Tag Archives: National Debt

The Fiscal Cliff Aversion, Avoidance and New Arrears Act of 2013

Late at night on New Year Day of 2013, the House voted after much last minute handwringing to accept the Senate compromise bill to avoid the Fiscal Cliff.

Reality is that the cliff has not been averted, just the rough edges of it.

Along the way many bargaining chips were wasted to get very little.

On December 31st the national credit card hit its limit. Treasury Secretary Geithner says that he can move some things around to pay the bills through sometime in February. Our new Fiscal Cliff Avoidance Bill of January 1st 2013 now adds almost $400 billion per year in new national debt per the CBO’s analysis.

LAW OF UNINTENDED CONSEQUENCES

The Republicans now own Obama in the next round of negotiations over increasing the debt limit. That crisis hits within six weeks. As the Washington Post put it: “The bill avoids austerity but doesn’t tame dangers of national default, high unemployment or swelling debt.”

There is little to rejoice about in the Senate bill, now approved by the House, because it is fiscally irresponsible. It will cause much of the good that it has supposedly created to collapse in upon itself … not within years but within months.

The GOP itself has major issues and #1 among them is that its has allowed itself to be held hostage by the Tea Party mentality of talk a tough game without having any specifics. It has also allowed ideologues like Grover Norquist and the disciples of Arthur Laffer to warp the ability of the GOP to think in terms negotiating for the greater good of the country rather than the GOP just following unproven maxims that always seem to increase the debt rather than resolve it.

Back in the good ol’days of RINOs ruling the GOP, our national debt was relatively low and social policy moved forward in some sense of balance because people went to the negotiating table with the intent of getting a balanced deal of trading off benefits and finding bill payers, and cutting debt where possible — and we often did cut a lot of debt.

Back during the good ol’days of the 1950s/60s/70s/80s Dems and Reps were able to work together on many things that kept debt low or paid down the debt while accommodating social concerns.

However, what the GOP has going for it now is that it owns the House vote at the precise moment that President Obama will need agreement on a host of issues for which he does not have many bargaining chips to put on the table.

We will see the stock market’s view of this deal play out over the next week. Whether you love or hate Wall Street, the stock market is considered a fairly reliable indicator of which way the economy is going.

$400 billion of new debt per year has just got to scare investors worried that the nation’s #1 purchaser of services, goods and materials may not be able to pay its bills either on time or in some cases be able to pay them at all — forcing renegotiation.

We also have the FY2013 federal budget to complete. Our new federal year started in October and we still have no approved federal budgets. Those too must now be negotiated with many in the new Congress of a mind to to pare back spending to offset this Fiscal Cliff deal.

In our aversion to negotiating in good faith (both parties) we have avoided the Fiscal Cliff from arriving on January 1st, 2013. But in doing so we have merely bought breathing space of just 1-3 months before we must return to the negotiating table for what are perhaps even larger stakes.

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Fiscal Cliff Negotiations – Why Obama and Boehner Won’t Agree Anytime Soon – Maybe Not At All

ABOUT that Fiscal Cliff — The Daily Beast has summed up nicely the chances of a deal:

“There is a growing sense among Republican policy wonks and senior lobbyists that the chances of getting any kind of meaningful deal on the deficit between now and the end of the year are drifting toward zero.” Daily Beast, Dec 4th.

Speaker Boehner held a press conference on Friday, December 7th, to discuss where negotiations are currently going, which you can watch below.

The real takeaway from this press conference is not that negotiations are going badly — although that is what the video portrays — but that there is little that can be put on the table to actually negotiate with.

At this point, Speaker Boehner is facing a challenge within the GOP to oust him for even talking seriously about some of the ideas on the table. Earlier this week he received a letter signed by more than 100 conservative activists that threatened to work against him and any other GOP member that supported any attempt to raise taxes and/or to curb tax deductions and such. Boehner is damned if he does and damned if he doesn’t.

American Majority Action (AMA) launched a #FireBoehner campaign, and numerous other conservative and Tea Party groups have joined the effort to toss Boehner as House Speaker. For that to work requires that just 16 members of the Republican Party drop support for Boehner in January which will take away enough votes to prevent his return as the House Speaker, opening the way for a new Speaker.

So as you watch the press conference video above, please ignore Speaker Boehner blasting the president. The two of them could probably reach a deal quickly if left to work things out together. Boehner is just echoing talking points at this point as he tries to work out some deal acceptable to his own party.

There is also criticism that Obama is not responding seriously to Boehner’s proposals. This is undoubtedly true but also just rhetoric. There is no GOP plan with specifics or any plan that can get enough GOP votes to pass even if we were to adopt the Boehner’s GOP plan ‘as is’. So reality is that President Obama is really left to negotiate with himself because any deal made at the moment is not a viable deal at all.

Things don’t get negotiated from the center. If I were Obama, I would ignore any ‘plan’ that didn’t have specifics and a guarantee of X votes to go with that plan. Speaker Boehner really needs to negotiate the Fiscal Cliff within his own party before he can expect the president to make a deal that the GOP won’t honor.

