debt

Tim Scott for President

h/t Chrissy the Hyphenated

Rep. Scott has clearly been taking lessons from the evil, greedy Bill Whittle and obviously doesn't understand how to use the Obama calculator:

Elevation matters

The middle ground for its own sake isn't it.  What we need is to stake out the moral high ground.  A great column by Arthur Brooks in today's WSJ:

The battle over the debt ceiling is only the latest skirmish in what promises to be an ongoing, exhausting war over budget issues. Americans can be forgiven for seeing the whole business as petty, selfish and tiresome. Conservatives in particular are beginning to worry that public patience will wear thin over their insistence that our nation's government-spending problem must be remedied through spending cuts, not by raising more revenues.

But before they succumb to too much caution, budget reformers need to remember three things. First, this is not a political fight between Republicans and Democrats; it is a fight against 50-year trends toward statism. Second, it is a moral fight, not an economic one. Third, this is not a fight that anyone can win in the 15 months from now to the presidential election. It will take hard work for at least a decade.

While Brooks immediately goes on to cite some statistics—it's what we conservatives tend to do—he doesn't waste much time getting to the crux of his argument: that the kind of "tectonic" structural change that is necessary 

...will only succeed if it's accompanied by a moral argument—an unabashed cultural defense of the free enterprise system that helps Americans remember why they love their country and its exceptional culture.

Brooks points out that Adam Smith's greatest book was not The Wealth of Nations but

..."The Theory of Moral Sentiments," a defense of a culture that could support true freedom and provide the greatest life satisfaction.

Free enterprise advocates, Brooks says,

... speak privately about freedom and opportunity for everybody.... [but s]adly, in public, they always seem stuck in the language of economic efficiency.

Brooks' recommendation? (emphasis mine)

If reformers want Americans to embrace real change, every policy proposal must be framed in terms of self-realization, meritocratic fairness and the promise of a better future. Why do we want to lower taxes for entrepreneurs? Because we believe in earned success. Why do we care about economic growth? To make individual opportunity possible, not simply to increase wealth. Why do we need entitlement reform? Because it is wrong to steal from our children.

Read the whole thing.

The unbearable endlessness of indebtedness

Cartoonist Bob Gorrell made good use of M.C. Escher's drawing of Moebius-strip-like hands to portray the endless cycle of debt we're in.

Feeling like one of Escher's ants?

Me, too.

"S&P threatens to cut U.S. credit rating on deficit"

So reads the headline on this story at Reuters. They haven't done it yet—they haven't lowered our credit rating below its current AAA rating. Yet. 

...S&P, which assigns ratings to guide investors on the risks involved in buying debt instruments, slapped a negative outlook on the country's top-notch credit rating and said there's at least a one-in-three chance that it could eventually cut it.

A downgrade, which would leave Germany and France with a higher rating, would erode the status of the United States as the world's most powerful economy and the dollar's role as the dominant global currency....

[....] "Because the U.S. has, relative to its AAA peers, what we consider to be very large budget deficits and rising government indebtedness, and the path to addressing these is not clear to us, we have revised our outlook on the long-term rating to negative from stable," S&P said....

"Stable" basically means "steady as she goes," while "negative" means, well, what you think—not good.  The time frame during which they'd lower our credit rating—maybe—is at least 2 years away.

So there's been all sorts of spin put on this today, ranging from opinions that ratings agencies have performed miserably over the years, to Eric Cantor (R-Va) saying

...as S&P made clear, getting spending and our deficit under control can no longer be put off for another day, which is why House Republicans will only move forward on the President's request to increase the debt limit if it is accompanied by serious reforms that immediately reduce federal spending and end the culture of debt in Washington....

to Peter Welch (D-Vt) trying to make the argument that this "revised outlook" was an indication that the debt limit needed to be raised without restraining spending:

America pays its bills. I hope Majority Leader Cantor and those in Congress seizing upon debt ceiling pressure as a "leverage opportunity" are listening to the markets today and thinking twice about their risky strategy.

Another story at Bloomberg is here.

Look, all I know is if somebody—S&P, Moody's, whoever—lowers our rating down the road sometime, that means that we will have to offer higher yields, which means higher debt payments, and that will only worsen our deficit problems as we borrow more money.

