and minority rage. And the endgame isn’t reconciliation and racial healing. We’re living in a creepy age where revenge is the order of the day, where the left wants to seize power under the lofty guise of justice.

          Personally, I have never had a moment of white guilt in my life. Now this is a significant statement given that I am Jewish and from New York. I feel guilty about pretty much everything!

          But I feel guilty about what I do — or don’t do. If I inadvertently hurt a friend’s feelings, if I am ill-mannered to a clerk, if I disappoint my husband, I can find myself drowning in a sea of guilt and shame.

          But guilt because of the color of my skin? Guilt because some white person in 1960s Selma, Alabama refused to allow a black person into his restaurant? Guilt because while my relatives were being raped and pillaged in Russia, a small minority of white people owned slaves (as did, by the way, some free slaves)? I might as well feel guilty about the train wreck that is Casey Anthony simply because she and I share the same race, gender, and sexual orientation.

          The idea of collective guilt is not just absurd; it’s evil. It’s saying that all Jews were bad because some may have committed some injustice in Germany, circa l940. It’s saying that all Israelis are responsible if someone injures a Palestinian. Or that all whites are culpable for the actions of others 50 or 150 years ago. Collective guilt is a notion that is so laser-focused on race, it is actually racist.

          It’s also anti-God because no legitimate religion preaches culpability based on race or gender. According to Hinduism and Buddhism, we each reap what we sow karmically. Christians and Jews believe in individual accountability for sins on Judgment Day.

          Of course, many religions have twisted things around, with liberal churches and synagogues promoting the notion of white guilt. There’s a reason for this: it’s safer to hide behind the behavior of an entire race than stand naked before God. I sure wouldn’t want to be Bill Ayers or Bernadine Dohrn the day they arrive at the Pearly Gates (if they make it there at all).

          It’s so much easier to merge with the crowd, to assume that God will be placated by über-recycling. How sobering to realize that we will one day be judged by our character and our faith — not whether we voted for Obama.

          But if this age is all about guilt and confession, I have a burning question. Why isn’t everyone required to confess their political sins? If I’m supposed to sit in a room, and tearfully confess, Oprah-style, about every judgmental thought I’ve ever had, why aren’t people of color required to do the same?

          Frankly, I wouldn’t mind an apology from the black kids in middle school who taunted and threatened me because of the color of my skin. I’d like a big “I’m sorry” from the gangs of black girls in high school who, enraged by forced busing, mowed me down in the hallway. And for when I went to the Arab Market in Israel as a teenager and seven different Arab men, in seven separate incidents, grabbed my private parts, I’m more than ready to hear an apology.

          And I’m also waiting with bated breath for apologies from the following: the black dude in pre-Giuliani Manhattan who fondled me in a similar way; the black man in Berkeley who mugged me, leaving me with a black eye and broken nose to die (I didn’t) in the middle of the street; and the countless black men in Berkeley who have called me a “f___g white b___” when I didn’t give them spare change.

          But I don’t want an apology because of white privilege or black privilege, or any such nonsense — but because it is wrong to molest, mug, or otherwise violate another human being — no exceptions! This has nothing to do with race but everything to do with about human decency and consideration.

          But in Obama’s America, there’s little human decency to be found. The rules have changed, and they consist of the new three Rs: rage, revenge, and reparations. And this malignant game of Blaming Whitey will go on and on until we call it what it is (hate), walk away from the table, and refuse to play.

          • says:

            Apologize? For WHAT????

            Because some blacks ANCESTORS were slaves??? Because OTHER Africans SOLD their ancestors to our WHITE ancestors????

            If we’re going to apologize for that BULLSHIT, then we need to apologize to each other and EVERY race ever known. Because slavery and injustices have taken place since the beginning of time. It didn’t START with the Black race and it has NEVER ended.

            So don’t think I will EVER APOLOGIZE. EVER. PERIOD FRICKIN’ DOT

          • Great article and valid points.

            • Glad you liked it-So lets add this one-it points out that not confronting these types of problems-helps no one.

              Walter E. Williams
              Walter E. Williams
              America’s New Racists
              6/22/2011 | Email Walter E. Williams | Columnist’s Archive

              The late South African economist William Hutt, in his 1964 book, “The Economics of the Colour Bar,” said that one of the supreme tragedies of the human condition is that those who have been the victims of injustices and oppression “can often be observed to be inflicting not dissimilar injustices upon other races.”

