There is a fascinating new poll out about the debt ceiling that Washington politicians should pay attention to.
Just 27 percent of Americans support raising the debt limit, while 63 percent oppose raising it.
Eighty-three percent of Republicans oppose raising the limit, along with 64 percent of independents and 48 percent of Democrats. Support for raising the debt limit is just 36 percent among Democrats, and only 14 percent among Republicans.
Seven in ten who oppose raising the debt limit stand by that position even if it means that interest rates will go up.
But along the way, Brian Montopoli, the reporter, gets something amazingly wrong — so amazing he either does not know what he is talking about or he is lying. In the write up of the poll, Montopoli writes, “If the debt limit is not raised, the United States will default on its bonds for the first time in history.”
That simply is not true. In fact it is only true if Barack Obama instructs Tim Geithner to default.
In fact, back in January Pat Toomey pointed out that
The debt service, interest on our debt is about 6 percent of everything the federal government has to pay. So, we would be taking in enough revenue to cover more than 10 times all the interest that we owe. There is no reason we would have to default on our interest obligations.
We will not default on our debt. To say otherwise is a lie or monumental case of bad and lazy reporting.
Aaron Gardner
Moe Lane
Steve Maley
KnightsofMalta
Dan Spencer
Dan McLaughlin
Interest rates....
Papabile Friday, April 22nd at 11:20AM EST (link)The 10 times the amount of revenue figure means nothing, when one realizes that for every single point thee interest rate goes up, so does our debt service, to the tune of $140 billion a year.
Hence, if and when rates go up by about 2% this year, our interest payments on the debt will spike by about $280 billion a year.
The markets will spike rates on the 30 year bonds, along with the 10 year bonds if we do not raise the limit.
That will wipe out the 10x the amount of revenue…..
Of course, that 10x the amount of revenue is already obligated, primarily through mandatory, NOT discretionary, spending.
your right there's another alternative to default
kfwmcc Friday, April 22nd at 11:26AM EST (link)The alternative is to indiscriminately stop paying full troop benefits, close federal courts, stop inspecting meat, cancel medicare payments, etc, with drastic consequences.
It took 10 years to get us in this mess, and it is not realistically possible get around raising the debt ceiling. It is childish to hold the country hostage over this. Using it as for leverage in order to lower taxes, which will clearly worsen the debt problem, is beyond irresponsible.
Or you could stop the welfare payments and keep
The_Gadfly (Diary) Friday, April 22nd at 12:05PM EST (link)paying the troops, law enforcement, meat and other food safety inspectors, etc., including medicare and medicaid payments for the indigent. In other words, work seriously on the spending plan instead of smoke and mirrors to pretend you are doing what the American people want done.
Your threats are childish as well
YnotNOW (Diary) Friday, April 22nd at 12:55PM EST (link)YnotNOW
If not me, who? If not now, when?
Your threats are childish as well
YnotNOW (Diary) Friday, April 22nd at 12:55PM EST (link)YnotNOW
If not me, who? If not now, when?
I really hope we don't play games with this
Death_of_the_Donkey (Diary) Friday, April 22nd at 11:40AM EST (link)The repercussions are far worse than most Americans have any way of understanding. It isn’t just the interest rate spike that will happen (and be much worse than what people are probably thinking on these polls), it is the destruction of the dollar at a far greater scale than has happened so far (which will bring about further increases in commodity prices), it is the massive economic hit we will take (right back into severe recession) when all those stopped payments (ie to seniors/defense contractors et al) percolate through the economy coupled with those previously cited commodity spikes. And the worst part is, even if we then say “ok, our bad” and raise the ceiling, the dollar buying/bond buying community will have lost faith in us and the effects will simply not just disappear. Gaming the debt ceiling is not something that is in the best interests of any non-elected American.
quicksand
Common_Cents (Diary) Friday, April 22nd at 11:57AM EST (link)The situation is like stepping into quicksand. If you don’t move you are slowly sinking, if you move you might sink a bit faster but it is the only way to get out.
Same with boiling a frog slowly. Same with Midas, pay us now, or pay us later. Same with starving a cold, and DC is a full on flu.
Continuing to upping the credit card limit for a spendaholic enables the behavior and does nothing.
