Filed under: Capitalism, Democrat Corruption, Economy, Politics, Progressivism, Taxes, The Constitution | Tags: Obama's Political Theater, The Debt Ceiling, The Shutdown
The shutdown is political theater to cover up the bigger battle to restrain the federal government. The Obama administration is spending $3.6 trillion per year —without a budget. Government expenditures are expected to increase rapidly. The government has piled up $17 trillion in debt and something like $60 trillion more in unfunded spending promises.
The new fiscal year begins on October 1, which is why all this is going on now. Federal fiscal year 2013 just ended, and fiscal year 2014 began. In fiscal year 2013, the federal government collected about $2.813 trillion in revenues — and spent about $3,455 trillion. The difference between the two numbers —$642 trillion —is the unified budget deficit for Fiscal Year 2013.
So where did we get that $642 trillion that we didn’t have? We borrowed it. The Treasury department sold IOUs that we call Treasury bonds (technically bills, notes and bonds). Investors pay cash and in return get a promise that the Treasury will pay them back later, with interest, and on time.
The Treasury needs to borrow a lot because the deficit is big. The deficit is big because the federal government is spending a lot more than it collects in revenues. If we had a balanced budget, the Treasury wouldn’t need to borrow more money. If Congress and the president cut spending and /or raised taxes. The U.S. National Debt is, according to the U.S. Debt Clock — $16,962,445,100,671 heading rapidly for $17 trillion, and up.
Everybody who sits down at the kitchen table with their checkbook and a bank statement understands the basic problem. Government can just print more money, but that gets you inflation. It’s more complicated than that, but the constraint that prevents disaster is the “debt limit.”
The Democrat’s answer to these problems is usually to raise taxes. You will frequently hear a Democrat saying that under FDR the marginal tax rate on the rich was 94% and that worked out alright, why can’t we do that again? Republicans look at the size and overreach of the federal government and see no reason why we can’t do a bit of cutting back.
— In 1920, newly elected President Harding inherited a sharp economic downturn from his predecessor Woodrow Wilson that was almost as severe as the 1929 crash. Treasury Secretary Andrew Mellon slashed tax rates steeply. The top rate went from 73% to 24% and the bottom rate went from 4% to 0.5%. By 1922 the economy recovered and we had the” Roaring 20s.”
— In 1837, financial panic swept the country. President Martin VanBuren was determined to get government out of the way. He slashed federal spending from $37.2 million in 1837 to $24.3 million in 1840, and taxes went down as well. Some consider this the worst downturn until the Great Depression. (Everything is measured by the Great Depression). The economy came roaring back and revenues more than tripled one year into the recovery.
— When the Panic of 1893 hit, President Grove Cleveland refused to spend federal money. He vetoed a $10,000 spending measure to help farmers in Texas. His veto read” federal aid in such cases encourages the expectation of paternal care on the part of government and weakens the sturdiness of our national character.” He vetoed 299 other spending bills. By 1895 the economy had grown beyond its earlier peak.
You know the more recent history of tax cuts, from Coolidge, Kennedy, Reagan and George W. Bush — all successful and resulting in economic boom. Please show a successful result from raising taxes or increasing spending.
The government shutdown showed that the 83% of the government that keeps running costs a staggering $250 billion a month. We simply do not know what the cost of ObamaCare is going to be, except that it will be far more than estimates. Everything about ObamaCare is a budget matter as well as a political problem. It is costing huge numbers of jobs, and the rollout is a catastrophe. Obama should have gone for the Republican offer of a one-year delay.
Treasury Secretary Jack Lew has demonstrated that he can lie as well as his boss, and is way out of his depth. Instead of outrageous charges of extortion and terrorism from the President and his aides, we need an upside. Oddly enough, it is proved to come from spending less, and budget restraint,Unbelievable Numbers rather than the Keynesian belief that the economy needs more stimulus.
Filed under: Politics, History, Economy, Democrat Corruption, Taxes, Capitalism, Law, The United States, Election 2014 | Tags: Obama Won't Negotiate, The Debt Ceiling, He Wants a Fight
“Republican House leaders are still stunned by President Obama’s in-your-face phone call to Speaker John Boehner late Friday to warn that the White House won’t negotiate on a debt-ceiling increase. The Bravado and arrogance has further antagonized GOP members.” So began Stephen Moore’s piece in the Wall Street Journal.
Chest-thumping? An attempt to embody a more macho-manly character? He is completely conciliatory with Vladimir Putin who is always running around Russia ruggedly doing manly things with his shirt off, yet with Speaker Boehner, Obama is going to be really, really tough. No negotiations. My way or the highway. Don’t even ask.
Saturday morning, in his weekly address, Mr. Obama explained briefly how he had rescued the economy, created 7½ million new jobs, saved America from its addiction to foreign oil, slowed the staggering growth of health care costs, and in just a week, millions of Americans without health care will be able to be insured for less than $100 a month. And now, having saved the country, he will turn to saving the middle class, as soon as he gives Congress their marching orders. Debt ceiling chicken?
The most basic Constitutional duty Congress has is passing a budget. If it doesn’t pass one before September 30th — a week from Monday—the government will shut down.
We won’t pay the military, federal loans will be frozen (did you have a mortgage?) New home buyers can forget it, Federal loans, small business owners— we will see that you suffer! No more life-saving discoveries, wind turbines will shut down, and anything we can think of that you might like will be turned off and blamed on Republicans.
When Obama spoke to the Business Roundtable on September 18 , he said:
You have never seen in the history of the United States the debt ceiling or the threat of not raising the debt used to extort a president of a governing party and trying to force issues that have nothing to do with the budget and nothing to do with the debt.
That got 4 Pinocchios from the Washington Post fact checker. Congress has been doing what Obama says it has never done since at least 1973. That year Ted Kennedy and Walter Mondale made a campaign finance reform bill a condition of raising the debt ceiling. Over the years since then 25 non-germane amendments were added, though not all passed. Negotiation is how the Founders intended for things to work. They knew that people would disagree, but in negotiation and bargaining, all would come to something that was right for the country and about which everyone could at least accept, if not really agree. Mr. Obama has never really understood the office he holds, and it is always about him, not the country.
The savings in the budget that Obama now brags about, came because of the sequester, which the Democrats hate. Obama has run up the debt by more than $5 trillion. Yet Democrats are absolutely intransigent about cutting back anywhere — in a government oozing waste and fraud, rot and corruption from every orifice.
Mr Obama wants a fight with Republicans so he can blame a shutdown on Republicans. He thinks a threat of default will cause voters to rally around him, as did the 1995 budget battle between Bill Clinton and Republicans. It is not about what is good for the country, it is, once again, all about Obama. He is a fierce competitor, and he plans to win.