Stop. the. madness.

 

Paul Ryan on America's future

I like Ryan a lot, but beware the normalcy bias. Via Ace:

Meanwhile, at the IMF (h/t Aaron): 

To restrain the U.S.’s future budget crisis, the federal government must raise taxes by at least 35% and cut entitlements such as health care and Social Security by 35%, International Monetary Fund economists warned Monday in a new working paper.

While the projected ballooning of future costs of entitlements as the so-called baby boomer generation enters old age isn’t new, the IMF paper’s quantifying just how much the federal government will have trim its balance sheets sheds fresh light on the political hurdles ahead...

Given recent events and the general tone of the IMF paper ("hey, ya got a nice place here...hate for anything to, y'know, happen to it), maybe we need to be a little more concerned:  

And then there's our earlier post here.

Hmmmm.

Tsunami

Hmmm...from Investors Business Daily, via American Thinker:

Budget: Congressional negotiators have trumpeted a "breakthrough" in budget talks that will yield $33 billion in spending cuts. Sorry, but we're not impressed.

We've done the math on this, and the $33 billion in cuts amounts to just 0.89% of expected spending of $3.7 trillion this year. It is just 2.2% of the deficit.

From the AT post:

That's a "breakthrough"? Are you kidding me? Republicans have to do way better than this if they want to save America from disaster and keep the American people's support.

Republicans need to understand that every slash they successfully take against the welfare state, moves America away from economic collapse and towards prosperity. But it will take slashes, not scratches on the surface in order to reverse this economic hardship.

But unfortunately, scratches are all the Republicans seem to be capable of doing. Republicans, to a large extent, still do not grasp the justness of Individualism. And this is why they have failed to defeat Democrats when it comes to the political debate. They are still debating the Democrats on collectivist premises....

Read the rest (the comments are good, too).

Hum a few bars

Tags:

In today's Ithaca Journal:

ALBANY -- With an April 1 budget deadline looming, legislative leaders said Thursday they were working toward reaching a deal Friday in hopes of passing an on-time spending plan...

Well, punctuality is a good thing—it would certainly be different. But is the budget going to do anything to lower the approximately $15K in state government debt each NYS citizen (that amount is higher per taxpayer, of course) is now responsible for?

And

The Congressional Budget Office (CBO) has completed its initial review of President Barack Obama’s budget request and found that the White House significantly understated the cost of red ink in its budget.

While President Obama claimed his budget would produce $7.2 trillion in deficits (a staggering figure) over the next decade, CBO calculated $9.5 trillion in deficits. That is more debt than the federal government accumulated from 1789–2010 combined. Overall, CBO estimates that the national debt held by the public—40 percent of GDP before the recession—would soar past 87 percent of GDP in a decade....

The President's budget request would add $80K per household to the existing $46K in federal debt already being borne by each US citizen ($128K per taxpayer). 

Do we still have decades to "slow-roll" the necessary changes in our spending habits? From Monty, at Ace:

[....] There are too few people who understand the gravity of the problem, and too many people who depend on a government check. The only real solution would require a combination of deep cuts to entitlement programs, a vast downsizing of our federal and state governments (and thus their spending), and a dedicated years-long effort to pay off our debt. But these solutions are waved off as "politically unfeasible", which is tantamount to simply admitting that the problem cannot be solved at all.

I've often said that circumstances will impose a solution on us if we don't find one ourselves -- we simply cannot continue as we are. And the reckoning is not comfortably far off in the future; it's unfolding right now, before our very eyes.

OK, now think Nat King Cole.  Got it?  Go:

Unsustainable, that's what we are
Unsustainable though near or far
Like a fog of doom that clings to me
How the thought of debt does things to me
Never before has an economy been more
Unsustainable

"What a State Bond Default Looked Like When It Last Happened, In 1933"

Pay attention, Albany.  From Ace:

In 1933, nobody thought Washington should get involved in a state bond default. In 2010, that’s the first place we would look for help.

So back then, it was a surprise that the federal government should do this; now it's just expected.

So what incentive do states have to make tough cuts? None, it seems.

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