by | ARTICLES
Today marks 84 years since the Great Stock Market Crash of 1929, also known as Black Tuesday. This typically is considered the beginning event of the Great Depression that lasted some 10 years in the United States.
The crash itself did not cause the Depression, but rather it was an overcorrection of a stock market that was too high and too inflationary. The 1920s was a period of good and strong economic gain, but with an abundance of speculating market traders, it became unstable.
The real problem that followed was deflation. That was joined with credit problems, monetary problems, and a decrease in international trade. Additionally, Both Hoover and FDR intervened to help the economy back on track. The effects of those interventions have been hotly debated.
Many of Hoover’s policies — meant to be aid recover — did not help as intended. Smoot-Hawley comes to mind. So does his tax increases when many could least afford them.
The election of FDR took things to a whole new level. FDR’s New Deal vastly expanded the size and scope of government with relief and regulatory agencies. Some projects, such as the Civilian Conservation Corps, remain hallmarks of improvement during a bleak age. Others, such as the National Recovery Administration, contributed to the prolonging of the Depression.
The National Recovery Administration in particular slowed growth in the business sector. Many were reluctant to hire employees because prices were fixed and capital was scarce. But the crushing blow was dealt with FDR’s “undistributed profits tax”.
This tax which introduced in 1936, was considered a revenue raiser for the New Deal. In reality it was merely a tool intended to extract money from businesses and into the economy. Businesses now had to distribute their profits in either wages or dividends rather than savings or investment. This directly impeded a business’s ability to save capital or reinvest profits back into the business, which crippled small businesses in particular.
The tax was such an economic failure that it was reduced by 1938 and repealed a year later. But the Depression went into its bleakest hour at that time in 1937.
Deep and far-reaching government intervention combined with unbridled spending programs throughout the 1930s by FDR prolonged rather than helped the economy to recover from the Great Depression. And today five years after the mini-market crash of 2008, there are definitely parallels of the policies of that era — and our recovery is certainly sluggish at best. Remembering Black Tuesday and the era afterwards serves as a reminder that runaway spending and expanded government aren’t always the medicine needed for a better economy.
by | BLOG, POLITICS
What a year it has been since Hurricane Sandy hit the US on October 28-30, 2012. The size and scope of Superstorm Sandy is a perfect analogy of the the fiscal ineptitude that has churned up in Congress over the last year.
Nearly three months after the Hurricane, the Sandy Relief bill was passed. It almost didn’t make it in Congress at all, having been caught up in the “Fiscal Cliff” crisis of January 1, 2013. No one denied that those citizens who were affected by the catastrophic and legendary storm deserved help. However, the bill was mired down by pork and Congressional dysfunction.
Only three weeks after the fiscal cliff deal that raised taxes on the highest income earners, Congress managed to figure out how to fritter away a year’s worth of that revenue that was raised (after many months of wrangling and negotiations, mind you). By raising the tax rates on the wealthiest citizens, which was a longtime objective of Obama’s, here was finally something tangible to soak the rich so the the rich could “pay their fair share” This, we were told, was absolutely necessary to raise revenue because of our deficit. The tax increase was to provide the government with $600 Billion in revenue over ten years (roughly $60 billion each year).
But when Congress finally got its hands on Sandy Relief, a bill with good intentions, they created a half-pork barrel spending/half-relief spending measure. Once the Mulvaney amendment failed, a $17 billion Hurricane Sandy relief bill with a 1.63 percent cut to discretionary programs, the final version of Sandy Relief metastasized into the monstrosity passed. It was spending spree bill that was not offset by equal and opposite cuts. It fully added $50.5 Billion dollars to the deficit — three weeks after the tax hike on the rich for the purpose of deficit reduction.
The stinging part of the Sandy Relief Bill was that it wasn’t all hurricane relief. Also included were items such as $10 million for FBI salaries, $2 billion for road construction across the country, as well as funding for the Head Start program and roof repairs at the Smithsonian. Such items did not belong in the Sandy Relief Bill. Only about a third was actually for relief: $17 billion was for aid, while another $33 billion was for “other”
This has nothing to do with whether the non-Sandy provisions of the bill were worthwhile or not. But there is no reason why those extra provisions shouldn’t be dealt with on the same playing field as all the other potentially important uses of our federal tax dollars. Why did these particular spending measure bypass the intense oversight and scrutiny that every expenditure in the budget requires of our legislators so that we don’t overspend our revenue? Herein lies a neverending problem.
