Tag Archives: debt limit

FAILED: Balanced Budget Amendment Does Not Pass House Vote

Just days after the national debt hit $15 trillion, in what Judiciary Committee Chairman Lamar Smith, R-Texas, describes as the “last line of defense against Congress’ unending desire to overspend and overtax”, the proposed balanced budget amendment failed to pass the vote in the House today.

The Conservative Congress members have spent months seeking support for the proposal, saying that this is the only way to force Congress to put this nations financial house in order. The proposed amendment to the Constitution, which would require Congress to balance the nations budget, actually won a majority of the vote, with 261 votes supporting the proposal and 165 opposing it. However, the amendment did not pass, because it fell  short of the required two-thirds majority vote, which is 284 votes.

While the vote was largely along party lines, with most Republicans voting for the proposal and most Democrats voting against it, Speaker of the House John Boehner lays the blame on Democrats in the House for the proposal not passing. There were, however, four Republicans who voted against it as well. In a statement after the failed vote, Speaker Boehner said:

“It’s unfortunate that Democrats still don’t recognize the urgency of stopping Washington’s job-crushing spending binge. A number of economists and experts support a Balanced Budget Amendment because it would help create a better environment for private-sector job growth.”

The four Republicans who voted against the proposal were:

Representative David Dreier, R-California
Representative Paul Ryan, R-Wisconsin
Representative Justin Amash, R-Michigan
Representative Louie Gohmert, R-Texas

Representative Paul Ryan said he voted against the proposal because the actual draft of the amendment voted on was much different from the one Conservatives had drafted, which would have set solid spending limits, and would have required a super-majority to raise taxes. He said he believes the proposal which was actually voted on today would make it “more likely” that the way a balanced budget would be reached would be by just raising taxes, rather than actually cutting spending. “In a statement explaining why he voted against the measure, he said:

“Without a limit on government spending, I cannot support this amendment.”

There was obvious disappointment among those who voted for the proposal. Freshman Representative Steve Womack, R-Arksansas, said:

“In the 10 plus months I’ve been here, I consider this vote the most important vote I will have because it’s the vote that has the most impact on the future of my grandson. It is sad that Congress does not have the discipline to live within its means, and I strongly believe the only way to constrain an undisciplined Congress is to enshrine its obligation in the Constitution.”

Representative Candice Miller, R- Michigan, who also voted for today’s proposal, said:

“It is time for this Congress to use the tools our Founding Fathers gave us to amend the Constitution to save further generations from the shackles of unsustainable debt.”

One of the few Democrats who voted for the proposal, Representative Mike Ross, D- Arkansas, said:

“I’m very disappointed the House failed to pass this amendment, because, as a fiscal conservative, I have helped introduce a balanced budget amendment in each and every session of Congress since I first arrived. Deficit spending is nothing new, and both parties share the blame, but our deficits have become unsustainable and it’s past time to restore fiscal discipline and accountability to our government.”

Today’s proposal is a softer version of the proposal of the original, as an attempt to win more Democrat votes. While the original draft  set solid spending limits, the proposal voted on today would have required total spending for any fiscal year not exceed total receipts. It did, however, provided for some flexibility, such as in times of war. To raise the debt ceiling or a waiver of the balanced budget amendment in a given year, a three-fifths majority vote would have been required.

Critics on the Democratic side of the aisle argued that the amendment still would require cuts in Medicare and other entitlement programs if the economy puts the budget in the red.

If the proposal would have passed in today’s vote, it would not have immediately solved our nations financial problems. The bill would still face a fierce battle in the Senate, which it would likely not pass. However, in the event it had passed in both houses, it would still have to be ratified by three-fourths of the states. This process would not be complete until 2015. The proposal then allowed 2 additional years for the bill to go into effect, bringing us to 2017, to allow Congress time to bring the budget into balance.

This is the first time a balanced budget amendment has been proposed since 1995, but it too failed to pass. The 1995 proposal passed in the House, but failed to pass the Senate by one single vote.

 

Wake Up, America!

“Wake Up America” is the newest painting by Jon McNaughton. Mr. McNaughton is truly a gifted artist.

“We are enslaved to our debt! Wake up, America… before it’s too late.”  Jon McNaughton

On the YouTube description, Mr. McNaughton has written these words:

Proposed Constitutional Amendment

William Way, Jr.

