Let’s talk debt ceiling

By Jeff — Jeff Wilson

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Tea Party USA?

Normally I’d steer clear of posting about a national story like our debt limit struggle unless it has some kind of neat local tie-in (incidentally, it does, in a way, with an influential radio personality suggesting our Congressman become a member of the proposed Super Congress), but seeing as how by Tuesday Uncle Sam’s FICO score is going to plunge below 600 and he’ll have to start going to dingy check-cashing places while promising China that “the check is in the mail….I swear!,” I thought we could break the rule just this one time.

Besides, it seems to be something you want to talk about. A frustrated SCVTalk reader wrote the following:

Well tea party…. you have gotten your dream, the country is at an impassable point . Now there’s actually a reason to buy the gold you and Glenn Beck have been selling on Fox!

Well it won’t last. The American people aren’t going to stand for you hijacking the economy and the government.

You have proven to the people that you can not be a political party, or even a part of another political party. You can not even compromise among yourselves. You can not govern.

You have blamed Obama for the economy, debt and economic situation in America, even though it started before he was elected. You say that he has increased the debt more than any other president, yet you sat quietly by while Bush massively increased the debt!

We have fought in two wars over the last ten years and haven’t faced any consequence for them. (Instead of asking Americans to sacrifice for our troops, the Republicans gave them tax cuts!)

If the republicans and democrats weere smart they would team up against you and pass what ever they want and throw your dead beat asses out in a couple of years. Just think tea party reps, what have you really accomplished?

I think it’s clear that the framers of the Constitution intended for representatives in Washington to compromise with each other. But this crisis shows what happens when 1/3rd of the government (really 1/6th, if you consider the Tea Party Caucus has about 60 members in the House of Reps) is determined to torpedo anything and everything that isn’t ideologically pure.

Last night, the Tea Party scuttled John Boehner’s plan. And he’s a conservative! And he wasn’t proposing any tax increases.

What hope do we have that they’ll compromise with liberals and moderates? These guys consider compromise a bad word.

Comments (59)

joshmannJuly 29, 2011 at 7:35 am

Well, like many ‘grand experiements’ as this republic is, there are bound to be a few poor results. As Dan Schnur mentioned at a recent VIA luncheon, we have done a great job in recent years of electing the leftest of the left and (like hot tea in your lap) the rightest of the right as growing factions of the two major parties. So, when issues requiring real compromise come along (debt being a necessary evil for all of us), the more moderate voices (if only because they have to be) of President Obama and Speaker Boehner are simply drowned out.

CastaicClayJuly 29, 2011 at 9:03 am

I am not trying to pick a fight, but why is debt a necessary evil?

CCJuly 29, 2011 at 10:05 am

Deficits can be used to aid the economy out of a recession (put people to work by buying stuff, eg. roads, bridges, dams, etc.) However, the U.S. has failed to seize the opportunities during an economic boom and reduce spending with budget surpluses which also aid to slow inflation. To place the blame at Bush or Obama is sophomoric. The economy was tanking and spending had to happen to avoid a catastrophic depression. Bush put through a spending plan and Obama carried it into his administration because it was the right thing to do. You can argue about the methods used, but the theory was sound. Anyone who thinks this country can pop out of this recession in under 4 years is kidding themselves. To do so too quickly would bring terrible inflation down on us and trust me, that wouldn’t be pleasant when you are spending $9 per gallon of gas. It’s just like dieting, you can lose your weight sensibly over time and change your behavior, or go on a crash diet and gain it all back plus more.

AlpinerJuly 29, 2011 at 4:17 pm

I am afraid with the spending we have already done inflation is already coming…

CastaicClayJuly 29, 2011 at 8:42 pm

Is inflation debt?

CastaicClayJuly 29, 2011 at 8:52 pm

Good business is to pay your debt with money you have in your account, not borrow to pay it. I am not clear on borrowing to pay debt so you can accrue more. Any business borrowing to make payroll this month and then paying it back with next months receipts only to borrow the same amount next month is on the road to ruin IMO.

Capt. GeneJuly 31, 2011 at 6:58 pm

Yeah, or ramming a two trillion dollar HCR bill down the throats of a country that didn’t want it and can’t afford it.

ToddJuly 29, 2011 at 7:41 am

Personally, I’m hoping the $1 Trillion coin gets minted… would be a fine addition to my collection. That being said, I think the Tea Party just handed the 2012 election to Obama. No mater what sort of “revolution” they wanted to start, a revolution involves movement in a direction, not stagnation and deadlock. That is an expensive lesson they should have learned by now. Remember, our system of checks and balances is about just that. BALANCING. Not tilting to one side just for the sake of holding the scale down with your thumb. Compromise must still be reached. Memo to the Tea Party: You don’t have a mandate. You won some elections in a few areas, but 51% of America didn’t elect you. Not by a long shot. So guess what, you can’t just do whatever you want. You have to give some for what you want to take.

spineflower2July 29, 2011 at 7:54 am

The Tea Party is like the rich kid taking the all home when he starts to lose the game. “Mommy, it’s everybody ELSE’S fault, not mine!” Turns out they drink whine, not tea.

James FarleyJuly 29, 2011 at 8:00 am

Barak Obama – January 2009 to congressional leaders on discussion of the size of the stimulus “Elections have consequences” and “I won”. He has since done everything he can to increase the size of government with absolutely no compromise with the Republicans. It takes both sides to compromise. What does the House disagreement matter at this point when Reed has already said Boehner’s bill will be DOA in the Senate? The American people clearly stated they want smaller government in the 2010 election. The country is now more aligned with the Tea Party agenda than with continuing to grow government unchecked. This is a fight that had to happen and it is time for the left wingers in power to compromise as well.