Where is the corresponding plan to get us out of this mess? We’ll get lip service as we have for decades and end up with nothing. Politicians only let things fall into crisis before they take any action so they have political cover.
TARP was sold this way too. We must do it or else? Well, it’s time to have an adult conversation about the exploring the “else” part. TARP signaled a horrible blow for America, allowing the taxpayer to be ripped off of 700Billion bailing out losses of big banks for starters, leading to hundreds of billions more in various bailouts. We would have been much better off letting weak hands fail and let strong hands step in.
There is NO rational adult conversation going on about doing what it takes to keep current debt ceiling in place, nothing, nada. We only get fear mongering and that should raise a red flag to America about the establishment elites in DC, both D and R.
Obama=Golfer in Chief, Leading from,
behind, the Back Nine.Leaders don’t create movements. Movements create leaders. Get involved. Your future depends on it.
Govt “invests” YOUR tax money for POLITICAL return rather than economic return.
Quicksand analogy is correct
YnotNOW (Diary) Friday, April 22nd at 1:02PM EST (link)In that, if we let things stay as they are (in terms of deficit spending), you will continue to sink without hope of improvement (in terms of Debt). And while taking action may be scary and dangerous, the CORRECT sort of action (reducing spending) is the only hope of survival.
Those who try to avoid using the debt ceiling as “leverage” (i.e. a warning sign that we are sinking deeper and deeper) are refusing to recognize the impending sinking in quicksand.
YnotNOW
If not me, who? If not now, when?
Quicksand analogy is correct
YnotNOW (Diary) Friday, April 22nd at 1:02PM EST (link)In that, if we let things stay as they are (in terms of deficit spending), you will continue to sink without hope of improvement (in terms of Debt). And while taking action may be scary and dangerous, the CORRECT sort of action (reducing spending) is the only hope of survival.
Those who try to avoid using the debt ceiling as “leverage” (i.e. a warning sign that we are sinking deeper and deeper) are refusing to recognize the impending sinking in quicksand.
YnotNOW
If not me, who? If not now, when?
You are wrong on Tarp
Death_of_the_Donkey (Diary) Friday, April 22nd at 1:05PM EST (link)There were no strong hands at the time. Had we just let the system lock down (which is what was happening), our economy (and likely most of the world’s) would have collapsed worse than what we saw during the depression. And since the government (through FDIC) is on the hook for bank failures as it is, the cost would have likely been far greater than the $700 billion (most of which has already been paid back).
We already essentially agreed to raise the debt ceiling by passing the budget last week and at the very least should raise it by the amount needed to get us to the start of the next budget. It is quite disingenuous to pass a budget one week and then vote against paying for the same budget the next.
No, YOU are wrong on TARP
congressworksforus (Diary) Friday, April 22nd at 5:21PM EST (link)TARP was a scam.
While you correctly identify that we were incredibly close to complete meltdown, you conveniently forget 2 things:
1. The first TARP vote failed.
2. When it DID pass, it took weeks before they spent any money because they couldn’t agree what to spend it on, and Paulson effectively deferred to Obama’s incoming team.
The ONLY thing that was required with TARP was Bush and Paulson asking Congress for the money.
Despite what gazillions of Krugman-like experts claim, the massive (at the time; $700b seems so.. trivial… now) request was necessary for one and ONLY ONE reason:
It was to stop a run* on a U.S. banking institution.
It was a MESSAGE to speculators (e.g., Spooky Dude) that unlike the rest of the world, the US was NOT going to permit that to happen here, and that they would back-stop the system as much as needed.
* Various forces, like Soros, have speculated on the possibility of this happening in the past, but always believed the institutions here were just too large f.or it to be successful. Remember, it would require orders of magnitude more money to do this on a U.S. bank than, say, Northern Rock in the U.K.
However, the Bush administration’s decision to let Bear Sterns and Lehmann Bros fail opened the door to it actually happening. People in the capital markets will tell you there was a huge amount of money withdrawn from U.S. markets in a matter of hours that it was in danger if triggering a run. Someone had figured out that if the US was going to let banks fail after all, they could accomplish not only a run on one bank, but possibly several.
But $700b is a lot of money, and whoever was behind the move clearly didn’t have the ability to match what the U.S. govt decided it was going to throw on the table.