Proposed Amendment

To

The Constitution of The United States of America

Amendment 28

National Consumption Tax

1. The sixteenth article of amendment to the Constitution of the United States is hereby repealed.
2. The Congress shall have power to lay and collect taxes on end-user consumption of all goods and service, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration, in an amount not to exceed 14% of such consumption.
3. The Congress shall delegate to the states authority to collect and transfer such consumption taxes to the federal treasury on a uniform, routine and customary schedule.
4. The Congress shall exempt from taxation all individual medical expenses, excepting those medical expenses articulated by legislation passed in each house of Congress by no less than a two-thirds majority of the fully membership of each house.
5. The Congress shall not impose any other form of taxation on the States, the People, or industries of the United States of America.
6. The Congress shall adopt a biennial budget.

  • a. The budget shall be adopted by the fifteenth day of October in each odd numbered year.
  • b. The budget for appropriations shall not exceed the total projected revenues of the United States of America.
  • c. All appropriations shall be accounted for within a single budget for all authorized federal expenditures.

7. This amendment shall take effect 270 days following ratification, by popular vote, within the states, if such ratification has occurred prior to the completion of ten years following submission to the states by the Congress.

 

Related: Seven point for a successful economy.  Twenty-Two Minutes Per Year – That’s All I Ask


 

 

Blame It On Pandora

In class a couple weeks ago, we read the myth of Pandora to the students because they showed the holy grail of teaching (interest), in the subject.  As it was being read I was struck by many questions. Since suffering existed even when it was imprisoned in Pandora’s box, did people feel it still? Was it that humankind now had a name for the phenomenon? Was it simply human knowledge and understanding that sprung fourth much like the story of the apple in Genesis? I believe it is so. The curse the story speaks of is simply knowledge.  The curse is no curse, for what you don’t know, what you don’t see, and what you refuse to admit can hurt you, and everyone around you. Zeus was not angry at Pandora for opening the box, because he knew she had been given all the gifts of the gods. Eventually, her compassion was used against her by the contents of the box and she was tricked into opening it.

That is not the only way to look at the story.  Pandora can easily be blamed for the evils released upon man, even though she neither made them nor stored them so haphazardly. She’s the silly person who asked too many questions, the curious cat, the sinful and dangerous eve. It’s a simple and trite way to see it, but unfortunately also valid- valid enough that the construct has been used by the U.S. left since President Obama won the office of the Presidency. The plan is simple, put reality in a box and blame Pandora when she opens it.

The curious case of Representative Anthony Weiner is a good start. At the start of the saga was an extraordinarily inappropriate tweet sent from his Twitter account with an accompanying picture. He claimed shortly after through another tweet he was hacked. His evasive and immature behavior after, as well as his refusal to call for an investigation and his hiring of a lawyer were obvious signs of guilt but many chose to believe his story anyway. To rationalize their belief, they went straight after Pandora. The Pandoras in our first case being, an anonymous tweeter who captured the tweet and Andrew Breitbart, of course, who else? Mr. Breitbart was accused of hacking the Representative’s account and posting the picture. No actual evidence ever existed to support that theory, except for more theories.  When Representative Weiner finally admitted to what happened and more, many well-known people who believed Representative Weiner’s initial claim and accused others of severe federal crimes could hardly even muster a sardonic and backhanded apology. For good reason, they didn’t want to know the truth, they were angry at Pandora for opening the box. Yet another box remains, the fact that his behavior showed a quick and sociopathic tendency to lie and infer guilt onto others to protect himself, a lack of morality and an extreme capacity for stupidity. This box is being opened, and you can already hear Jeanine Garofalo baying at the light shed. In her herd, nobody likes Pandora.

The young James O’Keefe is another example. He created those undercover videos of Planned Parenthood, Acorn and other organizations. A youthful firebrand who has made some mistakes in his process, he was instantaneously attacked. While Planned Parenthood continued on even though the video shows clearly an instantaneous and un-questioning support for criminals of the worst kind, the kind of support that is reflective of active policy. If those people cared, they would have had the local Police Department waiting outside the door to arrest what they thought was a child pimp. They wouldn’t wait a couple of hours and contact the Department of Justice (our most liberal D.O.J. in history). According to the left wing the story was more about James O’Keefe, for the purposes of directing attention away from what happened and on to the narrative that anyone who is right on the spectrum is a bad person.

Representative Darrell Issa is another key example. Issa has been working hard to uncover information on project “Fast and Furious”, which pumped illegal weapons into the Mexican Cartels to “track” them, even though there was no plan of action to track them. Whether created out of shear stupidity or for political reasons, we don’t know yet. Multiple people have been killed with the guns willfully allowed to the cartels. The media, after ignoring the story for around a year, have finally started to report on it. Yet again, the focus of the mainstream media, was on Darrell Issa. A full out attack was enacted by liberal propaganda websites going after his criminal record when he was younger. He was convicted of a weapons charge and was charged with auto-theft, but that charge was dropped. This all happened in the early 70’s. Issa’s criminal past is important, at election time, but I find it odd that people wish for that to be the story while we have Americans getting murdered by weapons the government purposely flowed to the cartels. It really is “Iran Contra” on steroids. Darrell Issa became another Pandora ripe for attack for that reason.