CCJuly 29, 2011 at 9:47 am

Can you support that claim with more than hyperbole?

James FarleyJuly 29, 2011 at 10:41 am

Everything above is fact based and while it encompasses my opinion I don’t see any exagerated figures of speech. You see hyperbole. Guess there won’t be any compromise here.

spineflower2July 29, 2011 at 12:19 pm

One example is your statement: “The country is now more aligned with the Tea Party agenda than with continuing to grow government unchecked.” Since the budget must be passed by both houses, with each party leading one, the spending is not “unchecked.” There are checks and balances in the budget process. You stand up a strawman, knock it down, and thereby prove nothing.

James FarleyJuly 29, 2011 at 1:53 pm

A strawman??? You don’t think the 2010 election results indicate a shift in the electorate away from Obamas policies and towards the Tea Party’s? We may not know the extent of the shift but I think it is pretty clear there has been one. I guess what really matters is wher the electorate will be in 2012. I really don’t see how that was setting up a “strawman” arguement.

MikeJuly 29, 2011 at 2:07 pm

In any competitive state where the Tea Party candidate won a contested primary, the Republicans lost. You can certainly argue a swing a away from Obama, but hardly towards the Tea Party.

spineflower2July 29, 2011 at 2:18 pm

You equate Obama with unchecked spending, a fallacy that permeates all these strawmen you are knocking down. A shift of a few percentage points does not constitute a majority, or the mandate to avoid any compromise. If you want to take down our economy just to please the most extreme on the right, then come out and say it like the rest of the Tea Partiers.

Capt. GeneJuly 29, 2011 at 4:11 pm

Yeah, the dems showed how they love comprimise when they shoved HCR through. I don’t know if the message the electorate wanted to send was pro Tea Party or not, but it was clearly anti-Obama. A fact not lost on Mr. Hopey/Changey: “I’m not recommending for every future president that they take a shellacking like I did last night.”

IHeartSCVJuly 29, 2011 at 8:06 am

More of this Tea Party as bogeyman stuff? Yawn. Yes, let’s get mad at the people who are forcing a conversation on taxes and spending. Because if they just shut up and sign onto a plan, all the legislators are going to work just as hard to straighten things out without a deadline or threat looming, right?

JeffJuly 29, 2011 at 8:10 am

Confused…the last 100+ times we raised the debt ceiling, no one held the entire economy hostage to this simple, procedural matter. It would have been akin to Nancy Pelosi demanding that President Bush sign a bill defunding the war in Iraq just to get the debt ceiling raised. You find that tactic appropriate?

IHeartSCVJuly 29, 2011 at 8:27 am

Of course it’s appropriate. They’re a small component of congress, and this is how they force a national focus on taxes, spending, and the economy. Nobody takes any meaningful action unless they’re facing a crisis.

JeffJuly 29, 2011 at 9:49 am

But that idea, governing-by-crisis, makes Washington look a lot more like Sacramento, or worse, like some tin-pot third world country that’s constantly teetering on the brink. It may be a legitimate tactic, but it’s not good for the country.

spineflower2July 29, 2011 at 8:39 am

Jeff, you are right that the time for debating how much we spend is the BUDGET hearings, not those on the debt ceiling. Holding the economy hostage to their view on this issue shows the Tea Party only cares about themselves and their power, and gives not one bit about the damage they do in pursuing it. Anyone remember the scene in Blazing Saddles when Sheriff Bart holds a gun to himself, to get the town to drop their weapons?

Lori RivasJuly 29, 2011 at 1:55 pm

“He’s got a gun…I think he’s going to use it!”

NFICJuly 29, 2011 at 8:09 am

At some point, the Republican leadership of the house will figure out they need to get a debt ceiling bill with bipartisian support passed, painfully illustrated by the Tea Partiers and right wingers inability to get behind anything but extremist measures which makes the House Republicans look loke a bunch of circus clowns. Below is a comment from an noted Wall Street economist who from a bank we use regarding this: “The extra declines tacked onto the recession are interesting, but right now we are more concerned about the weakness in the economy in the first half of this year. Hopefully, someone will bring them to the attention of our legislators in Washington, where they should be thinking about two things: 1. The economy is in a fragile state and may not withstand a government shutdown. Some sort of debt agreement must be reached by the August 2 deadline or the economy could fall into recession. 2. Government spending has cut an average 2/3 of a percent from GDP growth in the past three quarters, mostly because state and local governments are shrinking. Deep federal spending cuts in 2011 or 2012 are not a good idea. Chris Low” If the Republicans really want to lose ground, they’ll continue with this stalemate. While I support smaller government, one thing I learned from my many undergraduate and graduate econ classes is that more government spending during depressions and recessions is exactly what is needed to help the economy. We pulled out of the Depression because of the mother of all stimulus programs – WWII. There is no economic evidence that lower taxes increase consumption and create jobs growth. Rather, the opposite has been shown especially recently. Tax cuts have led to people paying down their debt, not spending more. Job growth is caused by increases in consumption. Employer’s won’t hire more workers if there is no demand for their products – even if their tax rate shrank to zero because it would be a losing proposition. While inefficient, the government will spend the money they get in times like these rather than pay down the debt. You pay down the debt when times are good – something both parties have not adhered to over the past 10 years. While many view Clinton as a liberal, he along with the Gingrich House created a fiscal conservativatism. Bush’s tax cuts and wars during good times when we should have been paying down our debt play a huge part in where we are today.

spineflower2July 29, 2011 at 8:33 am

Kudos for recognizing that it is the good times that allow us to pay down debt, not during the second largest recession/depression in U.S. history. And kudos for exploding the myth that Clinton was too libersl. He succeeded because he aimed for the middle, something the current Republicans are unable to do when beholden to the extemists fro the Tea Party. Even Reagan slid towards the middle on many issues because he knew that is where the job really gets done.