One might argue that Bush & Paulson went “all in” and their opponent folded.
So, “let me be clear,” yes, we were facing a precipice, and yes, the request to Congress was necessary, but passing the actual bill (when it finally happened) wasn’t, and probably never was.
Remember, if the left wins, abortion will not only be legal, it will be mandatory.
total bank deposits
Common_Cents (Diary) Friday, April 22nd at 11:23PM EST (link)around then were approx $5-$7 trillion? Wha’ts a trillion or two these days anyway!
TARP of 700B was just the beginning. Add up all the additional acronym scam bailouts TALF, SCHMALF and various guarantees and you easily are in the trillions. This is the stuff we know about. Who knows what other shenanigans are out there.
They could have just announced they were backstopping bank deposits, you know, protect the prudent people and institutions who actually had savings and real capital, and let the wall street leveraged crap hit the fan to punish the weak. There would have been plenty of strong hands to step in. Buffet came in with $5 billion to GS. Plenty of regional banks could have picked up the slack.
Yeah it would have been painful but not heading towards the point of no return as we are now.
Instead you have big banks, wall st converting to bank holding companies (Goldman Sachs + others) flush with taxpayer money speculating on all kinds of assets driving up prices and hurting Americans. The sneaky 100% taxpayer funded AIG scam making Goldman Sachs and other 100% whole on their failure of risk management and due diligence, not taking a haircut of a dime.
NONE of that bailout money has trickled down in the form of credit to businesses that needed it and still largely to this day, no credit for businesses. It is a big boy wall street/DC elite scam recycling taxpayer money for treasuries, borrowing and spending.
Small and medium businesses, the lifeblood of America, are surviving on cutbacks to the bone, burning their remaining capital, and resorting to factoring/invoice financing to stay alive.
Obama=Golfer in Chief, Leading from,
behind, the Back Nine.Leaders don’t create movements. Movements create leaders. Get involved. Your future depends on it.
Govt “invests” YOUR tax money for POLITICAL return rather than economic return.
so much to paulson and geithner's pals and foreign banks - LINK
Mike gamecock DeVine (Diary) Friday, April 22nd at 11:44PM EST (link)http://www.cnbc.com/id/42193298
http://www.bloomberg.com/news/2011-04-01/foreign-banks-tapped-fed-s-lifeline-most-as-bernanke-kept-borrowers-secret.html
Mike DeVine’s Examiner.com, Charlotte Observer and The Minority Report columns
“One man with courage makes a majority.” – Andrew Jackson
The Bernank is in a box
Common_Cents (Diary) Saturday, April 23rd at 12:27AM EST (link)Not much different than Madoff starting out legit, then losing money, took a bite of the apple temporarily until things turned around, but they didn’t, and Madoff got sucked into the quicksand, gaming the system.
Bernank jawboning about the 500 lb inflation gorilla in the room from the debasement of the dollar. Meanwhile favoritism by the big money leaches scraping off their cut on the backs of taxpayers.
Nothing being done to restart the economic machine of small/med size businesses that do the real hiring and economic growth, meanwhile the opportunistic big money elites are making a run on taxpayer money.
Get ready for the come to Jesus moment. The longer we wait the more we’ll need him.
Obama=Golfer in Chief, Leading from,
behind, the Back Nine.Leaders don’t create movements. Movements create leaders. Get involved. Your future depends on it.
Govt “invests” YOUR tax money for POLITICAL return rather than economic return.
exactly, although given that Bernanke was one of Greenspan's co-conspirators
Mike gamecock DeVine (Diary) Saturday, April 23rd at 11:12AM EST (link)in keeping int rates low in the early-mid 2000s and so helped fuel the housing bubble and resultant great recession and continuing jobs recession, I would say that Ben helped build the box he is in. The dems built most of the rest of the box. Some repubs hammered nails in the box.
Mike DeVine’s Examiner.com, Charlotte Observer and The Minority Report columns
“One man with courage makes a majority.” – Andrew Jackson
Paid back by who?
Common_Cents (Diary) Friday, April 22nd at 11:33PM EST (link)Paid back by taxpayer money loaned out through the fed window for next to nothing to big speculators goosing up prices of many assets for their own gain. Recycling that money in treasuries adding to our debt while DC continues to spend like a shopaholic. Suppressing interest rates stealing returns from real prudent savers while driving inflation of real goods. A double whammy.