There is a new Pandora just recently created through our Debt Ceiling battle in the legislative branch. Throughout the battle the left claimed that if the debt ceiling was not raised they would be downgraded. When the downgrade was made by Standard and Poor’s, the left chose to attack the rating agency. Even though none of the suggestions given by the agency were used. Oddly enough while claiming Standard and Poor’s is wrong the left is blaming the downgrade on the Tea party. Standard and Poor’s simply gave their opinion, which is their job, but that opinion based on the reality of the situation opened another box the left needs to be ignored.

Politics of personal destruction, blame it on Pandora. Thought terminating cliché,Ignoratio elenchi and red herrings are the weaponry being used. You have to see it to defeat it. Support all Pandoras regardless of what they uncover. If you have an issue with it go after the information, not the person. We cannot fall into the rut the left has lived in. You need to try to love those you disagree with, never try to do what the left has done to Glenn Beck, Sarah Palin and anyone who confronts them or threatens them. Bring it to the battlefield of ideas, ignore the middle school clique mentality.

A New Media Slant Detector

I formerly believed that reporters don’t tell the public what to think. Instead, they tell the public what to think about — as if that made claiming “objectivity” while misusing your influence an acceptable practice.

Experience disabused me of that erroneous notion. For as Martha Bayles observes, “What [the media] does is condition us, gradually and over time, to accept, or at least view as normal, attitudes and behaviors we might otherwise reject.”

Wash, rinse, repeat and soon the sparkling clean brain is ready to vote Democrat.

The ongoing debt crisis offers two examples of how liberal media preoccupations distort coverage. First, let’s eavesdrop on how a family cuts their budget. Mary is worried about credit card debt and wants John to reduce the $250 a month he spends on lunch at Hooters, so they can increase the monthly payment to Indentur–card. John recognizes the problem and agrees to a 20 percent cut. Next month he’ll spend $200, a $50 reduction.
Compare that to coverage of “cuts in spending” the debt ceiling deal will allegedly produce. When the Washington Post refers to cuts, it doesn’t mean a reduction compared to what was spent last year, it means a reduction in the amount of increased spending. Government isn’t spending a penny less, it just doesn’t get to increase spending as much as Leviathan would prefer.

If John applied this pretzel logic to his agreement with Mary he would say, “Gee Hon, the new Hooters waitress is smokin’ and I was fixing to spend $350 this month. But since you’re such a Debbie Downer, I’ll cut 50 percent and only spend $300.”

Obviously any news outlet that uses the word “cuts” instead of “reduced spending increase” in reference to the debt deal is slanting the facts.

Case two: the Congressional Debt Supercommittee. Rational people wonder if the committee can produce a package of cuts that will stop the nation’s slide into insolvency. Sunday the irrational Post runs a hysterical story complaining the committee “is marked by a problem that has plagued Congress — a lack of gender and racial diversity.”

This is the equivalent of demanding the Titanic offer a drum circle, in addition to the orchestra, to entertain passengers entering the lifeboats. So far voters, to their eternal credit, do not appear to be concerned with racial and reproductive bean–counting, but are worried about results.

When news consumers are presented with an endless litany of stories that posit illiterate minority youth can’t find a job because “society failed them,” the recession continues due to a “lack of government economic intervention” and homosexuals should be able marry because “love is love;” it’s no surprise many voters eventually support social programs, think politicians can actually manage the economy and wonder if a nice homosexual couple will buy the foreclosure next door.

So how do conservatives and independents combat media ideological contamination? They can start with “Left Turn: How Liberal Media Bias Distorts the American Mind,” by Tim Groseclose a professor of political science and economics at UCLA.

Groseclose uses a complicated mathematical model to analyze print and broadcast media to arrive at what he terms a “slant quotient” or SQ. A score of 100 for a news outlet indicates the product resembles Nancy Pelosi’s constituent newsletter and a score of 0 means that news organization generates fan mail for Ayn Rand.

Details on methodology are in the book or you can visit Groseclose’s website: timgroseclose.com.