AlpinerJuly 29, 2011 at 4:20 pm

Extremist measures? Cutting spending. No tax increases…that is now considered extremist. Jeez, maybe I am closer to the Tea Party position than I thought….scary….

spineflower2July 29, 2011 at 8:05 pm

No, but taking down the economy by stalling the spending limit increase IS extremist. And “no tax increases” IS extremist when you ask the poor and middle class to contribute to solving the problem, but give the rich and rich corporations a pass.

JayceJuly 29, 2011 at 8:16 am

The people also want education, the roads repaired, police and fire protection etc etc etc.

AlpinerJuly 29, 2011 at 4:51 pm

The GOP should add to the bill that they will approve a tax increase as long as all federal elections are moved to April 16.

spineflower2July 29, 2011 at 8:30 am

Lower taxes create jobs? Nope. Check two recent examples: 1) California’s sales tax dropped this year, but I have yet to read about the influx of companies lured by lower taxes to the Golden State. Hasn’t happened. ( http://www.kcra.com/news/28397418/detail.html ) 2) FAA tax on airline tickets dropped. New jobs? No, the airlines raised their prices and pocketed the profits. ( http://blogs.wsj.com/middleseat/2011/07/25/airlines-pocket-ticket-tax-holiday/ ) The myth of the rich creating jobs died with “trickle-down economics” baloney, and we learned we just get “trickled ON.”

PanicButton42July 29, 2011 at 9:11 am

Point number 1 is a fallacy of logic. It implies that the only reason that companies are staying away was because of the tax rate. I think we can all agree that is far from the case. It also implies that the lowering of the sales tax brings CA back to a competitive rate. Unfortunately when you factor in many CA County and City taxes, CA is still one of the highest around. Just sayin’.

CCJuly 29, 2011 at 9:54 am

Right on the mark PanicButton. Besides, who’s going to drop a factory in California one month after the reduction of sales tax? Sorta silly, don’t ya think? @Spineflower: But as I heard advertising this morning by a car dealer to encourage people to buy a car because the tax has gone down. Buy a car, put a person to work. It really isn’t that difficult to follow the money. As for the reduction in the FAA fees. Airlines did not reduce their fees, so they are slightly more profitable, so they don’t have to lay off their workers and that’s a win. The U.S. simply isn’t competitive in the world market…period. So just like WalMart, some prices (taxes) need to be slashed.

JeffJuly 29, 2011 at 9:56 am

American corporations also aren’t as competitive because they face ever-rising health care costs, which, inevitably, get taken out of worker’s pay. Other countries do it more rationally: they have single-payer healthcare which allows their companies to have an advantage over our’s.

CCJuly 29, 2011 at 10:09 am

Ummm, India and China and the Philippines are gaining our companies and none of these employee the Utopia you propose. Further, I’ve work at a multi-national company. Single-payer healthcare isn’t even a blip on the map when it comes time to invest in foreign countries.

Capt. GeneJuly 29, 2011 at 10:28 am

“Other countries do it more rationally: they have single-payer healthcare which allows their companies to have an advantage over our’s.” As long as that “single payer” is not a citizen of the same country I would agree, otherwise who do you think the “single payer” is?

Capt. GeneJuly 29, 2011 at 10:22 am

Can you tell me what happened to the unemployment rate when the Bush tax cuts took effect? Take a look at this website bls.gov and let me know what you find. I’ll even give you a head start: http://data.bls.gov/timeseries/LNS14000000

MikeJuly 29, 2011 at 10:32 am

Thanks for the numbers, that makes it easy. Signed June 2001, followed by 10 months of flat or rising unemployment. The unemployment rate didn’t return to June 2001 levels until September 2006, over five years later.

Capt. GeneJuly 29, 2011 at 12:03 pm

I was actually thinking of the tax cuts from 2003. Yeah, you’re right, it took ten months for it to turn around. Oh yeah, and directly in the middle of that was Sept. 11, the Sept. 11 which of course had no effect on anything. How long has Obama been in office?

spineflower2July 29, 2011 at 12:21 pm

You can’t have it both ways. If you are claiming higher taxes drive away business, then lower taxes will avoid that, or reverse it. Not happening. Ergo, your premise is invalid.

Capt. GeneJuly 29, 2011 at 4:29 pm

Even with the drop, CA is still has the highest sales tax in the nation. Until it drops to say second highest then it is your premise that is invalid.

spineflower2July 29, 2011 at 8:11 pm

Uhh… no. You said when tax rates go up, jobs and companies are lost. Or are you saying there is a point where further taxes fail to cost jobs or companies? Then why not INCREASE taxes further? See how silly that is? It works both ways. You can’t claim a one-way link. Not AND be taken seriously, anyway. And you also leave out the fact that California has some of the lowest property taxes (due to Prop 13), so you really have to look at the total tax burden, and not just the state rate.

Capt. GeneJuly 31, 2011 at 6:56 pm

Aren’t you the one that said: “California’s sales tax dropped this year, but I have yet to read about the influx of companies lured by lower taxes to the Golden State. Hasn’t happened.”? While it’s true that the sales tax rate has dropped as of Jult 1st, it is still the highest in the nation, 49 other states (56 other states if your Obama) still have a lower sales tax rate than California. How could you possibly expect that drop in sales tax to create jobs? Are you being intentionally obtuse, or do you truly not get it?