In the end not much different from Long Term Credit fiasco. The “smartest” most “educated” geniuses with a secret black box generating big returns when all they were doing was apply 60-120X leverage. We all know what happened next. Only now, the names have been changed and they are now playing at higher stakes with taxpayer money, skimming off their personal vig for their own pockets.
Obama=Golfer in Chief, Leading from,
behind, the Back Nine.Leaders don’t create movements. Movements create leaders. Get involved. Your future depends on it.
Govt “invests” YOUR tax money for POLITICAL return rather than economic return.
Those of us who poll that way aren't playing games.
The_Gadfly (Diary) Friday, April 22nd at 12:11PM EST (link)We’re deadly serious about it. You present the false choice that there is no collapse if we just raise the debt ceiling. The S&P report was more about the lack of a real budget compromise than the coming debt ceiling issue. Raise the debt ceiling or not, the debt rating goes down if we don’t balance the budget. Those of us who are deadly serious know we can fight this now and maybe die a catastrophic death, or die the thousand deaths of the coward who will not stand.
I agree that we need to get the budget
Death_of_the_Donkey (Diary) Friday, April 22nd at 1:08PM EST (link)under control, however, risking immediate economic collapse to do so isn’t a very rational idea. We can have the budget fight between now and the 2012 elections and hopefully get something worked out that over the long run will balance the budget and instill confidence in our debt. Balking on the debt ceiling now because one day we might slowly lose our bond rating is like cutting of my foot now because that scratch I just got might one day turn gangrenous.
Insufficent analogy
YnotNOW (Diary) Friday, April 22nd at 1:14PM EST (link)The current situation is more like, cutting off your foot, because there is a huge gash in your arch that you’ve been ignoring for a week, it’s become infected, and yet you don’t want to go to the hospital to have IV antibiotics, wound debriedment, and stiches.
Ignoring the “scratch” is not an option, because if you wait, the foot WILL have to be amputated. And ignoring the amputation will kill you outright.
That’s how serious our deficit situation has become.
YnotNOW
If not me, who? If not now, when?
I disagree (to both your responses)
Death_of_the_Donkey (Diary) Friday, April 22nd at 1:22PM EST (link)The debt wound is not yet past the point of no return and is still fixable through the normal budgetary process. Just because we don’t agree with what a potential compromise may entail does not mean we should throw the country/economy under the bus just to get 100% of what we want.
I have a real bad feeling that we could completely blow our chances in 2012 with an ill-conceived fight over the debt ceiling, when we should be fighting over the budget and reforms themselves.
Debt ceiling misunderstood
Tavern Keeper (Diary) Friday, April 22nd at 1:26PM EST (link)I don’t think the vast majority of Americans have a good understanding of just what the debt ceiling is. To fight this fight we have to first define the issue, and honestly doing that might get us into more trouble than its worth.
I’m not saying not to address the issue, but we’ve got to pick our battles, and make sure that we do no harm that prevents us from reaching our ultimate goal – restraining the federal government.
The Tavern Keeper
@LTtavernkeeper.com
Good points, TK
randy streu (Diary) Friday, April 22nd at 1:33PM EST (link)And sorely lacking in GOP dialogue in general. Republican politicians have been singularly … bad … at properly framing the issues — or indeed, framing them at all, and it would behoove all of us, I think, if they stopped letting the Administration do all the talking on them.
We are letting all the wrong people guide the narrative when it comes to budget talks.
Blogging also at
SLC Republitarian
The Minority Report
We might not be to the point of no return yet...
YnotNOW (Diary) Friday, April 22nd at 2:11PM EST (link)But the debt wound is extremely serious, not a “scratch”. And fixing it will require major surgery, not a band-aid. This may be “the normal budgetary process” but it is not chipping away at the edges. It requires major reform of entitlements, major re-thinking of what our government should be doing in discretionary spending, and even a review of our national defense needs.
I agree with you that the debt ceiling needs to be raised, but to do this without forcing the government to face the severity of the issue is a mistake. The “point of no return” might not be that far off, as recognized by the S&P debt outlook.
YnotNOW
If not me, who? If not now, when?
