Posts Tagged ‘federal debt’
Government is unpopular already. But how much more unpopular would it be if we actually had to pay for it?
President Obama keeps telling us how great government is. He’s having a tough time selling this message even though we are getting all this government at a 42 percent discount.
That is, we are getting government for 42 percent less than it actually costs because the federal government is borrowing 42 cents of every dollar it spends.
Obama’s big bureaucratic government vision is becoming less and less popular by the day.
Recent Rasmussen polls show that . . .
- 55 percent want ObamaCare repealed compared to 39 percent who oppose repeal;
- 69 percent say spending cuts should be considered for all government programs;
- 66 percent say government should cut spending to help the economy;
- 49 percent think government anti-poverty programs increase poverty compared to 45 percent who think these programs might be helping at least some;
- 45 percent fear the government will try to do too much to help the economy compared to 43 percent who fear the government won’t do enough; and
- 72 percent say small businesses are primarily responsible for their own success compared to 13% who disagree.
So Most Americans think government is much too big and spends way too much. Most Americans also think government is too inefficient and is often counter-productive.
Right now, government might not seem so bad because we really aren’t feeling the true cost of government. Politicians have learned that they can spend money like drunken sailors and pass the bill (42 cents of every dollar they are spending) on to future generations to pay.
So many Americans might not be thrilled with what we’re now getting from our government, but they feel we are at least getting something, so are willing to put up with it. You can live pretty well on your credit card for a while, until the bill comes due and the piper must be paid.
But what if we actually had to start paying what government really costs with a, well, about a 90 percent tax increase?
Of course, a tax increase on that level would collapse the economy overnight, so the revenue would not actually come in. Capital and businesses would flee the country. We would rapidly implode to banana republic status.
But a 90 percent tax increase is about what it would take to pay for the federal government we are now getting.
How popular do you think government would be then?
Actually, there are no spending cuts at all, ever, period
This chart shows why federal spending never goes down under any plan.
The Ryan plan boasts $6.2 trillion in savings over 10 years. So that takes the projected national debt in 2021 from about $28 trillion all the way down to $22 trillion.
So we get a $22 trillion debt under the Ryan Plan . . . 10 years from now — instead of the $28 trillion debt Obama wants to give us.
Doesn’t sound like much of a plan to me.
And this is Paul Ryan’s chart.
So there’s really not a whole lot of difference between the Ryan budget plan and Obama’s spendaholism. Yet Dems, such as Nancy Pelosi and Joe Biden, call Ryan’s plan economic terrorism against the elderly and the poor.
The best we can say about the Ryan plan is that it’s a little bit less worse than the Obama budget.
So . . . not so good.
I like Paul Ryan. He’s a really smart dude. But we can do better than this.
Back to the drawing board.
Our Commedian-in-Chief: Obama bankrupts America with out-of-control spending; then asks for fiscal restraint
MICHAEL WALSH-NEW YORK POST: Here’s a joke for you: President Obama nearly bankrupts the country with his out-of-control deficit spending — then demands responsible fiscal leadership from the Republicans.
OK, this is no time for humor: The country faces a deadline of Aug. 2 to either raise the debt ceiling from $14.3 trillion to around $16 trillion or face the prospect of defaulting on our loans and cutting services.
But jokers seem to be all we have in Washington these days, with the president as comedian-in-chief.
Who but a comic could propose (as Obama did back in February) a $3.7 trillion budget that would have added $7.2 trillion more to the national debt by 2021?
LARRY LINDSEY-WALL STREET JOURNAL: Washington is struggling to make a deal that will couple an increase in the debt ceiling with a long-term reduction in spending. There is no reason for the players to make their task seem even more Herculean than it already is. But we should be prepared for upward revisions in official deficit projections in the years ahead—even if a deal is struck. There are at least three major reasons for concern.
First, a normalization of interest rates would upend any budgetary deal if and when one should occur. At present, the average cost of Treasury borrowing is 2.5%. The average over the last two decades was 5.7%. Should we ramp up to the higher number, annual interest expenses would be roughly $420 billion higher in 2014 and $700 billion higher in 2020.
The 10-year rise in interest expense would be $4.9 trillion higher under “normalized” rates than under the current cost of borrowing. Compare that to the $2 trillion estimate of what the current talks about long-term deficit reduction may produce, and it becomes obvious that the gains from the current deficit-reduction efforts could be wiped out by normalization in the bond market.
So now how will we finance this $15 TRILLION federal debt?
CNS: China has dropped 97 percent of its holdings in U.S. Treasury bills, decreasing its ownership of the short-term U.S. government securities from a peak of $210.4 billion in May 2009 to $5.69 billion in March 2011, the most recent month reported by the U.S. Treasury.