AlpinerJuly 29, 2011 at 8:43 am

Not a major Tea Party supporter, but give me a break, the left has as much a part of this than anyone. It comes down to this. No cap on spending or a cap on spending. Two strong viewpoints that of course are going to bump.

spineflower2July 29, 2011 at 8:48 am

So you say it’s the left that makes THIS debt limit debate different than the previous 90 debates? Uh-huh.

Whiskey Tango FoxtrotJuly 29, 2011 at 11:00 am

I can no longer depend on Congress to act responsibily when it comes to spending our money. There is too much influence in Washington for that to occure. The only way to allow these irresponsible teenagers to use our credit card is to set a limit in the amount of spending. Go over the limit, Mommy and Daddy takes the credit card away. A debt limit increase would pass tonight with Tea Party support and would be effective PAST the 2012 election if our lawmakers would agree to a balanced budget amendment. The debt limit would be raised in two chunks. It would mandate that the second hike of the ceiling occur after the BBA passed both houses of congress and went to the states for a vote. The amendment would certainly be overwhelmingly approved by the voters (65 to 27, 8 undecided in a recent poll). It would help remove the influence and pressure that lobbyists place on lawmakers and finally mandate that Congress do the fiscally responsible thing for the country as opposed to just looking out for themselves and their next election. As a fiscal conservative, I’m up to here with being labeled “extreme” or “ideological” for insisting that government spending not outstrip goverment revenues. Until recently, I kinda thought that was a good thing. Silly me.

spineflower2July 29, 2011 at 12:26 pm

You miss the point. It’s not merely a balanced budget the far right is insisting on. They insist on “no new taxes” to the point of not putting taxes back where they were even under Bush. They insist we keep tax breaks for the richest corporations and citizens of the country. As long as they hold the mainstream Republican party to this extremist agenda, there can’t be a compromise that works. And they are holding to this extremism even to the point of knowingly breaking our financial system. The irresponsibility is appalling, though no longer suprising.

Phil EllisJuly 29, 2011 at 2:27 pm

Spend, spend spend = responsibility. Cap spending to no more than income = irresponsibility Is that the argument I am hearing?

Capt. GeneJuly 29, 2011 at 4:31 pm

That’s exactly what you’re hearing. It’s incredible.

NateJuly 29, 2011 at 4:37 pm

Spend, spend spend on MILITARY = responsibility?

Whiskey Tango FoxtrotJuly 29, 2011 at 4:58 pm

EVERYTHING needs to be on the table. There are no sacred cows. Entitlements such as Medicare, SS, Medicade and spending on military all need to be adjusted.

Whiskey Tango FoxtrotJuly 29, 2011 at 5:02 pm

Sorry. Meant “medicaid”.

Capt. GeneJuly 29, 2011 at 5:39 pm

I’m all for cutting military spending, I’d like to see waste and fraud vigorously prosecuted as well.

Mr PerezJuly 30, 2011 at 12:14 am

When you say cut spending on military I hope you realize who shoulders that burden. And it’s not the military industrial complex contracts a certain Congressman in this area loves to push. It ends up being the actual troops who have put their lives on the line to have the rug pulled out from under the feet. And it’s also not those in Congress or the Senate who make large salaries and have huge expense accounts. The real sacred cows are spared because they are the ones doing the voting.

spineflower2July 29, 2011 at 8:12 pm

I can’t know what you are hearing, but that’s not what is being said here.

Whiskey Tango FoxtrotJuly 31, 2011 at 1:01 pm

http://hotair.com/archives/2011/07/30/video-marco-rubio-vs-john-kerry-on-the-debt-crisis/

Coastal SageJuly 29, 2011 at 1:45 pm

To me, the markets, the Dollar, gold and Congress are in such flux, there’s no point in discussing what’s going on in Congress, because the reality is that I can’t change it, nor can any of the people who post here. So we simply watch and wait. However, the one thing which really bugs me is all of the fracas on television and in the mainstream press about the “Rating Agencies” opinions, as if they were brilliant ancient Greek oracles. Having lived and worked in Manhattan, I can say that the MBAs, attorneys and economists who get jobs at the 3 rating agencies are “from the bottom of their class” academically. No self respecting top-of-one’s-class goes to work for any of the rating agencies, first because that is not where serious money is to be made and second as a matter of personal pride. I could digress and write about how stupid the lawyers and MBAs at the “Rating Agencies” were when I dealt with them representing special servicers on CMBS deals, but the detail would be far too boring except to say one could explain a deal to them 3 times, and they still wouldn’t understand it, despite the fact that it was these clowns’ employers who were re-rating securities default risk. One must remember that it was the “Rating Agencies” who were paid off to give AAA ratings to the whole range of complex securities based on garbage collateral, or unreserved insurance (credit default swaps) which defaulted, and which the Federal Reserve ultimately bought from the banks during the more complex part of the “bail outs”. As a result, if there is a political message from this “crisis”, it is that the Rating Agencies are overrated in terms of their collective intellect. The reality is that their commentary is propaganda, the likes of which (pick your un-favorite) Keith Olbermann or Bill O’Reilly spew. Sophisticated investors know that, and so do sophisticated sovereign debt buyers like the treasury departments of China, Russia and other large creditor nations. The really interesting story is that last night, around 11PM, Reuters online posted a story (linked on Drudge) which purported to contain leaks from Treasury Secretary Geithner’s office. The Reuters story said that Geithner has decided, if the debt ceiling is not promptly raised, to pay the interest and principal due on Treasury securities, but to NOT pay Medicare vendors, Medicaid reimbursements to states, and Federal unemployment insurance reimbursements to states. There was little further detail on who wouldn’t be paid with Federal funds. Not surprising, the story was pulled…clearly because its content was true. There is always hope that the “debt ceiling crisis” will be resolved next week, but as this point as Congress blathers on as of 2:45PM Friday, who knows what will happen. However, my son, the academic student of the mechanics of revolutions, says he fears that with the advent of Twitter and the dependence of the poor and middle class on extended unemployment insurance benefits and Food Stamps funded by the Treasury, that there may be serious civil unrest when those Federally funded unemployment and Food Stamp debit cards stop being recharged with the equivalent of cash. Stay safe everybody.