We might not be to the point of no return yet...
YnotNOW (Diary) Friday, April 22nd at 2:11PM EST (link)But the debt wound is extremely serious, not a “scratch”. And fixing it will require major surgery, not a band-aid. This may be “the normal budgetary process” but it is not chipping away at the edges. It requires major reform of entitlements, major re-thinking of what our government should be doing in discretionary spending, and even a review of our national defense needs.
I agree with you that the debt ceiling needs to be raised, but to do this without forcing the government to face the severity of the issue is a mistake. The “point of no return” might not be that far off, as recognized by the S&P debt outlook.
YnotNOW
If not me, who? If not now, when?
No were not beyond the point of no return, the fingernails
The_Gadfly (Diary) Monday, April 25th at 5:55AM EST (link)still have firm purchase on the cliff. That doesn’t mean we should throw more gravel at them.
Insufficent analogy
YnotNOW (Diary) Friday, April 22nd at 1:14PM EST (link)The current situation is more like, cutting off your foot, because there is a huge gash in your arch that you’ve been ignoring for a week, it’s become infected, and yet you don’t want to go to the hospital to have IV antibiotics, wound debriedment, and stiches.
Ignoring the “scratch” is not an option, because if you wait, the foot WILL have to be amputated. And ignoring the amputation will kill you outright.
That’s how serious our deficit situation has become.
YnotNOW
If not me, who? If not now, when?
You are missing a piece of the puzzle.
Common_Cents (Diary) Saturday, April 23rd at 12:13AM EST (link)There is nothing being done to create conditions for a real recovery. In fact, it is being made worse. Time doesn’t help a bit if you are doing the wrong things.
Obama=Golfer in Chief, Leading from,
behind, the Back Nine.Leaders don’t create movements. Movements create leaders. Get involved. Your future depends on it.
Govt “invests” YOUR tax money for POLITICAL return rather than economic return.
Sadly, Brian Montopoli is not the only reporter lying about this.
The_Gadfly (Diary) Friday, April 22nd at 12:01PM EST (link)practically every report I’ve seen including the ones on Fox, make this out to be a case of if the debt ceiling isn’t raise the US will default on its loans.
Three Prior Incidences of This Have Occurred.
Repair_Man_Jack (Diary) Friday, April 22nd at 12:12PM EST (link)Conn Carrol describes prior instances of a failure to raise the debt ceiling.
Read more at the Washington Examiner: http://washingtonexaminer.com/opinion/columnists/2011/04/apocalypse-later-what-happens-day-after-we-hit-debt-ceiling#ixzz1KGjpa3Cy
” I side impenitently with the human race against the modern reformer.” – C.S. Lewis
Irrelevant
Papabile Friday, April 22nd at 1:00PM EST (link)As I explained before….
Mandatory programs, particularly Medicare drive spending.
(see: http://www.cms.gov/MedicareEnRpts/Downloads/HI08.pdf )
# of Medicare Recipients Year
30,589,468 1985
37,134,949 1995
40,066,786 2002
46,589,141 2010
(Note: 2010 is from Kaiser because CMS has not finalized 2010)
Combine this with the Social Security redemptions, Medicaid increases, and we are in a totally different position than we were just 9 years ago in 2002.
Within 10 years there will be 77 million retirees.
We have hit the fatal population bump which will drive everything.
Republicans predicted this back in 1996, but we were ignored, and demogogued, and that asshole Dole cut the deal wwhile we were still holding out on the House floor.
It has to be raised, no choice.
The above
Papabile Friday, April 22nd at 1:02PM EST (link)For some reasons the years did not come out on those numbers.
The numbers above were for the followwing years, in THIS order:
1985
1995
2002
2010
Again, I'm not as Pessimistic.
Repair_Man_Jack (Diary) Friday, April 22nd at 1:12PM EST (link)Year # on Medicare d(#onMedicare)/dt
1985 30.589 mil n/a
1995 37.134mil (37.134-30.589)/10 = 0.645 mil /year
2002 40.066mil (40.066-37.134)/7 = 0.413 mil/year
2010 46.589mil (46.589-40.066)/8 = 0.771mil/year
Ok, I see an increasing monotonic population of Medicare recipients. That could be bad. In and of itself, it is necessary but not sufficient to make a failure to raise the debt ceiling more problematic and risky each time.