At the end of the day, the tax hike on the rich was almost entirely wiped out by the Sandy Bill. By voting up the $50.5 Billion in “aid” that was crafted, (and if you combine that amount with the $9 billion for the National Flood Insurance Program also approved in January 2013), Congress spent the entire sum of a year’s worth of revenue from the rich’s “fair share” — with most of it going to fund more government instead of reducing the deficit — in one fell swoop.
Here we are a year later. The AP reported this week citizens impacted by Sandy have had a lot of waiting to do with very little to show for it in New York City. “Because the federal government has only released the first tranche — about $700 million — of the roughly $60 billion package of storm recovery aid approved by Congress, city officials say they still don’t know how much money they’ll be able to distribute to storm victims”.
And more: “About 24,000 families have signed up for the city’s Build-It-Back program, which will help pay for repairs, elevate their homes and reimburse them for repairs that have already completed, among other things. But many still haven’t received any money nearly a year after the storm“.
How can this be? How is it that Congress has only released $700 million so far? The $17 billion “aid” part of the Sandy Relief bill included the following:
$5.4 billion for FEMA to provide immediate relief to families and pay for temporary housing, debris removal and crisis counseling.
$5.4 billion went to major transportation agencies in New York and New Jersey
$3.9 billion to repair damages to publicly owned hospitals, roads and utilities
$1.35 billion to the Army Corps of Engineers
$287 million for national parks
$235 million for veteran facilities
$32 million for Amtrak
$6 million to replenish and stock food banks and soup kitchens.
It is gross incompetence that supposedly only $700 million of a $50 billion aid package — 1.2% — has been released by Congress. Where are the funds? And what about the non-aid parts of the bill? The $33 billion in pork? Have those funds been distributed?
Equally disturbing is the revelation this week that the very company responsible for the disasterous Obamacare website (CGI Federal Inc.) also received funds to distribute for Sandy Relief. According to the Daily Caller, CGI “assisting the U.S. Department of Housing and Urban Development (HUD) in the distribution of $1.7 billion in relief for Hurricane Sandy”. This was verified by a memo obtained by Freedom Works. Notes of the minutes of the memo record that
Mr. Nelson presented that the State received a $1.7 billion allocation in CDBG Disaster Recovery aid from HUD to aid impacted businesses and residences. He stated that the State’s Action Plan was approved on April 26, 2013 and HTFC is currently in a phase of implementing the program. He stated that in this phase, the corporation needs to stand-up its recovery programs as soon as possible to deliver critical resources, and in order to do so, the corporation requires immediate access to consultant services to assist in policy and procedure development, training, surge capacity, and call center assistance, and stated that CGI Federal Inc. could provide such services.
Mr. Nelson stated that the corporation entered into a short term contract with CGI, Federal Inc. on a discretionary basis of $49,000 to start with these critical disaster recovery efforts, and he requested that the Board approve a contract with CGI Federal Inc., procured on an emergency basis as justified under Executive Order 63, for an amount up to $4,280,000 for a term through March 31, 2016.
The company that charged the federal government more than $600 million to build a website that has failed miserably is the very same company that received a contract for another $4 + million through 2016 to help distribute Sandy aid, a task at which it has also failed miserably.
One year after Superstorm Sandy, we can clearly see the failings of Congress in its fiduciary responsibility.
It approved tax hikes on the wealthy under the guise of deficit reduction — $60B a year for 10 years
It approved as a relief bill nearly the same amount that was to be raised by the tax hikes — a bill that was 2/3 pork and only 1/3 relief — that increased government spending
It has only released 1.2% ($700 million) of the $50+ billion in aid
It contracted enormous sums of federal tax dollars with CGI, a company that is being paid 1) to assist with distributing nearly $2 billion in aid and 2) is the chief architect behind the Obamacare website abomination
And yet, just a few days ago, Senate Majority Leader Harry Reid gave a radio interview in which he spelled out the next phase of budget negotiation, where he once again calls for more taxes:
“The only people who feel there shouldn’t be more coming in to the federal government from the rich people are the Republicans in the Congress. “Everybody else, including the rich people, are willing to pay more. They want to pay more.”