AlpinerJuly 29, 2011 at 4:55 pm

Apple now is holding more cash than the U.S. Government!!!! http://www.bbc.co.uk/news/technology-14340470

CCJuly 29, 2011 at 8:08 pm

Yes, and they have plenty of mine. I just picked up my new MacBook Pro tonight. So my future posts should feel a bit smarter at least in theory When I purchased the iPad last year, I felt so guilty to purchase something so frivolous that I also bought stock. I’m pretty sure I am even.

AlpinerJuly 29, 2011 at 8:27 pm

My daughter is buying her new MacBook Pro for college tomorrow. She cannot wait (and neither can I)!

joshmannJuly 29, 2011 at 7:35 am
Well, like many ‘grand experiements’ as this republic is, there are bound to be a few poor results. As Dan Schnur mentioned at a recent VIA luncheon, we have done a great job in recent years of electing the leftest of the left and (like hot tea in your lap) the rightest of the right as growing factions of the two major parties. So, when issues requiring real compromise come along (debt being a necessary evil for all of us), the more moderate voices (if only because they have to be) of President Obama and Speaker Boehner are simply drowned out.
CastaicClayJuly 29, 2011 at 9:03 am
I am not trying to pick a fight, but why is debt a necessary evil?
CCJuly 29, 2011 at 10:05 am
Deficits can be used to aid the economy out of a recession (put people to work by buying stuff, eg. roads, bridges, dams, etc.) However, the U.S. has failed to seize the opportunities during an economic boom and reduce spending with budget surpluses which also aid to slow inflation. To place the blame at Bush or Obama is sophomoric. The economy was tanking and spending had to happen to avoid a catastrophic depression. Bush put through a spending plan and Obama carried it into his administration because it was the right thing to do. You can argue about the methods used, but the theory was sound. Anyone who thinks this country can pop out of this recession in under 4 years is kidding themselves. To do so too quickly would bring terrible inflation down on us and trust me, that wouldn’t be pleasant when you are spending $9 per gallon of gas. It’s just like dieting, you can lose your weight sensibly over time and change your behavior, or go on a crash diet and gain it all back plus more.
AlpinerJuly 29, 2011 at 4:17 pm
I am afraid with the spending we have already done inflation is already coming…
CastaicClayJuly 29, 2011 at 8:42 pm
Is inflation debt?
CastaicClayJuly 29, 2011 at 8:52 pm
Good business is to pay your debt with money you have in your account, not borrow to pay it. I am not clear on borrowing to pay debt so you can accrue more. Any business borrowing to make payroll this month and then paying it back with next months receipts only to borrow the same amount next month is on the road to ruin IMO.
Capt. GeneJuly 31, 2011 at 6:58 pm
Yeah, or ramming a two trillion dollar HCR bill down the throats of a country that didn’t want it and can’t afford it.
ToddJuly 29, 2011 at 7:41 am
Personally, I’m hoping the $1 Trillion coin gets minted… would be a fine addition to my collection. That being said, I think the Tea Party just handed the 2012 election to Obama. No mater what sort of “revolution” they wanted to start, a revolution involves movement in a direction, not stagnation and deadlock. That is an expensive lesson they should have learned by now. Remember, our system of checks and balances is about just that. BALANCING. Not tilting to one side just for the sake of holding the scale down with your thumb. Compromise must still be reached. Memo to the Tea Party: You don’t have a mandate. You won some elections in a few areas, but 51% of America didn’t elect you. Not by a long shot. So guess what, you can’t just do whatever you want. You have to give some for what you want to take.
spineflower2July 29, 2011 at 7:54 am
The Tea Party is like the rich kid taking the all home when he starts to lose the game. “Mommy, it’s everybody ELSE’S fault, not mine!” Turns out they drink whine, not tea.
James FarleyJuly 29, 2011 at 8:00 am
Barak Obama – January 2009 to congressional leaders on discussion of the size of the stimulus “Elections have consequences” and “I won”. He has since done everything he can to increase the size of government with absolutely no compromise with the Republicans. It takes both sides to compromise. What does the House disagreement matter at this point when Reed has already said Boehner’s bill will be DOA in the Senate? The American people clearly stated they want smaller government in the 2010 election. The country is now more aligned with the Tea Party agenda than with continuing to grow government unchecked. This is a fight that had to happen and it is time for the left wingers in power to compromise as well.
CCJuly 29, 2011 at 9:47 am
Can you support that claim with more than hyperbole?
James FarleyJuly 29, 2011 at 10:41 am
Everything above is fact based and while it encompasses my opinion I don’t see any exagerated figures of speech. You see hyperbole. Guess there won’t be any compromise here.
spineflower2July 29, 2011 at 12:19 pm
One example is your statement: “The country is now more aligned with the Tea Party agenda than with continuing to grow government unchecked.” Since the budget must be passed by both houses, with each party leading one, the spending is not “unchecked.” There are checks and balances in the budget process. You stand up a strawman, knock it down, and thereby prove nothing.
James FarleyJuly 29, 2011 at 1:53 pm
A strawman??? You don’t think the 2010 election results indicate a shift in the electorate away from Obamas policies and towards the Tea Party’s? We may not know the extent of the shift but I think it is pretty clear there has been one. I guess what really matters is wher the electorate will be in 2012. I really don’t see how that was setting up a “strawman” arguement.
MikeJuly 29, 2011 at 2:07 pm
In any competitive state where the Tea Party candidate won a contested primary, the Republicans lost. You can certainly argue a swing a away from Obama, but hardly towards the Tea Party.
spineflower2July 29, 2011 at 2:18 pm
