Moody's: Neither debt plan protects the nation's AAA rating - The Hill's On The Money
In scanning the headline of the major outlets online are all pointing toward talks on the debt ceiling getting "closer". It will be interesting to see what comes out of these talks. As the article says, Moody's is not really concerned about the raising of the debt ceiling nor do we really need to raise the debt ceiling to pay our debt. Actually, not raising the debt ceiling actually is a good thing for America and it's credit rating because the focus going forward will be to reduce the debt in order to pay for other programs involved in the budget. Many are blaming the Tea Party faction of the Republican party since they are unwilling to compromise. I wonder if this same conversation took place when President Lincoln drew the line in the sand on slavery! Sometimes standing your ground is in the best interest of the country and right now that is one of them. We cannot sustain the debt we have so how does it makes sense to raise the debt ceiling?
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"I wonder if this same conversation took place when President Lincoln drew the line in the sand on slavery!"
ReplyDeleteYou mean when Lincoln refused to compromise because a group of states attempted to secede from the Union and initiate a war because they didn't like the outcome of a political decision at the federal level?
Yeah, those are morally equivalent points aren't they?
Both parties signed the legislation that brought this bill due. Raising the debt ceiling is no different than households going into debt to cover their bills. The alternative is default on federal obligations whether they be to bond holders, SSA check recipients, military personnel's benefits or defense contracts.
At the end of the day, if you created the bills that are coming due, it's irresponsible to say you won't pay them and that is what is being advocated here.
But hey, if you don't see this as a problem, how about you go default on your mortgage to prove to your wife that you are in charge of the finances. That's what the Tea Party was advocating.
And it's absurd and irresponsible for our leadership to assert such a position. But then, I don't see the Tea Party as people capable of leadership.
Truman - all the things you listed above outside of contracts can be paid out of current revenue. The trouble is that we allow future budgets to increase automatically without making sure they need the money. Your mortgage example is funny. We need to stop the growth of government and the spending that has been out of control.
ReplyDeleteCurrent weekly tax revenues are <100B. Current Debt liabilities to service the debt are 43B alone. SSA liabilities are 81B. Military expenses are 14-18B per week depending on what source you use. Defense contracts can be deferred since most are paid in advance, not arrears. So just adding Debt service, SSA and Military you're at ~140B. And this doesn't even cover current government employees, etc.
ReplyDeleteHow exactly can it all be paid with current revenue again?
And, I'm all for shrinking government. In fact, I've advocated for responsible fiscal management for more than 10 years.
And the tea party deserves some credit for forcing a discussion that needed to happen. But when they go from a rational position of "we need to address the deficit" to an irrational one of "don't raise the ceiling, default" that's where I have issues.
Not to mention, where was the tea party when we passed 2 unfunded tax cuts through reconciliation? Where was the tea party when we passed a 1 trillion dollar medicare plan through reconciliation? Where was the tea party when we were spending 3-500B a year in 2 wars? And those are just the fiscal questions?
Where was the tea party when we passed the "patriot act" stripping citizens of their constitutional freedoms?
You all sad idle while the rest of us tried to draw attention to it. So I'd say welcome to the party but the party ended 10 years ago. You all missed the opportunity to rein in spending but you supported a red-neck idiot from Texas as he sold the farm to his buddies in order to get elected.
Good luck with it now.
Truman
ReplyDeleteI had seen numbers that said we bring in $200B a month revenue while SSN,Medicare, Medicaid, and VA benefits equate to about $170B leaving $30B left to pay the rest of the budget items.
You ask where was the Tea Party when the laundry list above was going on; my guess is that they were running businesses and working. It wasn't until they saw a big downturn or lost their jobs that they started to raise Cain. Some of these Tea Party members have been raising the issue but its getting more play because it's gotten to far out hand.
"It wasn't until they saw a big downturn or lost their jobs that they started to raise Cain."
ReplyDeleteSo as long as they were doing well, they were ok with the spending binge that the government was on. But once things got personal they cared? Yeah, great attitude. We were 9.3T in debt when Obama came to office. Most of the increase in the deficit isn't increased spending, it's decreased tax revenues due to the economy. And most of the increased spending was set forth in bush era policies like I laid out.
So it's awful convenient for them to suddenly find religion (ie. fiscal conservativism)....awful convenient and awful hypocritic.
"Some of these Tea Party members have been raising the issue but its getting more play because it's gotten to far out hand."
Yes, 9.3T in debt wasn't much, but 14T is suddenly. Nevermind all the bills that the GOP congress passed through reconciliation that cost us trillions right?
It's out of hand now that we have a democrat in office - that must be the cause.
Nice logic, or lack thereof.
I'd say welcome to the party but I'd actually prefer you all to go away. Your voices, while shedding light on the problem only paint those of us who are truly fiscal conservatives and not just fair weather conservatives as nut jobs like the rest of you.
Because it's reasonable to bring the issue to light. But the moment you advocate default like the tea party morons did, you advocate a path that is destructive - ie moronic.
And you make the rest of us look bad by proxy. But hey, you'll be able to go back to sticking your head in the sand if a GOP wins the presidency right? Because the GOP will save us.
Oh wait, they're part of the problem too.....and so is the tea party.
Truman
ReplyDeleteI am speculating as to why the Tea Party movement gain steam when it did. As for Bush tax cuts are concerned here are the tax reciepts during Bush's eight years.
All number are in Billions of dollars
2000 - 2.025.2
2001 - 1991.1
2002 - 1853.1
2003 - 1782.3
2004 - 1880.1
2005 - 2153.6
2006 - 2406.9
2007 - 2568.0
2008 - 2524.0
2009 - 2105.0
2010 - 2162.7
Now the tax cuts are enacted in 2001 and 2003. Even with a growth in Unemployment the tax revenue went from 1991.1 to 2162.7 with a high of 2568.0 during that time frame. The reason the for the decline in tax revenue in 2009 and 2010 is due primarily to loss of jobs.
Part of the Tea Party being painted as "terrorist" is done to marginalize and neutralize the ground swell for fiscal conservative ideals. Does it reflect poorly onto fiscal conservatives that have been here all along? Yes it does that I agree.
I don't think you will see the Tea Party go away when a Republican wins the White House in 2012. Actually, based on conversations I had over the weekend with a few local Tea Party members, they will be ramping up the heat to demand quicker response to reversing the growth of government that we have seen over the past twenty years.