              Born in 1936, I’ve lived through some of our openly racist history, which has included racist insults, beatings and lynchings. Tuskegee Institute records show that between the years 1880 and 1951, 3,437 blacks and 1,293 whites were lynched. I recall my cousin’s and my being chased out of Fishtown and Grays Ferry, two predominantly Irish Philadelphia neighborhoods, in the 1940s, not stopping until we reached a predominantly black North or South Philly neighborhood.

              Today all that has changed. Most racist assaults are committed by blacks. What’s worse is there’re blacks, still alive, who lived through the times of lynching, Jim Crow laws and open racism who remain silent in the face of it.

              Last year, four black Skidmore College students yelled racial slurs while they beat up a white man because he was dining with a black man. Skidmore College’s first response was to offer counseling to one of the black students charged with the crime. In 2009, a black Columbia University professor assaulted a white woman during a heated argument about race relations. According to interviews and court records obtained and reported by Denver’s ABC affiliate (12/4/2009), black gangs roamed downtown Denver verbally venting their hatred for white victims before assaulting and robbing them during a two-month crime wave. Earlier this year, four black girls beat a white girl at a McDonald’s, and the victim suffered a seizure. Chicago Mayor Rahm Emanuel ordered an emergency shutdown of the beaches in Chicago because mobs of blacks were terrorizing families. According to the NBC affiliate there (6/8/2011), a gang of black teens stormed a city bus, attacked white victims and ran off with their belongings.

              Racist black attacks are not only against whites but also against Asians. In San Francisco, five blacks beat an 83-year-old Chinese man to death. They threw a 57-year-old woman off a train platform. Two black Oakland teenagers assaulted a 59-year-old Chinese man; the punching knocked him to the ground, killing him. At Philly’s South Philadelphia High School, Asian students report that black students routinely pelt them with food and beat, punch and kick them in school hallways and bathrooms as they hurl racial epithets such as “Hey, Chinese!” and “Yo, Dragon Ball!” The Asian American Legal Defense and Education Fund charged the School District of Philadelphia with “deliberate indifference” toward black victimization of Asian students.

              In many of these brutal attacks, the news media make no mention of the race of the perpetrators. If it were white racist gangs randomly attacking blacks, the mainstream media would have no hesitation reporting the race of the perps. Editors for the Los Angeles Times, The New York Times and the Chicago Tribune admitted to deliberately censoring information about black crime for political reasons. Chicago Tribune Editor Gerould Kern recently said that the paper’s reason for censorship was to “guard against subjecting an entire group of people to suspicion.”

              These racist attacks can, at least in part, be attributed to the black elite, who have a vested interest in racial paranoia. And that includes a president who has spent years aligned with people who have promoted racial grievance and polarization and appointed an attorney general who’s accused us of being “a nation of cowards” on matters of race and has refused to prosecute black thugs who gathered at a Philadelphia voting site in blatant violation of federal voter intimidation laws. Tragically, black youngsters — who are seething with resentments, refusing to accept educational and other opportunities unknown to blacks yesteryear — will turn out to be the larger victims in the long run.

              Black silence in the face of black racism has to be one of the biggest betrayals of the civil rights struggle that included black and white Americans.


  52. Ray Hawkins says:

    Very well done…entertaining….

  53. I was riding to work yesterday when I observed a female
    driver, who cut right in front of a pickup truck, causing
    the driver to drive onto the shoulder to avoid hitting her.

    This evidently angered the driver enough that he hung his
    arm out his window and gave the woman the finger.

    ‘Man, that guy is stupid,’ I thought to myself. I ALWAYS
    smile nicely and wave in a sheepish manner whenever a female
    does anything to me in traffic, and here’s why:

    I drive 48 miles each way every day to work.

    That’s 96 miles each day.

    Of these, 16 miles each way is bumper-to-bumper

    Most of the bumper-to-bumper is on an 8 lane highway..

    There are 7 cars every 40 feet for 32 miles.

    That works out to 982 cars every mile, or 31,424 cars.

    Even though the rest of the 32 miles is not bumper-to-bumper,
    I figure I pass at least another 4000 cars.

    That brings the number to something like 36,000 cars that I
    pass every day.

    Statistically, females drive half of these.

    That’s 18,000 women drivers!

    In any given group of females, 1 in 28 has PMS. That’s 642.

    According to Cosmopolitan, 70% describe their love life as
    dissatisfying or unrewarding. That’s 449.

    According to the National Institute of Health, 22% of all
    females have seriously considered suicide or homicide. That’s 98.

    And 34% describe men as their biggest problem. That’s 33.

    According to the National Rifle Association, 5% of all females carry
    weapons and this number is increasing..