You equate Obama with unchecked spending, a fallacy that permeates all these strawmen you are knocking down. A shift of a few percentage points does not constitute a majority, or the mandate to avoid any compromise. If you want to take down our economy just to please the most extreme on the right, then come out and say it like the rest of the Tea Partiers.
Capt. GeneJuly 29, 2011 at 4:11 pm
Yeah, the dems showed how they love comprimise when they shoved HCR through. I don’t know if the message the electorate wanted to send was pro Tea Party or not, but it was clearly anti-Obama. A fact not lost on Mr. Hopey/Changey: “I’m not recommending for every future president that they take a shellacking like I did last night.”
IHeartSCVJuly 29, 2011 at 8:06 am
More of this Tea Party as bogeyman stuff? Yawn. Yes, let’s get mad at the people who are forcing a conversation on taxes and spending. Because if they just shut up and sign onto a plan, all the legislators are going to work just as hard to straighten things out without a deadline or threat looming, right?
JeffJuly 29, 2011 at 8:10 am
Confused…the last 100+ times we raised the debt ceiling, no one held the entire economy hostage to this simple, procedural matter. It would have been akin to Nancy Pelosi demanding that President Bush sign a bill defunding the war in Iraq just to get the debt ceiling raised. You find that tactic appropriate?
IHeartSCVJuly 29, 2011 at 8:27 am
Of course it’s appropriate. They’re a small component of congress, and this is how they force a national focus on taxes, spending, and the economy. Nobody takes any meaningful action unless they’re facing a crisis.
JeffJuly 29, 2011 at 9:49 am
But that idea, governing-by-crisis, makes Washington look a lot more like Sacramento, or worse, like some tin-pot third world country that’s constantly teetering on the brink. It may be a legitimate tactic, but it’s not good for the country.
spineflower2July 29, 2011 at 8:39 am
Jeff, you are right that the time for debating how much we spend is the BUDGET hearings, not those on the debt ceiling. Holding the economy hostage to their view on this issue shows the Tea Party only cares about themselves and their power, and gives not one bit about the damage they do in pursuing it. Anyone remember the scene in Blazing Saddles when Sheriff Bart holds a gun to himself, to get the town to drop their weapons?
Lori RivasJuly 29, 2011 at 1:55 pm
“He’s got a gun…I think he’s going to use it!”
NFICJuly 29, 2011 at 8:09 am
At some point, the Republican leadership of the house will figure out they need to get a debt ceiling bill with bipartisian support passed, painfully illustrated by the Tea Partiers and right wingers inability to get behind anything but extremist measures which makes the House Republicans look loke a bunch of circus clowns. Below is a comment from an noted Wall Street economist who from a bank we use regarding this: “The extra declines tacked onto the recession are interesting, but right now we are more concerned about the weakness in the economy in the first half of this year. Hopefully, someone will bring them to the attention of our legislators in Washington, where they should be thinking about two things: 1. The economy is in a fragile state and may not withstand a government shutdown. Some sort of debt agreement must be reached by the August 2 deadline or the economy could fall into recession. 2. Government spending has cut an average 2/3 of a percent from GDP growth in the past three quarters, mostly because state and local governments are shrinking. Deep federal spending cuts in 2011 or 2012 are not a good idea. Chris Low” If the Republicans really want to lose ground, they’ll continue with this stalemate. While I support smaller government, one thing I learned from my many undergraduate and graduate econ classes is that more government spending during depressions and recessions is exactly what is needed to help the economy. We pulled out of the Depression because of the mother of all stimulus programs – WWII. There is no economic evidence that lower taxes increase consumption and create jobs growth. Rather, the opposite has been shown especially recently. Tax cuts have led to people paying down their debt, not spending more. Job growth is caused by increases in consumption. Employer’s won’t hire more workers if there is no demand for their products – even if their tax rate shrank to zero because it would be a losing proposition. While inefficient, the government will spend the money they get in times like these rather than pay down the debt. You pay down the debt when times are good – something both parties have not adhered to over the past 10 years. While many view Clinton as a liberal, he along with the Gingrich House created a fiscal conservativatism. Bush’s tax cuts and wars during good times when we should have been paying down our debt play a huge part in where we are today.
spineflower2July 29, 2011 at 8:33 am
Kudos for recognizing that it is the good times that allow us to pay down debt, not during the second largest recession/depression in U.S. history. And kudos for exploding the myth that Clinton was too libersl. He succeeded because he aimed for the middle, something the current Republicans are unable to do when beholden to the extemists fro the Tea Party. Even Reagan slid towards the middle on many issues because he knew that is where the job really gets done.
AlpinerJuly 29, 2011 at 4:20 pm
Extremist measures? Cutting spending. No tax increases…that is now considered extremist. Jeez, maybe I am closer to the Tea Party position than I thought….scary….
spineflower2July 29, 2011 at 8:05 pm
No, but taking down the economy by stalling the spending limit increase IS extremist. And “no tax increases” IS extremist when you ask the poor and middle class to contribute to solving the problem, but give the rich and rich corporations a pass.
JayceJuly 29, 2011 at 8:16 am
The people also want education, the roads repaired, police and fire protection etc etc etc.
AlpinerJuly 29, 2011 at 4:51 pm
The GOP should add to the bill that they will approve a tax increase as long as all federal elections are moved to April 16.
spineflower2July 29, 2011 at 8:30 am