Speaker Boehner is an honorable man. Life must seem crazy for him at the moment. I wish him well and hope that he can strike a deal which really does cut national expenses and find ways to pay for whatever else remains as obligated debt. The Constitution gives that challenge to the Congress not to the president — so before we make any progress it is the Congress that has to come to terms first, and Republicans pretty much own the House which is where it all starts.

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Fiscal Cliff Alert Status for 2012.12.05: Condition Red

When it comes to the Fiscal Cliff, we all have much to lose.

The CBO projects that going over the cliff means that the economy takes a nosedive during 2Q 2013 and unemployment will easily break 9% by early 3Q 2013.

Should we go down the Fiscal Cliff path then 2013 will be a year of random misery as different parts of the economy adjust to magical movement of money, or lack thereof, in the marketplace. Ours is a marketplace addicted to subsidized money on both the left and the right, whether it be cheap credit cards, zero percent loans to large banks, defense spending or social spending, grants, shared underwriting of public programs or tax credits and deductibles for private investments.

Neither side is close to blinking. Neither side is close to have a ‘deal’ that their own party can support.

Negotiation on avoiding the Fiscal Cliff will go all the way to the 11th hour … and perhaps no deal will come about. More probable than just being possible at the moment.

President Obama has a strong hand for shooting down many aspects of what the GOP wants, although the GOP does not have any actual plan that is supported both within the House and the Senate as of yet. So criticism that Obama has rejected the GOP plan are largely empty words — there is no GOP plan that the GOP itself has endorsed that can provide a guaranteed 51%+ supportive vote in either the House or in the Senate.

And yet President Obama’s challenge is that he needs a deal that the GOP House will approve, and so far there is no real Democratic plan on the table that can provide a guaranteed 51%+ supportive vote in either the House or in the Senate.

The only two people that have a written plan are Simpson-and-Bowles … and neither the Dems nor the Reps are embracing it.

Today’s Risk Level of going over the edge: Condition Red

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Bogus Claim – Bush wiped out the Clinton $5.6 trillion surplus in just two years

The graphic below is making many rounds on the internet, and its publication is specifically widespread on Facebook.

Problem: The primary claim is grossly incorrect — so incorrect that the claim qualifies as a BIG Lie.

Bush wiped out Clinton surplus - BOGUS

Grossly inaccurate/BIG Lie category: Clinton left a $5.6 trillion surplus? Really? Per the Clinton administration’s own numbers, the surplus never exceeded $400 billion, and was just $237 billion in its best year (2000).

Good things were done to manage debt during President Clinton’s last few years: there was significant progress in paying down national debt in 1999 and 2000. The National Debt Clock had stopped and was even reversing.

Also good was that new debt under President Clinton’s eight years was minorly incremental as compared to almost all other presidents since World War II. Yet national debt within President Clinton’s last year in office began to rise again — all the gains of debt paydown in 2000 were wiped out by 2001’s gains.

As for debt hitting $10 trillion on Bush’s watch: $10,628,881,485,510.23 was the debt on President Bush’s last day in office. It was $5.727 trillion on the day he took office.

Note: It is easy to check such numbers. The Department of the Treasury has a website that let’s you check the national debt (technically ‘Public Debt’) at any time. You can check the numbers yourself at Debt to the Penny.

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A BIG Lie found floating around the internet – National Debt from George Washington to Barack Obama

Disclaimer: Was not an Obama voter in 2008 and don’t expect to be an Obama voter in 2012. Stretching the truth is occasionally OK but I strongly dislike BIG lies. I’m on the side of the red, white and blue. BIG LIES only destroy us all as Americans.


The following graphic was busy floating around the internet during late December 2011.

National Debt over time from George Washington to President Obama

Alleged National Debt from George Washington to Barack Obama

I hate to be Mr. Grinch Fact Checker but this chart is VERY wrong.

This chart is not even close to being just misleading. This chart is so wrong that it wins my award of The BIG Lie.

The actual national debt in January 2009 when President Obama took office was $11,909,829,003,511.75 (Jan 30, 2009) per the U.S. Treasury.

This chart is also wrong on several other levels.

For this chart to be accurate, actual national debt over time should be expressed as a cumulative. These numbers do not even begin to show total cumulative national debt.

For example, the total cumulative national debt racked up just under President George W. Bush (Jan 2001-Jan 2009) was $6.1 trillion dollars. Keeping that number in mind, according to this chart all presidents before George W. Bush created a total national debt of just $200 billion. This chart is obviously nowhere near reality.

Note: For comparison, after eight years of President Clinton debt increased $1.5 trillion vs $6.1 trillion under eight years of President Bush.

What this chart really portrays is that reality doesn’t matter … and as for fact checking: that’s for losers. It is all about winning. Politics is a contact sport don’t you know?!

Source for all numbers: U.S. Treasury http://tinyurl.com/3xjc7y — the Treasury provides a history of all national debt numbers so don’t trust me – go do a fact check yourself.