The website also has the SQ rankings of major news outlets and the Political Quotient (PQ) of prominent elected officials. Even better, you can take a test to see how your PQ matches up with current and past office holders.
On his scale, Michele Bachmann (R–MN) comes in at a negative 4.1, which I assume means she voted against all liberal legislation and then assaulted a Democrat. Barney Frank (D–Debauched) scored 103.5; meaning he voted for all the liberal legislation and then, well, let’s not think about that.

My test score was 5.3 and means I’m less conservative than Sen. Jim DeMint (R–SC) at 5.1 and more conservative than Groseclose who scored 13.

The site can also helps one make prudent purchasing decisions. I subscribe to four newspapers, which is one too many. Either the Wall Street Journal or the Washington Times must go.

You can imagine my surprise when I learned the Journal has a SQ of 85.1, which is 18.5 points higher than the Post’s 66.6 and puts the WSJ smack dab between Joe Biden and Hillary Clinton! While the Times is a respectable 35.4.

Come November, when I let my WSJ subscription lapse, I’ll be saving hundreds of dollars and fighting media bias.

Allen West Talks With CDNews on Debt, the Economy and Foreign Policy

Tuesday afternoon, I had the opportunity to spend twenty minutes with Congressman Allen West (R FL-22) and ask him about the outcome of the debt-limit negotiations, the current state of the economy and U.S. foreign policy. Once the pleasantries were exchanged, we got right to the questions.

Rich: Moody’s cut the U.S. economic outlook for 2011 and people are still struggling to find jobs. What would you like to see done on to fix the economy?

Rep. West: I think One of the things that has to happen is the government has to set the conditions to incentivize long-term, sustainable economic growth in America. When we continue to talk about bigger government and tax hikes, that’s not how we do it. I think when you look at the corporate tax rate in America, which is the second highest in the world, very simply let’s take that tax rate and cut it down to 20-21% and remove all the loopholes, strategies and subsidies and give our corporations and businesses a competitive tax rate. For the individual tax rate, since many businesses operate as sub chapter S corporations, let’s flatten that out to somewhere between 13% and 16% and only have two deductions: the child tax credit and the mortgage interest deduction.

For clarification, I repeated what I’d heard and got even more insight into how the Congressman would kick start the economy. He mentioned that not only would he be in favor of the lower corporate tax rate, but would favor making it retroactive to January 1st of 2011. As Rep. West put it, it would allow companies to recalculate their liabilities and realize additional assets that could allow them to invest, expand and hire.

Rep. West also mentioned the repeal of Sarbanes-Oxley, the set of financial regulations intended to prevent market losses like those experienced due to the Enron scandal. Unfortunately, Sarbanes-Oxley is expensive to implement and lacks any real or perceived benefits. It has done little more than to burden American companies with complex regulations that make it difficult to compete in the global economy.

Stressing that the “Keynesian model just doesn’t work” Congressman West mentioned that instead of more “pie-in-the-sky gimmicks” like stimulus spending, we should be looking at real plans like the new legislation he has in the House Ways and Means Committee – H.R. 1663 is titled  “The Small Business Encouragement Act” which, according to the Republican Study Committee, would:

The bill would amend the Internal Revenue Code to allow small businesses who hire an unemployed American, a work opportunity tax credit, saving employers up to $12,000 a year per hire in some areas of the country. To qualify, small businesses must have gross receipts in the preceding taxable year not exceeding $20 million, or they must employ less than 100 full time employees. The tax credit will double for employers hiring unemployed Americans in counties with an unemployment rate that is higher than the national average, which is currently just above 9 percent.

In the RSC blog post Rep. West was quoted as saying, “The Small Business Encouragement Act is a simple, effective solution to putting people back to work by encouraging the very backbone of our economy, the small businesses.”

Rich: In addition to the economy, what other issues would you like to see the House take up after the current recess?

Rep. West: I wish we had our tails back up there in Washington, D.C. right now. We have 12 appropriations bills that we have to pass through the House and get over to the Senate. We’ve only done 6 in the House so far and I think that the Senate has only taken up one of those.

We shouldn’t be waiting around for this joint committee of Congress to get going on finding spending cuts. We should get back up there and immediately implement the $300 Billion in cuts to duplicative and redundant government programs that the GAO (Government Accounting Office) report identified earlier this year.

I think we should be very concerned that China has rolled out it’s first aircraft carrier and the United Nations (U.N.) have a unilateral vote on Palestinian statehood in September.

The Congressman also expressed that while it was fantastic to get to speak with and meet his constituents, the prevailing feeling he was getting was that voters would rather Congress was in session getting these things done.

Rich: The news yesterday mentioned a “trial balloon”-style rumor that Obama may seek to solve our jobs dilemma by creating more government – The Department of Jobs. How do you feel about that approach?