Lower taxes create jobs? Nope. Check two recent examples: 1) California’s sales tax dropped this year, but I have yet to read about the influx of companies lured by lower taxes to the Golden State. Hasn’t happened. ( http://www.kcra.com/news/28397418/detail.html ) 2) FAA tax on airline tickets dropped. New jobs? No, the airlines raised their prices and pocketed the profits. ( http://blogs.wsj.com/middleseat/2011/07/25/airlines-pocket-ticket-tax-holiday/ ) The myth of the rich creating jobs died with “trickle-down economics” baloney, and we learned we just get “trickled ON.”
PanicButton42July 29, 2011 at 9:11 am
Point number 1 is a fallacy of logic. It implies that the only reason that companies are staying away was because of the tax rate. I think we can all agree that is far from the case. It also implies that the lowering of the sales tax brings CA back to a competitive rate. Unfortunately when you factor in many CA County and City taxes, CA is still one of the highest around. Just sayin’.
CCJuly 29, 2011 at 9:54 am
Right on the mark PanicButton. Besides, who’s going to drop a factory in California one month after the reduction of sales tax? Sorta silly, don’t ya think? @Spineflower: But as I heard advertising this morning by a car dealer to encourage people to buy a car because the tax has gone down. Buy a car, put a person to work. It really isn’t that difficult to follow the money. As for the reduction in the FAA fees. Airlines did not reduce their fees, so they are slightly more profitable, so they don’t have to lay off their workers and that’s a win. The U.S. simply isn’t competitive in the world market…period. So just like WalMart, some prices (taxes) need to be slashed.
JeffJuly 29, 2011 at 9:56 am
American corporations also aren’t as competitive because they face ever-rising health care costs, which, inevitably, get taken out of worker’s pay. Other countries do it more rationally: they have single-payer healthcare which allows their companies to have an advantage over our’s.
CCJuly 29, 2011 at 10:09 am
Ummm, India and China and the Philippines are gaining our companies and none of these employee the Utopia you propose. Further, I’ve work at a multi-national company. Single-payer healthcare isn’t even a blip on the map when it comes time to invest in foreign countries.
Capt. GeneJuly 29, 2011 at 10:28 am
“Other countries do it more rationally: they have single-payer healthcare which allows their companies to have an advantage over our’s.” As long as that “single payer” is not a citizen of the same country I would agree, otherwise who do you think the “single payer” is?
Capt. GeneJuly 29, 2011 at 10:22 am
Can you tell me what happened to the unemployment rate when the Bush tax cuts took effect? Take a look at this website bls.gov and let me know what you find. I’ll even give you a head start: http://data.bls.gov/timeseries/LNS14000000
MikeJuly 29, 2011 at 10:32 am
Thanks for the numbers, that makes it easy. Signed June 2001, followed by 10 months of flat or rising unemployment. The unemployment rate didn’t return to June 2001 levels until September 2006, over five years later.
Capt. GeneJuly 29, 2011 at 12:03 pm
I was actually thinking of the tax cuts from 2003. Yeah, you’re right, it took ten months for it to turn around. Oh yeah, and directly in the middle of that was Sept. 11, the Sept. 11 which of course had no effect on anything. How long has Obama been in office?
spineflower2July 29, 2011 at 12:21 pm
You can’t have it both ways. If you are claiming higher taxes drive away business, then lower taxes will avoid that, or reverse it. Not happening. Ergo, your premise is invalid.
Capt. GeneJuly 29, 2011 at 4:29 pm
Even with the drop, CA is still has the highest sales tax in the nation. Until it drops to say second highest then it is your premise that is invalid.
spineflower2July 29, 2011 at 8:11 pm
Uhh… no. You said when tax rates go up, jobs and companies are lost. Or are you saying there is a point where further taxes fail to cost jobs or companies? Then why not INCREASE taxes further? See how silly that is? It works both ways. You can’t claim a one-way link. Not AND be taken seriously, anyway. And you also leave out the fact that California has some of the lowest property taxes (due to Prop 13), so you really have to look at the total tax burden, and not just the state rate.
Capt. GeneJuly 31, 2011 at 6:56 pm
Aren’t you the one that said: “California’s sales tax dropped this year, but I have yet to read about the influx of companies lured by lower taxes to the Golden State. Hasn’t happened.”? While it’s true that the sales tax rate has dropped as of Jult 1st, it is still the highest in the nation, 49 other states (56 other states if your Obama) still have a lower sales tax rate than California. How could you possibly expect that drop in sales tax to create jobs? Are you being intentionally obtuse, or do you truly not get it?
AlpinerJuly 29, 2011 at 8:43 am
Not a major Tea Party supporter, but give me a break, the left has as much a part of this than anyone. It comes down to this. No cap on spending or a cap on spending. Two strong viewpoints that of course are going to bump.
spineflower2July 29, 2011 at 8:48 am
So you say it’s the left that makes THIS debt limit debate different than the previous 90 debates? Uh-huh.
Whiskey Tango FoxtrotJuly 29, 2011 at 11:00 am
I can no longer depend on Congress to act responsibily when it comes to spending our money. There is too much influence in Washington for that to occure. The only way to allow these irresponsible teenagers to use our credit card is to set a limit in the amount of spending. Go over the limit, Mommy and Daddy takes the credit card away. A debt limit increase would pass tonight with Tea Party support and would be effective PAST the 2012 election if our lawmakers would agree to a balanced budget amendment. The debt limit would be raised in two chunks. It would mandate that the second hike of the ceiling occur after the BBA passed both houses of congress and went to the states for a vote. The amendment would certainly be overwhelmingly approved by the voters (65 to 27, 8 undecided in a recent poll). It would help remove the influence and pressure that lobbyists place on lawmakers and finally mandate that Congress do the fiscally responsible thing for the country as opposed to just looking out for themselves and their next election. As a fiscal conservative, I’m up to here with being labeled “extreme” or “ideological” for insisting that government spending not outstrip goverment revenues. Until recently, I kinda thought that was a good thing. Silly me.