What I don’t see, is the point at which I should feel it is too risky. The claim I derive from your post above is that somewhere between 2002 and 2010 a failure to raise the debt ceiling went from risky to suicidal. The questions that I would have to see answered are: at what point did that occur? and why should I feel that point is a valid demarcation?
” I side impenitently with the human race against the modern reformer.” – C.S. Lewis
Here are the big differences
Death_of_the_Donkey (Diary) Friday, April 22nd at 1:27PM EST (link)1) Revenues are currently way down (yes we do have a revenue problem). We are currently running at about 15% of GDP, when normally (and during those times) we run at 18-19% of GDP. If our revenues were still normal, we could probably fight this more, but with where they are now, there simply isn’t room to shift cash around and keep making all the payments we would need to to avoid a disaster (ie social security, medicare, defense, interest, etc). So to answer your question above, the risk turned to suicidal right about the time we entered this nasty recession.
2) Huge global focus on debt issues now (ie the PIIGS) that didn’t exist during those previous times, coupled with an explosion in unregulated CDS that can over lever debt. This increases the risk, as once the interest rates start to go up, it will be very hard to break out of the ensuing spiral (ie dollar falls more ->commodities soar->economy slips back to recession->revenues decline->more cuts needed to balance budget->back to number one).
Good Points Except For Two Things.
Repair_Man_Jack (Diary) Friday, April 22nd at 1:44PM EST (link)1) The recession, as measured in terms of GDP growth, ended in Q3 FY 2009. Unless you make the argument that any economic activity in the US right now is basically QEII. Once you make that argument, the next logical question becomes why?
2) Obviously, the best way to calm down everybody’s debt issues is to stop spending. If the reason that you can’t do that is that everyone can vote for the guy who promises you more free beer, than the way to solve that problem is to turn off the tap. That’s why the debt ceiling is the fulcrum to make everyone give up some of the goodies.
” I side impenitently with the human race against the modern reformer.” – C.S. Lewis
Response
Death_of_the_Donkey (Diary) Friday, April 22nd at 1:54PM EST (link)1) While the technical recession is definitely over, the effects from it are still lingering with the two biggest (and obviously related) being the lack of job growth and the very tepid revenues. We need revenues to be back at their historic norm (I only go back to 1980 for averages) of 18-19% of GDP.
2) The problem with using the debt ceiling in such a way is that the R’s alone don’t get to decide what goodies everyone has to give up and if they try to do so, we could face an economic disaster when the ceiling is breached and the full faith and credit of the US gets tested. Unlike a government shutdown (like a budget impasse), the effects of a debt crisis will not simply vanish once you get an agreement in place.
Which brings Us To The Point
Repair_Man_Jack (Diary) Friday, April 22nd at 2:00PM EST (link)Revenues will not go back to 1980 levels unless government share of GDP receeds back to those levels. Also, the current regulatory climate (see Boeing vs NLRB podcast) has to be changed.
And as for the R’s alone deciding, it isn’t that they are willfully preventing Dems from participating. It is that they have to drag the Dems by their necks to get them to even consider the question.
I remeber Democratic Senator Harry Reid saying as late as 2006 that the only entitlement crisis America faced was in the imagination of wealthy Republican Senators. If the Dems are not forced to address this issue almost at gunpoint, they will not. If the issue gets addressed ever, it will only because the GOP forced the fight.
” I side impenitently with the human race against the modern reformer.” – C.S. Lewis
I agree
Death_of_the_Donkey (Diary) Friday, April 22nd at 2:13PM EST (link)We have to force the fight (through the budget process though, not the debt ceiling), but we cannot then be unwilling to take a few blows once the fight starts.
As for revenues, they will go back up when job and income growth resume regardless of current spending (to a point). Remember that Reagan was running at 23.5% expenditures/GDP back in the mid 80s (which isn’t that far below now) and we still maintained revenues.
I Sincerely Hope You Are Right About Revenues
Repair_Man_Jack (Diary) Friday, April 22nd at 2:19PM EST (link)On that score I am pessimistic. There are so many fewer reasons to consider the US a good investment these days than there were in the mid 1980′s.