He also went on to announce that the only way there could be some sort of Congressional “grand bargain” would be under the conditions that the Republicans would have to agree to more tax revenue:
“They have their mind set on doing nothing, nothing more on revenue, and until they get off that kick, there’s not going to be a grand bargain on — there’s not going to be a small bargain,” Reid said. “We’re just going to have to do something to work our way through sequestration.”
William Pitt the Younger sagely observed that “Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.” We constantly hear how the government needs more money . After a year of particularly gross fiscal mismanagement in Congress — from Hurricane Sandy to the Fiscal Cliff to Sequestration to the government shutdown to Healthcare.gov the Democrats still have the gall to sound the call for more taxes.
The trillion dollar question then becomes: What Will Republicans Do?
by | ARTICLES, BLOG, ECONOMY, OBAMA, POLITICS
In case you missed it, Harry Reid displayed the most incredible mind reading skills this past week during an interview on Nevada Public Radio.
As reported by Roll Call, the Senate Majority Leader explained that, “The only people who feel there shouldn’t be more coming in to the federal government from the rich people are the Republicans in the Congress,” He went on to declare that “Everybody else, including the rich people, are willing to pay more. They want to pay more.”
He also went on to announce that the only way there could be some sort of Congressional “grand bargain” would be under the conditions that the Republicans would have to agree to more tax revenue:
“They have their mind set on doing nothing, nothing more on revenue, and until they get off that kick, there’s not going to be a grand bargain on — there’s not going to be a small bargain,” Reid said. “We’re just going to have to do something to work our way through sequestration.”
For those who are short on memory, the Republicans agreed to tax increases on the wealthy immediately after we went over the “Fiscal Cliff” last January. Obama did not get his $250K threshold to raise taxes to 39.6% for “upper earners”, but he did get a $400K single/$450K married couple threshold. January 1, 2013 was the original sequestration deadline. With the Fiscal Cliff deal, the sequestration decision was booted again for two months.
Fast forward to the end of February with sequestration talks and the March 1 deadline looming. The White House and liberal media began discussing in earnest the possiblity of more taxes, especially after it was pointed out by Bob Woodward that sequestration did indeed originate with Obama.
After the Republicans didn’t blink on sequestration and the cuts went into play, Investors Daily revealed on March 1 that Obama’s “sequestration” plan was $1 Trillion in new revenue. That was followed up by Pelosi’s announcement that same afternoon that there would be “no sequestration deal without new taxes”. But sequestration stayed, much to the chagrin of the Democrats.
Here we are now, post-government shutdown. Obamacare is failing badly. Obamacare was supposed to be a source of revenue for the government over 10 years with its myriad of taxes — except that no one is signing up. The Democrats look bad, and the Congressional Dems are warming to the idea of a one-year delay, the very thing that many Republicans have been calling for ad nauseum.
What is Harry Reid to do? Why, talk about sequestration, of course. Let’s talk about how billions in cuts have been made to the government because the Republicans have “refused to compromise”. Let’s put the blame game back on them and off of the Democrats who voted hook, line, and sinker for Obamacare. Let’s stir the pot and talk about how tough sequestration is for everyone. Ergo, we need to fix the government budget with more revenue.
Pay attention folks. The Democrats are frustrated because of Obamacare right now. In the coming weeks, we’ll see renewed energetic playbook buzzwords talks of a “balanced approach”, a “compromise”, and a “grand bargain” approach to budget discussions…except that the only approach from the Democrats will be a firm call and firm stand for more revenue via tax increases.
Leviathan is wounded. And hungry. And he’s coming for your wallets.
by | ARTICLES, OBAMA, OBAMACARE
As each day passes, the various facets of Obamacare are getting implemented in order to be fully operational by January 1, 2014. But we are hearing about the difficulties in the implementation caused primarily by either 1) the website fiasco; 2) low number of enrollees; and 3) people wanting to pay the penalties in order to avoid having to pay for intentionally overpriced health “insurance”.