    That means that EVERY SINGLE DAY, I drive past at
    least one female that has a lousy love life, thinks men
    are her biggest problem, has seriously considered
    suicide or homicide, has PMS, and is armed.

    Give her the finger? I don’t think so!!!

  54. The debt ceiling is going to be raised-So lets talk about why it should be raised by so much and why it should go through 2012-Seems like just an excuse not to actually make any cuts to me.

    Obama: Borrow $2.4 Trillion—Roughly What We Borrowed During WWII
    2:26 PM, Jul 19, 2011 • By JEFFREY H. ANDERSON

    President Obama repeatedly insists that the debt ceiling must be raised by at least $2.4 trillion. Why this particular amount, rather than, say, an even $1 trillion or $2 trillion? Because $2.4 trillion is Obama’s estimate for what it would take to get him through the next election without needing to deal with another debt ceiling battle. In other words, $2.4 trillion is a politically generated figure.

    It’s hard to conceptualize sums as vast as $2,400,000,000,000.00 in newly borrowed money, new deficit spending, and new debt. How much, really, is it? Well, even after adjusting for inflation, it’s about the same amount of money that we borrowed to fight World War II.

    According to the White House Historical Tables, at the end of 1941, our debt — in 2011 dollars — was $0.8 trillion. By the end of 1945, it was $3.3 trillion, a difference of $2.5 trillion. (If you start the clock at the end of 1940, our debt increased by $2.6 trillion by the end of 1945, but that includes 15 months — 11 before Pearl Harbor and 4 after V-J Day — when we weren’t at war.) In other words, in inflation-adjusted dollars, Obama wants to borrow and spend about the same amount of money to get from August 2, 2011 through November 6, 2012 as we borrowed and spent to fight the Axis powers on two fronts from December 7, 1941 to August 15, 1945.

    To give another comparison, from the year of Obama’s birth, 1961, through the last year of the Reagan administration, 1988, the United States of America accrued $2.4 trillion in new debt — again, in inflation-adjusted (2011) dollars. So Obama is now insisting that he be allowed to rack up the same amount of inflation-adjusted debt in the next 15 months as Kennedy, Johnson, Nixon, Ford, Carter, and Reagan did during Obama’s first 27 years.

    Yet Obama doesn’t just want his $2.4 trillion. He wants this on his own terms. He has threatened to veto Republican legislation to cut, cap, and balance spending in exchange for raising the debt ceiling by $2.4 trillion, because he claims that “setting arbitrary spending levels” is not “necessary to restore fiscal responsibility.” This, from a president under whom the federal government is spending a little over $7 this year for every $4 it takes in, and a president who has refused to reform entitlements even though (according to his own budget) mandatory spending alone will exceed total federal revenues this year (and that’s before Obamacare has really even kicked in), and under whom annual deficit spending has been more than twice as high as a percentage of the gross domestic product than under any other recent president.

    Since Obama says he isn’t willing to take this $2.4 trillion because he opposes caps, Republicans should vote to raise the debt limit by $1 trillion (or even $1.5 trillion), paired with at least $1 trillion (or $1.5 trillion) in spending cuts, with no caps — leaving it to Obama to explain to the American people why he still needs more. Even more importantly, they should pass legislation dictating the order of payments in the event that we hit the debt limit — just for the big-ticket items like troops’ and veterans’ pay, Social Security checks, Medicare, and payments to creditors and vendors. Then, with such legislation securely in place, they should dare Obama to let August 2 (or 9th, or 16th, or 23rd, or 30th) come and go because he doesn’t get enough of an increase in the debt ceiling — at least on his terms — to set up his reelection campaign the way he wants.

  55. V.H.

    [printing money] how that would affect our debt and our credit rating

    Credit rating is based on your ability to repay.

    Government can print money to repay debt (called “monetizing the debt”), thus the credit rating will be unfazed.

    Printing money, however, creates inflation which lowers the value of each piece of money. Thus, lending money that then will be repaid with lower value money causes the lending money price to go up (higher interest rates).

    This causes government to spend more on interest payments – which to meet the payments, prints more money – which you can see creates a spiral of inflation towards hyperinflation.

    To prevent hyperinflation, government must stop printing money and stop monetizing their debt, – which means defaulting on their debt.

    • Thanks BF-but since the world is complaining about us monetizing our debt-wouldn’t monetizing our debt in order to get past a cash flow problem without raising the debt ceiling- until we could agree on spending cuts-wouldn’t this cause the rating agencies to lower our credit limit now-causing our interest payments to go up immediately????