Treasury bills are securities that mature in one year or less that are sold by the U.S. Treasury Department to fund the nation’s debt.
CNS NEWS: Federal borrowing is on pace to hit the legal limit on the national debt in less than a week.
As set in a law passed by Congress and signed by President Barack Obama on Feb. 12, 2010, the legal limit on the national debt is $14.2940 trillion. As of the close of business Tuesday, according to the Daily Treasury Statement released at 4:00 pm today, the portion of the national debt subject to this legal limit was $ 14.268365 trillion. (The total national debt, including the portion exempted from the legal limit, was $14.3205 trillion.)
This left the U.S. Treasury with the authority to borrow only an additional $25.635 billion before it hits the statutory debt limit.
MARK STEYN: I always enjoy the bit in Planet of the Apes where a loinclothed Charlton Heston falls to his knees as he comes face to face with a shattered Statue of Liberty poking out of the sand and realizes that the eponymous simian planet is, in fact, his own — or was. Also the bit in Independence Day where Lady Liberty gets zapped by space aliens. And in Cloverfield when she’s decapitated by a giant monster. And in The Day After Tomorrow when she’s flash-frozen after polar-ice-cap melting brought on by a speech from Dick Cheney. I’ve been enjoying such moments since, oh, the short story “The Next Morning” in the 1887 edition of Life, illustrated with a pen-and-ink drawing of a headless statue with the smoldering rubble of the city behind her. The poor old girl was barely off the boat from France, and she’d already been pegged as the perfect visual shorthand for societal collapse.
But the United States Postal Service has now gone the Hollywood apocalyptics one better and produced a somewhat subtler image of civilizational ruin. The other day the post office apologized for its new stamp honoring Lady Liberty. Due to an unfortunate error, the stamp shows not the 19th-century Statue of Liberty that stands in New York Harbor but the 1990s replica that stands at the New York–New York Casino in Las Vegas.
PAT BUCHANAN: “Rather than building bridges, he’s poisoning wells,” said Rep. Paul Ryan, after listening to Barack Obama’s scathing attack on his deficit-reduction plan as a shredding of America’s social contract with the elderly and poor.
Ryan is right. Yet, with Obama’s partisan savagery, virtually calling the GOP plan immoral, we have clarity.
There will be no grand bipartisan bargain on taxes and spending.
The two parties on Capitol Hill and the president will not be coming together to solve the gravest financial and fiscal crisis America has faced since the Great Depression. Between them today is a high wall and a deep ditch.
The heart of the Ryan plan is to turn Medicaid into block grants to the states, so each can decide for itself how best to use the funds, and to convert Medicare into a program where the U.S. government would provide citizens with the funds and freedom to chose whatever health insurance they wished to buy.
Obama denounced both.
WALL STREET jOURNAL: Did someone move the 2012 election to June 1? We ask because President Obama’s extraordinary response to Paul Ryan’s budget yesterday—with its blistering partisanship and multiple distortions—was the kind Presidents usually outsource to some junior lieutenant. Mr. Obama’s fundamentally political document would have been unusual even for a Vice President in the fervor of a campaign.
The immediate political goal was to inoculate the White House from criticism that it is not serious about the fiscal crisis, after ignoring its own deficit commission last year and tossing off a $3.73 trillion budget in February that increased spending amid a record deficit of $1.65 trillion. Mr. Obama was chased to George Washington University yesterday because Mr. Ryan and the Republicans outflanked him on fiscal discipline and are now setting the national political agenda.
Mr. Obama did not deign to propose an alternative to rival Mr. Ryan’s plan, even as he categorically rejected all its reform ideas, repeatedly vilifying them as essentially un-American. “Their vision is less about reducing the deficit than it is about changing the basic social compact in America,” he said, supposedly pitting “children with autism or Down’s syndrome” against “every millionaire and billionaire in our society.” The President was not attempting to join the debate Mr. Ryan has started, but to close it off just as it begins and banish House GOP ideas to political Siberia.
Mr. Obama then packaged his poison in the rhetoric of bipartisanship—which “starts,” he said, “by being honest about what’s causing our deficit.” The speech he chose to deliver was dishonest even by modern political standards.
Mark Levin is calling the the John Boehner, Barrack Obama, Harry Reid budget deal an ‘historic scam.” Says there aren’t $38 Billion in cuts in spending between now and the end of the year.
Karl Rove is calling it a $78 Billion cut because it’s $78 Billion less than Obama wanted. So if Obama wants $200 Billion more in spending, and we only give him $100 Billion more, is that a $100 Billion cut?
By Rove’s logic, it is.
Levin is right. The more we look at this budget deal, the more it looks like an “historic scam.”