” I side impenitently with the human race against the modern reformer.” – C.S. Lewis
That is a separate argument
Death_of_the_Donkey (Diary) Friday, April 22nd at 2:33PM EST (link)and I agree with you, although I am not sure we really have a solution to the investment issue. The fact is that companies are going to invest in order to serve the global community and typically those investments are going to take place closer to their customers (especially with volatile fuel/transport costs and the instantaneous availability of information). We could eliminate corporate taxes entirely and I am still not sure that would bring a slew of jobs or investment back here at this point.
Review How We Regulate
Repair_Man_Jack (Diary) Friday, April 22nd at 2:36PM EST (link)It may be that we impose such a regulatory burden that it outstrips what anyone would gain from getting “Google-Taxed” rather than paying the current rates. I read that we impose an additional $1.75Tr regulatory expense on the private economy every year in the US. I don’t think we have have $1.75Tr in tax breaks to even hand out to offset that large of a dead hand of state.
” I side impenitently with the human race against the modern reformer.” – C.S. Lewis
Some regulation is good and necessary
Death_of_the_Donkey (Diary) Friday, April 22nd at 2:54PM EST (link)and in some areas (ie finance) more may be needed. What we need to do is figure out what regulations are not worth their compliance costs (in terms of added benefits to society) and get rid of those. We are never going to be able (nor should we want to) compete with China on regulations, but we do need to inventory all current regulations and then eliminate those that truly hinder business.
You Shoot, You Score!
Repair_Man_Jack (Diary) Friday, April 22nd at 2:57PM EST (link)One of the better Contract w/ America ideas that sadly got lost in the whole impeachment shuffle was a cost/benefit analysis of every regulation. As someone who liven in a state that got clobbered by the BP oil spill, I can’t help but wonder what we get in return for the regulatory apparatus if we just waiver people from the laws and then still have the very disasters we spend $1.75Tr to prevent.
” I side impenitently with the human race against the modern reformer.” – C.S. Lewis
Cass Sustein is the "Regulatory Czar" and he
happyhistorian Friday, April 22nd at 6:25PM EST (link)is creating more and more regulations in the differenct federal agencies to create federal control of things that can’t be gotten through the House and Senate. Therefore our 2 houses of Congress are irrevelant! Get it? Rule by regulations and Executive Orders???????
Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety. Ben Franklin, 1759
"when job and income resume"
Common_Cents (Diary) Friday, April 22nd at 3:18PM EST (link)I’m not picking on you but it brings up a point I hear all the time in the MSM. Nearly every talking head that talks about recovery and recessions lasting X amount of time, are always talking about time. Like time itself causes a rebound? It makes no sense. Like some magic happens over time with no proactive corrective action behind it.
This is why I am concerned about recovery as there is no proactive policy in providing an environment conducive for significant recovery. Even if correct policies were in place it does take time but time itself does nothing. This admin is pursuing policy that is hindering recovery, not helping. A double whammy.
Yet I hear that all the time from political/economic gurus on TV. “Ok, its been a year and a half, the recovery should be here any minute!”
Time does not heal. If you have a big gash on your leg, time itself is not going to be much help. If you lose your job you could sit around for the rest of your life and you won’t get another one.
I shall dedicate Pink Floyd “Time” to this subject. “Fritter and waste the hours in an off-hand way….waiting for someone or something to show you the way.”
Obama=Golfer in Chief, Leading from,
behind, the Back Nine.Leaders don’t create movements. Movements create leaders. Get involved. Your future depends on it.
Govt “invests” YOUR tax money for POLITICAL return rather than economic return.
In this case time is essential
Death_of_the_Donkey (Diary) Friday, April 22nd at 4:09PM EST (link)We didn’t have a normal cyclical recession, what we have recently experienced was a credit bubble (more akin to the great depression). In this case time is important because balance sheets (particularly family ones) take time to be repaired and credit has pulled back to more normal levels (ie unlike the bubble economy of 03-08). Government didn’t cause this recession (other than helping the banks go nuts with FSMA and CFMA that deregulated essentially everything) and thus government cannot “fix it”. Our obscene spending during economic booms over the past 30 years is now coming home to roost and thus not only can we not try to spend out way out of this recession, neither can we afford to cut taxes anymore either and thus we are left to wait and wallow in a slow motion recovery.
