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1/18/2011
Getting to be no good reason to raise debt limit
Yesterday I mentioned Hugh Hewitt’s “Selective Shutdown” solution for addressing the debt limit. Hewitt remembers, of course, the backlash suffered by Newt Gingrich and the GOP when President Clinton vetoed their budget bill – and the government (sort of) shut down. So Hewitt’s advising Speaker Boehner to start NOW talking about the “selective shutdown” of the federal government.
At the same time, Boehner and his allies have to reassure Americans and especially senior citizens that they have provided the Senate with the bills necessary to fund Social Security, Medicare and defense, but that the president is holding these appropriations hostage in order to defend Obamacare, the bureaucrats at EPA and the leftwing broadcasters at NPR.
Ed Morrissey features Governor Tim Pawlenty on FoxNews Sunday and also a Sunday interview with the Wall Street Journal.
Tim Pawlenty comes up with an interesting “third way” on the issue of the debt ceiling that, assuming it gets signed into law, would keep the Treasury from borrowing more money while keeping the nation from a ruinous default.
In the Wall Street Journal interview, Pawlenty proposes that “Congress … pass legislation that would put interest and debt payments ahead of other federal spending and allow the federal government to pay its creditors as tax revenue flows in.”
Imagine that. As Pawlenty says, “Let’s call their bluff.” Per Morrissey:
Even if Obama refuses to go along with that strategy, it’s still worth pursuing. The refusal to sequence spending to cover obligations first will show a lack of commitment to fiscal responsibility in the White House, and the hypocrisy of the pay-go posturing of Democrats last year (as if their waivers weren’t enough). It reframes the argument from disaster avoidance to irresponsible budgeting, which is exactly where the debate needs to go. [Emphasis is mine.]
Good stuff. Frame the message around irresponsible budgeting – over and over and over, with the solution being responsible budgeting – temporarily and selectively shutting down federal activities/programs and/or prioritizing payments – interest and debt payments first and selected high priority programs as revenues become available.
Postscript: The Washington Examiner picked up Hewitt’s “selective shutdown” spin. Watch for more of it…
Jo Egelhoff, FoxPolitics.net
COMMENTS
I strongly urge the T-Party to immediately press for recall of every Republican that votes for increasing the ceiling.
jimspice (Tue Jan 18 08:06:50 2011)
Except to keep the government running and prevent further decline in the economy. Hardly any reason at all.
Wake up. Think about it.
Dean Weichmann (Tue Jan 18 08:22:48 2011)
Just more of the same, Dean. An orchestrated takeover of the nation's assets by the elites. This is just another step in the class war (which they are winning, incidentally). So Tunisia and France and Greece, watch out. We'll out-do you for sure.
Jack Lohman (Tue Jan 18 08:36:34 2011)
An orchestrated takeover of the nation's assets by the elites? Jack, you've gone over the edge.
Jo (Tue Jan 18 08:39:54 2011)
Jo, I think I'm right on target. You should look deeper into whats going on in the rest of the country.
Did you not look at the chart I posted yesterday?
Do you not recognize the strategy?
Jack Lohman (Tue Jan 18 08:46:06 2011)
This article is what I was talking about yesterday! Tax revenue generated from individuals and corporations is more than enough to fund the interest payments on the debt. To say if we don't raise the debt limit the US will default on our debt is just a scare tactic (by the Treasury Secretary Geithner) to facilitate more of the same poor fiscal management.By the way Senator Obama voted AGAINST raising the national debt limit as a senator saying it was an admonishin we couldn't manage our finances. Now his administration wants to do what he voted against!! Remember Geitner is the same guy that owed past due income taxes when he worked for the IMF. To blackmail congress to raise the debt limit or we will "default" has worked in the past but this is a new day.
PS google "national debt real time" and see how our future is being borrowed away.
Jay Schroeder (Tue Jan 18 09:25:53 2011)
Jay, you are correct. The debt keeps going up, but why? It is because the Fat Cats are paying off the politicians (in campaign contributions) to spend money on their projects and industry. The politicians could care less about balancing the budget; they are being paid to do otherwise.
Yes, government has too many employees and too high of benefits and those must be studied and curtailed. But they are NOT the major thrust of our economical problems. Corruption IS! And to cut societal needs (Medicare, Social Security, police, firemen, et al) and leave pork unscathed is absolutely stupid. But nice for the Fat Cats who would like to see the wealth come their way.
Jack Lohman (Tue Jan 18 09:45:00 2011)
Let's remember one thing here. the debt limit will be raised because there are enough people who know that to do otherwise is disaster. The real question is what hard work will be done to bend the spending curve and the tax curve. Again, look at the Obama commission as a way to do that. How many politicians will cast votes again raising the limit? Plenty , because they know their vote won't count. So they can hide behind the curtain, saying how pure they are when they never had to bear the consequences and they force force others to take the heat. That is cynical cowardice. As far as Pawlenty's idea. Yeah, just make sure the Chinese and other debt holders get paid while the country falls apart physically and socially. Let's just stop Medicare payments so our debt gets paid, real smart. Again, he can make this stuff up all day because he doesn't have any responsibility for it. He can spout on and get the credit. Cynical politics at its worst from a guy that wants to be president.
dave allen (Tue Jan 18 09:58:15 2011)
Ok Jack, fat cats and political contributions aside (I assume you've not received any of those dreaded contributions lately and also assume you're not one of those dreaded elites or fat cats), where would YOU cut spending and by how much?
Jo (Tue Jan 18 10:05:54 2011)
Jack, I do not think this is an orchestrated takeover. That implies that it is thought out and that individuals colluded. It is just simple blind greed and a competition with the neighbors. Most rich people do not think they are rich.