Rep. West: That’s one of the most insidious things I’ve ever heard. Look, we have some government agencies that I don’t know why they exist. Why do we have a department of labor if we need a department of jobs? Why do we have a Department of Energy, that was originally created to make us energy independent and we still don’t have a diversified energy resource portfolio in the United States of America. When I hear the President speak, all I hear is a big government, liberal, progressive, socialist that does not understand that his policies that he has tried to implement over just less than three years has brought us incredible debt and increased our trillion dollar plus deficits over the last few years.

Even the liberal-leaning Huffington Post has an article that agrees with the Congressman on the silly nature of the President’s rumored idea. HuffPo’s Ken Blackwell points out not only the redundancy that Obama’s Dept. of Jobs would have with the Labor Department, but also the Commerce Department:

Then, of course, we have the U.S. Commerce Department. The Mission Statement of this department makes it sound like it, too, is a Jobs Department.

The U.S. Department of Commerce promotes job creation, economic growth, sustainable development and improved standards of living for all Americans by working in partnership with businesses, universities, communities and our nation’s workers.

We then changed the subject to the recent debt limit negotiations and outcome.

Rich: You voted for the negotiated debt-limit deal, correct?

Rep .West: Yes I did.

Rich: Out of all the plans and frameworks presented – the Ryan plan, Connie Mack’s Penny plan and cut, cap and balance, which was your favorite?

Rep. West: The Cut, Cap and Balance plan was my favorite and that was the one that 70-some-odd percent of the American people were behind. I think it’s reprehensible that Harry Reid, playing politics, tabled it. But the important thing is that you just don’t quit. The worst case situation is that the Democrats, that had no plan, no vision whatsoever, enabled a perceived or manufactured  crisis to occur. Then they turned to the blame game and the next thing you know we have to succumb to their wild and crazy economic schemes.

The final debt agreement was not the 100%. It was probably a 70-75% solution for me. The cuts in spending are not great, but at least we don’t have tax hikes. It’s also the first time ever that we’ve had a debt limit increase along with cuts in spending.

Congressman West was also quick to point out that this sets a precedent. Debt limit increases are not going to come free and easy anymore. He also was not fond of the Joint Committee, but felt it would be something they could work through.

Rich: The negotiated deal also contains, as a trigger provision, significant cuts to defense spending if deficit reductions don’t happen. Considering all that our young men and women in uniform are asked to do, are you concerned about that provision?

Rep. West:  What I found is really horrible is that we have to have this nuclear option hung over our heads as if we can’t do the sensible and the right thing and find the $1.5 trillion in additional cuts over the next ten years. I don’t think anyone wants to be there and say that “I decimated the defense structure of the United States of America on my watch”. You can best be sure that I will do everything possible on my side to make sure that this Joint Commission of Congress performs their duties. I sit on the Armed Services Committee, I have many a friend and also a nephew that is still serving. I am not going to allow them to be sent into a combat zone without the proper levels of readiness.

With the debt-limit situation covered, foreign policy was up as the final topic.

Rich: Considering the three conflicts that the U.S. is currently engaged in – Libya, Afghanistan and Iraq, which, if any do you believe we should be fighting?

Rep. West: Libya we should not be fighting at all. On this I have been very vocal. I believe the President is violating statutory law and going against the War Powers Act of 1973. I was one of the first to go into Iraq in 2003 with the Fourth Infantry Division. Now it’s going to be drawn down on the 31st of December of this year. I do have some concerns on the resurgance of Muqtada al-Sadr and the Mahdi army which is supported by Iran. I believe that when you look at Afghanistan we got off-focus in being more concerned with nation building and occupation-style warfare instead of focusing on the enemy and his sanctuaries. On the tenth anniversary of 9-11,those attacks emanated out of Afghanistan, I don’t want to just pull tents and run away without having defeated the enemy to some measure of success.

Rich: There was a video put up by The Shark Tank that showed you discounting Representative Ron Paul as a serious candidate based on his foreign policy views, specifically on Iran. How would you like to see the United States deal with Iran?

Rep. West: The last thing I want to see us do is to take the Neville Chamberlain type of perspective and believe that we can compromise, appease and negotiate with Iran. You know, we’ve been in contention with Iran ever since the fall of the Shah, the rise of the Ayatollah and the hostage crisis. I believe there is going to come a time when we will have to take action against the military capability of Iran. Iran is supporting actions against our men and women in uniform in Iraq and Afghanistan. For anyone to sit and say that they want to be President of the United States of America, understanding that the most important title for the President is Commander-in-Chief, and say that they would not have problem with Iran having a nuclear device because everyone else has it – shows that person does not understand mutually assured destruction theory (M.A.D.). The religious fanatics that are truly in control in Iran – if they get that device, they’re going to use it for the purposes of having an apocalyptic event so that they can conceivably bring back the 12th Imam – the Mahdi.