In order to achieve adequate and targeted enrollment in Obamacare those representing the Government have begun to be aggressive. They are choosing to use all methods at their disposal to pressure, cajole, and otherwise push people to “do the right thing” and buy the mandated insurance product. This began in earnest last spring, as the Health and Human Services Secretary Kathleen Sebelius was given millions at her disposal to dispatch “navigators” and “in-person assisters” to help enroll more Americans into Obamacare. But the very act of doing so may be rendering Obamacare unconstitutional.
It is worthwhile to remember that the only way in which the law of Obamacare was saved from being declared unconstitutional was the that that there is no penalty associated with Obamacare, which would have made it subject to the Commerce Clause. It was ruled to be a “tax” derived from not purchasing the mandated health coverage. In reaching his conclusion, Justice Roberts accepted the Administration’s argued position that there is absolutely no negative interference whatsoever on anyone opting to pay the “tax” rather than buy the product.
Therefore, any attempt by the administration or any of the implementing bodies to pressure, threaten or even imply some sort of wrongdoing by those choosing to not buy insurance would be clearly unconstitutional.
If those implementing Obamacare are properly following the Supreme Court’s mandate, they should be telling prospective insurance purchasers that they should be deciding for themselves whether they would be better off with the insurance or the penalty. We know this is not happening. At the macro level, governors have been hustled to implement the exchanges in their states. And at the individual level, Obamacare officials are pushing for more enrollees to ensure a steady flow of premiums paid by healthy patients in order to cover those who are high-risk and high-cost.
Just a few recent examples:
1) The LGBT Community created an Out2Enroll campaign to encourage LGBT to enroll in Obamacare after “the Obama administration called a meeting of LGBT leaders in mid-September. Nearly 200 from across the country met with the White House to talk about the potential impact of Obamacare. It also looked at what LGBT leaders could do to spread the word.”
2) Latinos with green cards were pushed to enroll in Obamacare at a recent forum marketed on the Get Covered America website. “Get Covered America is the nonprofit publicity and recruitment arm of “Enroll America,” which aims to ‘maximize the number of uninsured Americans who enroll in health coverage made available by the Affordable Care Act,’ according to its website”. Enroll America also has people going door-to-door with clipboards to sign people up, according to the Washington Post.
3) Hollywood celebrities teamed up with the White House to learn how to help shill for Obamacare. “Back in July, a group of Hollywood stars gathered at the White House to strategize a push for registration after the October 1 rollout of the Affordable Care Act. Among others, Amy Poehler, Jennifer Hudson, Kal Penn, and representatives for Oprah Winfrey, Alicia Keys, and the Funny or Die team offered their influence during a meeting with senior aide Valerie Jarrett and, briefly, President Obama himself”.
4) Government-funded Navigator Grants are setting up neighborhood centers for Obamacare enrollment. According to this story about a center with ties to former ACORN execs, “The government has given out $67 million in Navigator grants to help with the controversial rollout of ObamaCare. It was not clear if Local 100 got a grant of its own, but it has set up a help center with Southern United Neighborhoods, a charity founded in March 2010 with many former ACORN members, to enroll people in ObamaCare. Southern United Neighborhoods received a Navigator grant of $486,123”
5) The White House kicked off a 6 month ad campaign a week before the October 1 starting sign-up date. The objective of the ad blitz is “to encourage millions of Americans to sign up for health coverage under ‘Obamacare’ an effort in which the president and other political celebrities promote the law’s promise of subsidized health coverage”.
Are these government-backed and/or funded pushes to enroll in Obamacare violating the constitutionality of Obamacare with regard to negative interference?
The SCOTUS ruling hinged on the government not implying that people are doing anything wrong by not signing up. It is a tax that citizens are allowed to pay in lieu of enrollment. But with such a massive effort touting Obamacare, the government is directly interfering in the choice. There is no neutrality. It amounts to coercion, and creates the implication that by not enrolling, citizens are doing a bad thing. Does this contradict the Supreme Court decision?
by | ARTICLES, BLOG, BUSINESS, ECONOMY, GOVERNMENT, HYPOCRISY
Right before the government shutdown, Detroit received a pledge for a $320 million federal “aid package”. The Obama Administration wants to make it perfectly clear: this is not a bailout. That word is too toxic during this time of fiscal instability in Washington. This is relief. A stimulus. It is a hand-up, not a hand-out, and, as the NY Times reports, this will not be the only federal infusion that Detroit receives to get back on its feet.