Dean Weichmann (Tue Jan 18 10:20:26 2011)
I'd start by cutting the size of our bloated government -- 20% reduction in departments and employees. I'd whittle the wages and benefits to equal the private sector. And I'd put our politicians on (a) our social security system, (b) our Medicare, the same as the rest of us peons, and (c) I'd put them on a pay-for-performance basis (you know, like they want to do to the teachers).
And I'd get out of all of these damned wars and let them resolve their problems with civil wars, just as we did. Though I'd supply weapons on the condition that they repay us in oil or whatever, if they win. And I'd cut foreign aid (bribes) to countries that skim it off for their corrupt politicians.
And I'd pass stronger banking regulations and even nationalize the next bank that fails, and turn it into a "public option" like North Dakota has (with their 4.3% unemployment).
But none of this is going to happen while our corrupt politicians are being paid to protect the current system.
And no, I'm not one of the Fat Cats. My wife and I operate on about $40K from SSI and investment income. How about you?
Jack Lohman (Tue Jan 18 10:49:47 2011)
You're playing with fire. A default for the hell of it will be economic armageddon. There's a way to do what you want without destroying the global economy in the bargain: have the people you support in the House pass bills that reflect your priorities as part of the normal budget process. This won't happen, as the GOP doesn't care a whit about the deficit or the debt, only about tax cuts for the rich and about scoring political points. They got their tax cuts for the rich, and what you want is quite unpopular.
Anyone who talks about their deficit hawkiness while exempting 80% of federal spending from review is either a fool or a flim-flammer. As for NPR, go ahead and cut the $3 million it receives in federal funding. That would make some difference to the City of Appleton's finances. It won't to the federal government's.
Marcus (Tue Jan 18 10:45:08 2011)
>>>I'd start by cutting the size of our bloated government -- 20% reduction in departments and employees.<<<
How about deciding which teachers and policeman to lay off....
You are falling into the same pattern a all the other "cost cutters" use generalitys... cut something without a real concrete idea of what. What service could you get by without, and would society as a whole be better off?
Dean Weichmann (Tue Jan 18 12:42:45 2011)
Bi-partisan, comprehensive, will get most of the job done. On a national basis Support the Obama commission recommendations. Don't reinvent the wheel.
http://www.fiscalcommission.gov/
dave allen (Tue Jan 18 12:45:46 2011)
Dean, I have said nothing about teachers and policemen, except when defending them. But I AM NOT willing to hide my head in the sand when I know that obvious bloat exists. Frankly, if we don't fix the system we'll need more of the latter and fewer of the former.
Jack Lohman (Tue Jan 18 13:10:19 2011)
Jack, I don't want to hassle you, I have great respect for your point of veiw, but could you say specifically where you think "bloat" is and cuts could be made?
For my part, cutting the war spending and military in general. Miltary hardware especially.
A small tax on stock trades would help to reduce speculation and automated trading, apply that toward debt. A carbon tax would help reduce pollution, waste, and cut imported fuel, and could be applied to SS and Medicare.
Dean Weichmann (Tue Jan 18 16:59:30 2011)
Dean, I can't tell you specifically where the bloat is, but let's start with Bell California. (No, I know that's not fair; it's an outlier.)
But we know bloat when we see it and we have no excuse to protect it. It harms us when we do. But I would say that bloat in government represents only 10% of our total economic problem. But it has become an effective diversionary tool for the right.
Mainly our problem is all of the government giveaways to the corporate interests that fund the elections, and that's why my number one issue is political corruption. Get rid of that and we can start to heal.
Jack Lohman (Tue Jan 18 17:35:23 2011)
And Dean, let me add this... when bloat does not exist we know that too. But an independent analysis will get us the answers.
I agree 100% on the small tax on stock trades, though I oppose a carbon tax unless it is world wide. We need jobs, and a carbon tax only on US manufacturers will send them scrambling.
Jack Lohman (Tue Jan 18 18:14:07 2011)
Jack that would be true if nothing was done to even the playing field. Tariffs on imports and export subsudies if other countries do not follow suit. I would expect that with leadership in this area most other countries would. Fact is most of the world is far more aware of global warming and diminishing fuel supplies.
Dean Weichmann (Tue Jan 18 20:05:30 2011)
Yea, I know, but I get nervous about tariffs. I support them but hear bad things about how they affected our economy the last time we tried that. Also on climate change see this short video...
Jack Lohman (Tue Jan 18 20:35:27 2011)
Wow, that is impressive. Depressing too. Your comment sort of suggested that you were a sceptic...I guess not.
>>>hear bad things about how they affected our economy the last time we tried that<<<
Are you refering to Smoot-Hawley?
I seem to remember that it was blamed for a round of protectionism that preceeded the Great Depression. I also remember that blame being debunked. I will try to find it.
Dean Weichmann (Tue Jan 18 21:16:09 2011)
Jack, here is one,
http://www.economist.com/node/12798595
In fact, few economists think the Smoot-Hawley tariff (as it is most often known) was one of the principal causes of the Depression. Worse mistakes were made, largely out of a misplaced faith in the gold standard and balanced budgets. America’s tariffs were already high, and some other countries were already increasing their own.
Dean Weichmann (Tue Jan 18 21:25:18 2011)
I've never been a skeptic on climate change, Dean, but I have been pissed that my politicians have been taking cash bribes from both sides and have therefore been moot on correcting the problem (if it is a problem).
And thanks for tracking down the Economist piece. I also googled "Smoot-Hawley krugman" and found some interesting pieces. But here again, if my politician wasn't corrupt we'd get the right answer and move forward.
Clearly tariffs are regressive, but maybe that's what we need at the moment.
Jack Lohman (Wed Jan 19 02:31:57 2011)
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