Rich: Obama has stressed our relationship with one of our closest allies – Israel. There is mounting pressure for the U.N. to grant statehood to Palestine and this administration seems to be doing little to prevent it. What is your stance on the statehood of Palestine?

Rep West: I’m headed over to Israel this Saturday for a week. I think the most important thing is for the President, [U.S. Ambassador to the U.N.] Susan Rice, and Secretary of State Clinton should do is to come out, have a press conference and unequivocally state that they will not support a unilateral creation of a Palestinian state by the United Nations. We need to vote against it in the General Assembly. We definitely need to veto it in the U.N. security council. There should not be any quibbling about where we stand.

Congressman West expounded upon his answer by explaining that he had real concerns about a Palestinian government, Fatah,  that has reconciled with Hamas – a known terrorist group that has in its charter the destruction of Israel. Hamas does  not recognize Israel as a nation and now the U.N. would consider recognizing Palestine as a state. He also mentioned that if Palestine somehow were granted statehood, that the United States would respond by providing, “absolutely no funding to an illegitimate Palestinian State”.

Representative West is running for re-election in 2012 and you can keep up with his work in the House at west.house.gov or at his website: www.allenwestforcongress.com/

Interview Note:
There was much more from the interview, but I’ll be releasing that in separate articles as those questions were from unrelated topics. I thank Representative Allen West and his dedicated team for making this interview possible.

Recipe For Disaster

Washington may call the recent “debt deal” necessary, but the “ingredients” that went into making the “deal” sometimes seem a bit “seedy”. A more appropriate name might be a recipe for disaster!

Rich Man, Poor Man

Despite what the liberal media and the Democrat party tell you, the poor are getting richer. In fact, America’s poor are so rich, we should be having parades to celebrate how wealthy the poor are in our country. Bill Whittle lays out the facts.

Spinning the Downgrade

On Friday, S&P downgraded the U.S. credit rating to AA+ from AAA. The downgrade report complained that the debt ceiling deal did not do enough to stem the tide of future deficits and debt.

While the report blamed no political parties, politicians, groups, or approaches as the reason for the shortfall, Democrats have been falling over themselves to blame Conservatives for the negative credit rating.

John Kerry came out and applied bias where there was none on Meet the Press Sunday.

Justin Ruben, executive director at MoveOn.org, an extreme left-wing organization, expressed outrage at the President for not taking a more aggressive stance against fiscal Conservatives.

“It’s a terrible deal that will destroy jobs and big part of reason is because president accepted the premise that it was okay to hold economy hostage,” Ruben said. “Instead of saying, ‘this is outrageous’ and ‘You will not threaten the full faith and credit of the U.S.,’ and telling America what the Republicans are doing, he sat down and said, ‘let’s bargain’ and tried to show he was more reasonable.”

Ruben’s demand for less compromise is in direct opposition to the President’s attempts to bring both sides together. Mr. Ruben’s spun the whole outcome by saying that the deal itself is what threatens the “full faith and credit of the U.S.”. Incorrect. Had Obama toed the line with Ruben’s idea of raising the debt limit without curtailing spending or raising revenue, two more ratings agencies would likely have joined in the downgrade. Only because some slowdown in spending was present in the bill at all did Fitch and Moody’s leave the nation’s AAA rating in-place.

On the Sunday circuit, progressive talking points were prevalent. “We can’t cut our way out of this recession” was heard loud and clear. This a variation on Obama’s, “we can’t cut our way to prosperity” theme. While we haven’t even tried spending cuts as a method to save the economy, we have empirical evidence that taxing and spending our way to recovery does not work.

The rising-star, progressive commentator and writer Ezra Klein tweeted, “This didn’t happen because an earthquake wrecked our factories or a plague hit our workers. It was Congress. Particularly GOP in Congress.” in reference to the S&P downgrade.

The more honest perspective is that Speaker Boehner had accepted an Obama administration deal that included over $800 Billion in revenue enhancement (lefty-speak for increased taxation). Obama then came back to the table with an additional $400 Billion in demanded taxes while still keeping Medicare, food stamps and Social Security off the table – turning compromise into arm twisting.