      • V.H.

        -but since the world is complaining about us monetizing our debt

        Err… who is complaining about the monetizing of debt?

        wouldn’t monetizing our debt in order to get past a cash flow problem without raising the debt ceiling- until we could agree on spending cuts-wouldn’t this cause the rating agencies to lower our credit limit now-causing our interest payments to go up immediately????

        The ratings has nothing to do with the monetizing of debt.

        The ratings always, always, always measures the ability to repay.

        If the rating agencies begin to believe that the debt (or some of the debt) will not be repaid, they will be to downgrade their ratings.

        They do not care about inflation/deflation – they only care about the repayments.

        • Gonna chew on that answer for awhile-They started the talk about raising the rate based on the debt ceiling as far as I’m aware- but since then they have brought up a real plan to cut debt etc, etc-which makes me believe the danger of a cut isn’t limited to just raising the ceiling.

          • Excuse me-talk about lowering the rate. 🙂

          • While the timing of the talk coincided with this debt ceiling “crisis”, my understanding is their concern was about the overall financial picture and how we are (or are not) handling it.

          • V.H.

            The ratings agencies, and others, issued a warning months ago that if we don’t address the deficit and then the debt in a “significant” way that our credit rating could be reduced “sometime in the near future”. Notice vague reference to when but sooner than later.

            Then came the debt ceiling crunch so they issued another warning that the rating would be dropped if the ceiling were not extended. As in immediately. This is important because there is a large amount of debt to be rolled over the first week after the deadline. Meaning we need to sell new bonds to replace old bonds.

            Bernanke restated this same warning in his testimony last Thursday. The one hardly covered by the press because the Dems managed to get everyone focused on only the Aug 2nd crisis.

            So what you are hearing now has been around but the message got confused due to the Aug 2nd debate. Bottom line. WE MUST SIGNIFICANTLY REDUCE THE DEFICIT AND THEN BEGIN ADDRESSING THE DEBT.

            I am guessing that despite the rhetoric there is a broad understanding just how grave the situation is, by both parties. What is not in agreement is the means of addressing the problem.

            The Dems want to go back to the pre Bush tax rates for the upper income levels AND eliminate targeted deductions. But this won’t come close to doing the job.

            To address the DEFICIT we need another 1.5 to 2.0 Trillion per year in income or cuts, NOT TEN YEARS but EACH YEAR.

            To cover the existing DEBT as well as the shortfall in Soc Sec, Medicaid and Medicare over the next 50 years, we need ANOTHER 2.3 Trillion per year in income or cuts in spending or some combination of both. AND that is if the interest on the debt does not increase beyond about 3%.

  56. V.H.

    The debt ceiling is going to be raised-So lets talk about why it should be raised by so much and why it should go through 2012-Seems like just an excuse not to actually make any cuts to me.

    What purpose is gained by “talking about the debt ceiling”?

    • Hope-I suppose-just Hope- that maybe enough people will hear to make a difference!

      • V.H.

        Your “hope” assumes that the Masses will sacrifice themselves for the un-faced others.

        This is not rational.

        To hold your position, the Masses must abide by principle over pragmatism.

        Even to the some of the most moral, this is choice is impossible.

        Ask yourself this:

        Someone else’s child is on a one-person raft.
        Your child is drowning.
        Would you toss the other child off the raft to save your own?

        This decision is the difference between barbarism and civilization. Many, if not most, will choose barbarism.

        Therefore, if in any circumstance far less severe would you expect different???

  57. Gotta go-but must post this-maybe someone can explain how they came to this claim-I don’t doubt it-Just don’t understand it.

    Gang of six plan raises taxes by $3 trillion
    By: Conn Carroll | Senior Editorial Writer Follow Him @conncarroll | 07/19/11 3:39 PM

    The Gang of Six “Bipartisan Plan to Reduce Our Nation’s Deficits” claims their tax reforms would be scored by the Congressional Budget Office as a $1.5 trillion net cut. But no details are provided on how they arrive at this number other than saying they will abolish the Alternative Minimum tax. So how can this plan claim to be a “balanced approach” (which means higher revenues), yet also claim to be a $1.5 trillion tax cut?

    This probably means they are using a CBO baseline that assumes the AMT continues as written today and that the current Bush rates expire. Last August, the CBO said those policies would amount to a $4.8 trillion tax hike. Which means the the Gang of Six plan probably raises taxes by about $3+ trillion over current rates.