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Ronald Reagan and dodgy quotes

Each day a variety of Quotes of the Day arrive in my emailbox.

Am not so sure that much thought is given to some of these quotes. Or perhaps what seemed like a great quote once upon a time has now become tarnished with written history.

Today’s Quote of the Day:

To those who say we can’t cut spending, lower taxes and, yes, rebuild the defenses we need in this dangerous world, I have a six-word answer: “Yes we can, and yes we must.”

— Ronald Reagan, June 25th, 1981

No, no he didn’t and no we didn’t.

Yes, we did rebuild our defenses. Yes, ‘lower taxes’ happened. However it is most unfortunate that the ‘cut spending’  part never came about.

Yes, we cut social spending. And it was the Reagan Administration that proposed declaring ketchup a vegetable in school lunches long before the Obama Administration tried to declare pizza a vegetable — personally I think pizza as a vegetable is my kind of vegetable.

Defense spending of the 1980s knew no limits. And we did nothing to pay for it. By 1984 and early 1985 so many Republicans were alarmed that they tried to box Reagan in on the 1985 and 1986 budgets. Instead they bought the promise of trust me, it will all work out. (Reagan later said that he regretted all the red ink in his authorized biography by Lou Cannon).

The theory was that if we cut taxes and the economy grew then magic would happen: so much money would come in via taxes on the new economic growth that balance would be achieved. George H. Bush called this voodoo economics back in 1980 when campaigning against Reagan.  Yet, Bush, when faced with his own balancing act, chose to raise taxes — and paid for it because in a moment of insanity had declared ‘Read my lips: no new taxes’ which he was punished for.

Anway, the grand Reagan/Laffer curve didn’t work out as predicted and Reagan gave us the basis for our national debt today, leaving office with $2.7 trillion in red ink — even though he blasted Carter for leaving us barely $300 billion in debt, which Reagan claimed he will pay off completely by 1983. Oh, well.

It was not my intent to get off on a tangent about Reagan. I like Reagan. I was a 1980 Reagan campaign staffer and he will always be Saint Ronnie to me. I love the Gipper. It is just that Reagan was human and whomever is editor of these Quotes of the Day should either read them before posting or … anyway, oh, well. Whatever.


BTW – Many conservatives hate Reagan’s biography. Seems that having warts and being human is not what we want to know about Reagan. Reagan himself, and his wife Nancy Reagan, however seem to have had no problem with the biography. One of Reagan’s strengths was pragmatism and being a realist about most things.

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Bow Wow — Just on principle let’s pass the buck, bankrupt the government and blame the other guy. A plan!

I am all for making cuts.

I am all for a constitutional amendment to balance the budget — but only because Congress is more often than not a bunch of gutless wonders that vote the party line and don’t have the cojones to really perform their constitutional duty.

Seldom do I criticize Democrats, other than to point out that they don’t really have a plan about anything. Why criticize folks that prove Will Rogers right almost daily: “Democrats never agree on anything, that’s why they’re Democrats. If they agreed with each other, they would be Republicans.”

However, it is the Republicans that are in disarray at the moment — and it is because raising the debt ceiling is a backwards argument.

They are making their arguments largely based upon principle. To hear them, you might think that they are saving the country by trying to block any increase in the debt ceiling and to avoid anything which takes a penny of their tax money.

They are trying to starve the beast one last time. They are trying to do it on principle. But which one?

Congress and very specifically the House of Representatives has the ability to make cuts by directly cutting specific programs.

Raising the Debt Ceiling only pays for what Congress has already approved. The money cannot be used for new stuff.

THE BEAST & THE PROBLEM

The problem is that Republicans do not want to step forward and to specifically cut Social Security, Medicare, et cetera. They do not want their fingerprints all over the crime scene, which is certainly how the American public would see it once the law of unintended consequences kicked in … which should take no more than 30 days after cuts are made.

On principle, the Republicans and the Tea Partyers want to pass the buck: we will save you and the future but only if you hold this gun to your foot and pull the trigger by yourself.

They want to force a bankruptcy and then tell the president: Hey, bud, you are running short of cash. YOU need to make cuts to programs that WE approved expenses for — whether it was this Congress or prior congresses.

On principle and as an option, we are willing to let you make these painful cuts right before a major presidential election by only agreeing to give you enough money to allow you to run out of money just about primary time — assuming that we can even come to some agreement as to how many hoops we want you to jump through so that we can rant at you for 6-8 months before November 2012.

Bottomline: I didn’t vote for President Obama. Am still not crazy about him now. He probably will not get my vote in 2012. But here is what I do know: President Obama should tell the Republicans to go to hell!

If the Republicans want to sit down and to make specific cuts then Congress should take a vote on the programs that they want to cut. The 2012 budget is in their hands. They could block a debt ceiling increase easily if THEY slashed Social Security, Medicare, Food Stamps, and maybe a few tanks, planes and drones.

What say ye Congress, and specifically Republicans? How about really acting on your principles?

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