The spin is working. Liberal forums are full of comments where the democrat-faithful are extremely upset at the lack of reporting that the S&P report specifically calls out Republicans for having obstructed the debt deal. They will have to remain upset for quite some time as the report contains no such admonition. In fact, the report is careful to make no comments for or against either party nor does it recommend either cutting nor taxation as the chosen remedy.

S&P had needed to see $4 trillion in deficit reduction – the deal only delivered $2.7 trillion. If the democrats had gotten what they originally demanded, there would be $0.

If not for the Conservatives, this downgrade would have come faster, may have been worse (AA-) and could have included Fitch and Moody’s lowering the nation’s ratings as well. If the politicians in Washington fail to cut the deficit by much more than Conservatives already have, we will see further downgrades in the coming months and all the scary stuff that Democrats threatened the country with before the debt deal. Perhaps even that “Satan Sandwich”.

Obama’s Debt Compromise Costs U.S. AAA Credit Rating for First Time in History

The Administration and members of Congress had held the specter of a credit rating downgrade over the heads of Americans. If a debt deal is not reached, the nation’s good credit would be damaged said several government leaders. On Friday, Standard and Poor’s (S&P) downgraded the United States’ rating from AAA to AA-plus on concerns about growing budget deficits.

The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.

Despite attacks by Republicans and Democrats, Congressional Conservatives held out for a deal that would actually trim the nation’s debt. President Obama pushed for the compromise deal that instead, actually increases the amount of publicly held debt every year for the next decade. S&P said that the deal did not do near enough to prove fiscal responsibility and took the downgrade action.

U.S. Treasury securities have long been sought as the safest investments in the world. Now, the government bonds of the U.K., Germany, Canada and even France are rated higher than those from the U.S.

S&P also set the outlook of the new credit rating to negative, a signal that another downgrade could be coming within the next 18 months if the government does not get serious about trimming the national debt.

The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

The S&P press release also noted a key difference between the U.S. and the remaining AAA-rated nations – while America’s debt will increase in the next 3-5 years,their debt-to-GDP ratios are going down [emphasis added].

By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%. However, in contrast with the U.S., we project that the net public debt burdens of these other sovereigns will begin to decline, either before or by 2015.

In response to the credit rating agency’s downgrade, Democrats are using intimidation to get S&P to change the rating. Congressional Democrats are threatening investigations into S&P’s inner-workings. Some are even asking for more spending to remedy the current over-spending situation.

Congressional Conservatives are taking a different approach by pushing again for more cuts in spending, removing the regulations that are forcing American businesses overseas and getting the economy going again. Sen. Jim Demint has also requested the resignation of Treasury Secretary Timothy Geihtner stating that the secretary has failed the country.

“For months he opposed all efforts to reduce the debt in return for a debt ceiling increase. His opposition to serious spending and debt reforms has been reckless and now the American people will pay the price.”

Commentary from the Obama administration focuses blame on the process by which the compromise solution was passed. But, had the Obama administration’s first plan – a debt ceiling increase with no spending reductions at all – gone through, the S&P downgrade would have been joined by negative ratings by Fitch and Moody’s.

Indiana’s State Treasurer also said that the Administration handled the debt ceiling poorly by failing to act with any fiscal responsibility whatsoever.

This downgrade is the direct result of raising the debt limit on Tuesday, August 2, without providing for substantive cuts in spending. The White House and many in Congress failed in their jobs by settling for a political compromise rather than seeking a fiscal resolution.

Much like Obamacare, the legislation pushed by the Administgration to supposedly deal with an impending crisis is instead exacerbating the underlying problem.

August 4th Live Show: Super Congress, Market Meltdown and the Tea Party

Conservative Radio Show - The Plain, Hard Truth with Rich Mitchell and Michelle RayShow Time: Thursday August 4th, 7pm pacific, 8pm Mountain, 9pm Central, 10pm Eastern

Tune In: Plain, Hard Truth Radio Show

Call in: Be part of the program – call in to the show: (424) 220-1807

Guests: Nicole Pearce from Truth About Bills.

Show Topics: Join Michelle and Rich as they take your calls on the budget crisis, the Norwegian massacre, and possible GOP VP Choices .

Recording of the Show:

Listen to internet radio with Rich Mitchell on Blog Talk Radio

Links from the Show:

Congratulations, Stupid

They Aren’t Taking This Seriously 

Cut, Cap and Balance Could Pass the Senate

Hear recordings of past shows: CDN On-Air Archives


“As the Government Turns”

Social Security and Defense Held Hostage, Episode 75

The federal government is our alcoholic uncle addicted to power and money. He throws divisive words at the masses to distract us from the true issue…a bloated government. As political figures and their cohorts spend more money than most countries can produce, hard working Americans are left with the tab. The people who question this insanity are label so.