    Read more at the Washington Examiner:

  58. JB

    So you’re saying we should not repay our debts according to the contracts?

    Stop and analyze.

    Government is not like you in any way, shape, or form.

    Governments do NOT have to abide by contract – they are ABOVE contract law. The law specifically states that the government is immune to any lawsuit, unless they allow such a suit to be against them.

    You try that trick at home! 🙂


    That’s a sure way to make a bad deal.

    …LoL.. so anyone who sells, or loans, or deals with government is subject to this “bad deal”!!

    My point exactly — why in HELL would anyone deal with a government???

    If our credit rating drops (it certainly will if we don’t pay interest) then our interest rates will increase. This means we pay more money in interest, thus taking away more money from our economy.

    Interest payments are as much a part of the economy as everything else.

    They are the price paid for risk of money.

    No more and no less an economic law.

  59. JAC, and everyone:

    Well nobody except those who would like to see the crash and burn option accelerated to the here and now

    My old friend and occasional foe has this point …. wrong…

    The debt ceiling is a facade. It is merely a few lines on paper and wholly meaningless at face value.

    The entirety is about legitimacy, which is why all the fretting and showmanship is overwhelming.

    The fact:
    government made a law on government.
    government cannot abide by the law on itself.

    This risks legitimacy – and I have explained this ad naseum to SUFA that this is the ONLY hold government has upon the People – the perception of legitimacy – I am not the first of this, read Frédéric Bastiat, he explained it the best, first.

    When government, or any ruler, cannot abide by his own decrees, it tosses such perverted men into arbitrary rule.

    Such rule has been, historically, dismissed – Code of Hammurabi set the standard a few thousand years ago – that rulers must provide consistent law to be legitimate.

    The regime cannot abide by its own law – thus fails the test of 5,000 years of governance.

    No one in government cares whether they print or steal their loot.
    They do care how it looks.

    The viewing is not pretty.

    The elite are worried.

  60. A minor American philosopher once opined, “There are no contradictions. When you perceive a contradiction, check your premises. You will find that one (or more) of them is wrong.” So, let us check:

    Premise #1. Clear headed thinkers in the United States realize that present trends plotted into the future spells financial disaster for the nation.

    Premise #2. Credit worthiness is a function of risk to creditors . . . a prospective borrower is screened for potential risk and an appropriate “credit rating” assigned.

    Premise #3. The idea of a borrower saying, “no more” to further borrowing should INCREASE probability that the borrower can pay back present obligations as agreed. I.e., restrained borrowing lowers risk: unrestrained borrowing raises risk. I’m pretty sure that’s what happens to me if I have a dozen maxed out credit cards!

    Premise #4. If a nation is truly dedicated to bringing acquisition of new debt under control, why would it care if their credit rating went into the tank?

    Premise #5. If a credit rating is worth the paper it’s printed on, it would reflect the intentions and ability of the rated creditor to honorably service it’s debt.

    Analysis: It would appear that our credit rating has been much too good for far too long. I suggest that maintenance of a stellar rating was INTENDED to increase our debt even in the face of decreasing revenues. If I were running a house like Moody’s, the passage of Obamacare would have knocked points off the US credit rating just for it’s demonstrable lack of economic sanity.

    This all smells like a Frankfurt School philosophy for trimming those “arrogant, self-sufficient, honorable nations” down to sizes attractive to Frankfurt School graduates (despotic progressives). To my way of thinking, the best thing that could happen to us is the downgrading of our credit rating. For only in the face of real adversity (virtual bankruptcy without having to disburse assets) will the true nature and intent of our nation’s leadership become clear.

    So to all this I add the over-riding Premise #6: Our national ‘credit rating’ is a scam intended to do one thing, keep the flow of debt paper running across the desks of traders who get paid commissions on ‘face value’ of the paper. When the thing blows up, who gets hurt? (1) Certainly borrowers who’s economy crashed with reckless spending, oppressive taxation, and regulation. (2) Our creditors who trusted the folks rating our credit worthiness. Who comes out smelling like a rose? the traders who converted their commissions into gold, real-estate, or stable currencies. And what of the raters? “Oh, just damn. We screwed that one up! Sorry.”

    The corollary premise #7 is that our despotic progressive government doesn’t give a rat’s rear end about our nation’s future. They’re too mentally deranged to perceive the suicidal nature of their behaviors.

    So it appears the philosopher was correct . . . the contradiction for what the honorable citizen perceives as honorable management of credit (Premise set 1 – 5) and how government behaves (Premise set 6-7) is resolved by declaring the later set as controlling.

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