spineflower2July 29, 2011 at 12:26 pm
You miss the point. It’s not merely a balanced budget the far right is insisting on. They insist on “no new taxes” to the point of not putting taxes back where they were even under Bush. They insist we keep tax breaks for the richest corporations and citizens of the country. As long as they hold the mainstream Republican party to this extremist agenda, there can’t be a compromise that works. And they are holding to this extremism even to the point of knowingly breaking our financial system. The irresponsibility is appalling, though no longer suprising.
Phil EllisJuly 29, 2011 at 2:27 pm
Spend, spend spend = responsibility. Cap spending to no more than income = irresponsibility Is that the argument I am hearing?
Capt. GeneJuly 29, 2011 at 4:31 pm
That’s exactly what you’re hearing. It’s incredible.
NateJuly 29, 2011 at 4:37 pm
Spend, spend spend on MILITARY = responsibility?
Whiskey Tango FoxtrotJuly 29, 2011 at 4:58 pm
EVERYTHING needs to be on the table. There are no sacred cows. Entitlements such as Medicare, SS, Medicade and spending on military all need to be adjusted.
Whiskey Tango FoxtrotJuly 29, 2011 at 5:02 pm
Sorry. Meant “medicaid”.
Capt. GeneJuly 29, 2011 at 5:39 pm
I’m all for cutting military spending, I’d like to see waste and fraud vigorously prosecuted as well.
Mr PerezJuly 30, 2011 at 12:14 am
When you say cut spending on military I hope you realize who shoulders that burden. And it’s not the military industrial complex contracts a certain Congressman in this area loves to push. It ends up being the actual troops who have put their lives on the line to have the rug pulled out from under the feet. And it’s also not those in Congress or the Senate who make large salaries and have huge expense accounts. The real sacred cows are spared because they are the ones doing the voting.
spineflower2July 29, 2011 at 8:12 pm
I can’t know what you are hearing, but that’s not what is being said here.
Whiskey Tango FoxtrotJuly 31, 2011 at 1:01 pm
http://hotair.com/archives/2011/07/30/video-marco-rubio-vs-john-kerry-on-the-debt-crisis/
Coastal SageJuly 29, 2011 at 1:45 pm
To me, the markets, the Dollar, gold and Congress are in such flux, there’s no point in discussing what’s going on in Congress, because the reality is that I can’t change it, nor can any of the people who post here. So we simply watch and wait. However, the one thing which really bugs me is all of the fracas on television and in the mainstream press about the “Rating Agencies” opinions, as if they were brilliant ancient Greek oracles. Having lived and worked in Manhattan, I can say that the MBAs, attorneys and economists who get jobs at the 3 rating agencies are “from the bottom of their class” academically. No self respecting top-of-one’s-class goes to work for any of the rating agencies, first because that is not where serious money is to be made and second as a matter of personal pride. I could digress and write about how stupid the lawyers and MBAs at the “Rating Agencies” were when I dealt with them representing special servicers on CMBS deals, but the detail would be far too boring except to say one could explain a deal to them 3 times, and they still wouldn’t understand it, despite the fact that it was these clowns’ employers who were re-rating securities default risk. One must remember that it was the “Rating Agencies” who were paid off to give AAA ratings to the whole range of complex securities based on garbage collateral, or unreserved insurance (credit default swaps) which defaulted, and which the Federal Reserve ultimately bought from the banks during the more complex part of the “bail outs”. As a result, if there is a political message from this “crisis”, it is that the Rating Agencies are overrated in terms of their collective intellect. The reality is that their commentary is propaganda, the likes of which (pick your un-favorite) Keith Olbermann or Bill O’Reilly spew. Sophisticated investors know that, and so do sophisticated sovereign debt buyers like the treasury departments of China, Russia and other large creditor nations. The really interesting story is that last night, around 11PM, Reuters online posted a story (linked on Drudge) which purported to contain leaks from Treasury Secretary Geithner’s office. The Reuters story said that Geithner has decided, if the debt ceiling is not promptly raised, to pay the interest and principal due on Treasury securities, but to NOT pay Medicare vendors, Medicaid reimbursements to states, and Federal unemployment insurance reimbursements to states. There was little further detail on who wouldn’t be paid with Federal funds. Not surprising, the story was pulled…clearly because its content was true. There is always hope that the “debt ceiling crisis” will be resolved next week, but as this point as Congress blathers on as of 2:45PM Friday, who knows what will happen. However, my son, the academic student of the mechanics of revolutions, says he fears that with the advent of Twitter and the dependence of the poor and middle class on extended unemployment insurance benefits and Food Stamps funded by the Treasury, that there may be serious civil unrest when those Federally funded unemployment and Food Stamp debit cards stop being recharged with the equivalent of cash. Stay safe everybody.
AlpinerJuly 29, 2011 at 4:55 pm
Apple now is holding more cash than the U.S. Government!!!! http://www.bbc.co.uk/news/technology-14340470
CCJuly 29, 2011 at 8:08 pm
Yes, and they have plenty of mine. I just picked up my new MacBook Pro tonight. So my future posts should feel a bit smarter at least in theory When I purchased the iPad last year, I felt so guilty to purchase something so frivolous that I also bought stock. I’m pretty sure I am even.
AlpinerJuly 29, 2011 at 8:27 pm
My daughter is buying her new MacBook Pro for college tomorrow. She cannot wait (and neither can I)!