Without significant spending cuts and changes to the way we spend the American people’s money, there will be no debt limit increase,” stated Representative John Boehner

There are deficits as far as we can see. Our projected 10-year federal budget has this borrowing-spending saga remaining throughout the remainder of the decade. Since 1962, the debt ceiling has been raised 74 times. This year’s federal spending topples $3.77 trillion and it has doubled since 2000. Only China and Japan are able to produce enough to maintain a federal government like ours. After 824 days of not passing a budget, credit agencies are threatening to downgrade our credit ratings. Not for extending our credit but our reckless spending. After Greece, Portugal and other European nations are forced into austerity measures, our political class continues to march us to serfdom. Accumulating debt even our grandchildren will not be able to overcome.

 “Under these circumstances, any credible economist would tell you that we should be reducing debt, not increasing it.” states Senator Harry Reid, March 2006

Politicians submit solutions not to solve problems but create distractions and divisiveness. Back in February, the Republicans proposed to cut $70 million from Planned Parenthood. Nothing could’ve been more divisive than introducing a social measure like abortion into the budget discussion. Luckily, the Treasury Secretary diverted catastrophe. With the latest debt crisis, the Tea Party was the culprit. Everyone but the politician was guilty of stopping progress.  As Washington diverts our attention, the rhetoric goes toward taxing the rich and closing loopholes, in essence…taxing Americans for more money.

“In the long term, we all know — long-term — we have over 50 trillion in unfunded liabilities and very popular programs that Americans depend on, Medicare, Social Security, Medicaid, that are simply on an unsustainable path,” stated Mitch McConnell

According to the Heritage Foundation, total Federal spending has exponentially outpaced the median income. This spending increased because our bureaucrats expand programs, not because there are more people added. Therefore, bankrupting the system to the point at which it cannot sustain itself, thus, program broken for everyone and both Democrats and Republicans have caused this debacle.

One of the themes is the catastrophe that defaulting will cause. Over the past century our country has defaulted in the past. In 1933, Congress passed the “Joint Resolution to Assure Uniform Value to the Coins and Currencies of the United States” where Franklin D. Roosevelt banned the ownership of gold coins that ended up devaluing the savings of Americans. Of course, it was branded as a loss of convertibility. In 1968, Lyndon B. Johnson looked to silver where everything invested in silver was lost. The next default
Richard Nixon in 1972, declaring us all Keynesians, converting our monetary system from a gold backed currency to one backed by paper and a printing press. We have been defaulting ever since.

“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”, stated by Senator Barrack Obama

The political classes have gotten themselves off the hook again. As the drama mounts, Americans are in a lose-lose situation. We can either 1) accept the Debt Commissions’
recommendations or 2) cut spending on Social Security and Defense. As there will be Democrats on one side yelling about Social Security and Republicans on the other screaming about Defense, the political minions who set up the scenario, look like saviors. Federal spending has grown ten times faster than median income since 1970.

Second, we always hear about raising taxes on the rich but our tax revenue always remains around 18% of GDP. It is not about someone giving their fair share, it’s about making the pie bigger. In the charts below show the amount of revenue collected compared to GDP. People change their habits when the government starts collecting more taxes. In the chart on the right, it shows the tax rate on the top individuals (those evil rich) during the same duration…it garnered no additional revenue. When tax rates change; people change their habits including the rich. The real answer is to expand our economy. If the pie is bigger, you’ll have more people employed to pay taxes and increase revenue.

And last but not least, the Federal, State and Local Government’s spending since 1965 has nearly double when compared to Median Household Income. If you think about it, a large portion of your paycheck is reduced for Medicare, Medicaid and Social Security, along with your federal taxes. At this rate, these entitlement programs cannot continue in their current form. Meanwhile, our government have decided that they must invest it.

America…the time has come to get out of the box as some throw accusations and plans that have been tried before. Politicians and their pundits scream false arguments intended to created animosity and friction amongst the masses. Meanwhile, we have blacks against whites, Republicans against Democrats or Tea Party against everyone else. While one side fumes at the thought of the other for reasons they don’t know, our political and elite class create boggy men so they can push their agenda while we are fighting over false choices. The ones with the solutions fight as the fox guards the hen house.

Congratulations to those Republicans and Democrats who stood for what was right, to cut Washington’s addiction–spending. It is that simple…reduce spending.

Stay tuned for the next episode of “As the Government Turns.” It is a shame that we have allowed them into all aspects of our life. Can’t wait to see the healthcare drama enter the story.

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