Why not have the RNC put the money up
jtlfromfredmd Friday, April 22nd at 12:29PM EST (link)and either place ads during prime tv viewing hours or, take the lead and get a smart, media-savvy spokesperson to explain this issue to the American people via a well produced infomercial. Or something like that. I’m not in the industry so I wouldn’t know the first thing about it but some body out there does. I hate to say it but we have got to start reaching the people who sit, in a trance, watching the boob tube. I’m trying to think outside of the box on this. One of these battles (CR, Debt Ceiling, Budget, etc.) has got to be taken to a new level. The old ways are not working.
CBS is lying, but poll respondents are ignoring as well
YnotNOW (Diary) Friday, April 22nd at 1:10PM EST (link)Several polls I have seen recently agree that large majorities do not support raising the debt ceiling, but at the same time they also reject any of the painful cuts that would be required to balance the budget. This willful avoidance of the problem cannot be continued – either one.
The debt ceiling will have to be raised. Maybe not this month, but soon. The budget will not be “balanced” this week. That’s just recognizing reality.
At the same time, major, significant cuts will have to be made in entitlements. Spending is not sustainable, and “easy” cuts (fraud & waste, physician payment schedules, comparative effectiveness studies, etc.) will not be enough. Obama’s proposals are not enough (even if his unrealistic assumptions come true). So deep and painful cuts must be made. That is just recognizing reality.
No more sticking our heads in the sand – reality must be faced.
YnotNOW
If not me, who? If not now, when?
CBS is lying, but poll respondents are ignoring as well
YnotNOW (Diary) Friday, April 22nd at 1:10PM EST (link)Several polls I have seen recently agree that large majorities do not support raising the debt ceiling, but at the same time they also reject any of the painful cuts that would be required to balance the budget. This willful avoidance of the problem cannot be continued – either one.
The debt ceiling will have to be raised. Maybe not this month, but soon. The budget will not be “balanced” this week. That’s just recognizing reality.
At the same time, major, significant cuts will have to be made in entitlements. Spending is not sustainable, and “easy” cuts (fraud & waste, physician payment schedules, comparative effectiveness studies, etc.) will not be enough. Obama’s proposals are not enough (even if his unrealistic assumptions come true). So deep and painful cuts must be made. That is just recognizing reality.
No more sticking our heads in the sand – reality must be faced.
YnotNOW
If not me, who? If not now, when?
THERE SHOULD BE NO DEBT CEILING INCREASE
happyhistorian Friday, April 22nd at 6:22PM EST (link)until the 2012 BUDGET HAS BEEN PASSED AND SIGNED BY THE PRESIDENT AND ALL APPROPRIATIONS BILLS HAVE BEEN PASSED AND SIGNED BY THE PRESIDENT FOR FY 2012. A 5 POUND BAG OF FLESH MUST BE GIVEN TO WE THE PEOPLE FROM THE ADMINISTRATION BEFORE ANYTHING GETS INCREASED!
Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety. Ben Franklin, 1759
?????
Papabile Friday, April 22nd at 11:26PM EST (link)What fantasy world are you living in?
The Budget that Congress passes is a Concurrent Resolution between the Houses, and the President has absolutely zero to do with it once it’s passed and reconciled. It has never once been signed by him because of its nature.
I sincerely doubt that we will have anything besides a Continuing Resolution for the rest of 2012.
If the House started kicking out bills in the approps process today, the Senate would have to be open to moving them. They aren’t.
Default is not the problem
Adjoran (Diary) Saturday, April 23rd at 4:07AM EST (link)We could most certainly meet our interest payments and not have any drastic cuts in government programs for at least 6-8 months after the debt ceiling is reached. The problem is the existing debt we also must roll over. Spook the bond market, and they will demand much higher interest – especially since the falling dollar has already eroded their investment.
As interest rates ratchet up, so does that part of the budget which must pay them. And once the interest rate genie is out of the bottle, it’s Katie-bar-the-door.
We won’t default. But we could shoot ourselves in the foot without getting anything accomplished. We should extract whatever concessions we can, and drag the process on a month or three if necessary to do it, but it the end we can’t be the ones responsible for interest rates suddenly spiking.