Some questions immediately come to mind:
1) Various news agencies reported that the funds are being scraped together mainly from agencies such as TARP, FEMA, Homeland Security, and HUD. Who authorized this aid package?
2) Much of the funds are for projects that are similar to projects already funded by alternative sources, such as the Ford, Kresge, and Knight Foundations. The funds will not be used in anyway with regard to debt structuring. Why are federal funds duplicating projects already in motion?
3) Detroit already receives 71 federal grants for operation and it still couldn’t manage to avoid bankruptcy. Clearly, Detroit has been malfunctioning for years even with government intervention, so Why are we propping up this city even more?
4) What is to prevent other cities who are struggling financially for reasons to call for aid? After the aid to Detroit was announced, at least one Congressman, Jerry McNerney, went on the offensive. He wrote to the White House asking why aid was not extended to Stockton, California, a city which declared bankruptcy last year, “and suffers from many of the same problems as Detroit”. Will this type of federal aid package for cities become a slippery slope? Will it be a pick-and-chose/reward scenario? How about a carrot dangled to cities?
A recent WSJ article on the aid noted that with federal money comes strings. “Grants from the Transportation and Housing and Urban Development Departments will require the city to pay prevailing union wages, which will jack up costs. Prevailing wage is an economic compensation theory that requires municipalities to pay more-than-market wages. The end result of paying prevailing wages means that Detroit will get less with their our money. Even now, prevailing wage theory is hotly contested in NYC, a form of unionism for those workers who are non-unionized. Isn’t this type of overpayment what helped get Detroit into the mess it is in in the first place?
Furthermore, this cash fund may impact pension reforms that city manager Kevyn Orr is trying to accomplish. The pension managers insist that pensions are only underfunded by $634 million, while Orr is arguing closer to $3 billion. Part of pension restructuring and cost savings proposed by Orr were expected to be re-diverted toward blight abatement. With the arrival of this federal aid package — much of which is supposedly for the blight problem — you can expect that pensioners will argue that their pensions do not need, or need less of, the chopping block. That is a pity, as it undermines real pension reform so badly needed in Detroit.
What Kevyn Orr really needs to do to forge a path of prosperity in Detroit is to completely fund the pension system according to what the pension managers say they need ($634 million vs $3 billion), in exchange for complete government removal from the pension system; Impose a switch from a defined benefit model to a defined contribution model and be done with it. Let the pension heads grapple and manage their own funds now. Such a bold fiscal move would give Detriot a much more solid path to economic revitalization than any aid package can do.
There was no emergency that necessitated the use of federal funds being injected into the city of Detroit. No Katrina. No Sandy — only decades of fiscal irresponsibility, corruption, mismanagement. This “non-bailout” only undermines the task of this city, and potentially others, to make hard decisions about money, taxes, pensions, and budgets. It is a band-aid where a tourniquet (or maybe an amputation?) is needed. In a city rife with every kind of unimaginable fiduciary irresponsibility, the idea that the city of Detroit should be entitled to receive any more federal tax dollars is wholeheartedly repugnant.
by | BLOG
Treasurydirect.gov has a feature called, “The Debt to the Penny and Who Holds It”. It is a government website, typically dealing with items such as savings bonds, and is separate from Treasury.gov. It shows some interesting data regarding the current debt:
Current Debt
10/15/2013
Held by the Public
11,926,495,975,191.95
Intragovernmental Holdings
4,820,874,558,898.67
Total Public Debt Outstanding
16,747,370,534,090.62
Here we see that this history feature shows a public debt number that is different from the US Treasury daily reports (which haven’t moved in 150 days) The current amount of total public debt outstanding is a sum higher than the Statutory Debt Limit of $16,699,421,000,000.
Just to make sure that the history feature worked, I did a search from October 14, 2013 – October 15, 2013. It gave these results:
10/11/2013
16,747,411,584,091.53
10/15/2013
16,747,370,534,090.62
The search feature does work, and even shows the increased change from the two days.
To make sure the definitions were correct, TreasuryDirect.gov offers the following explanations:
What’s the difference between the Public Debt Outstanding and the Public Debt Subject to Limit?
The Public Debt Outstanding represents the face amount or principal amount of marketable and non-marketable securities currently outstanding. The Public Debt Subject to Limit is the maximum amount of money the Government is allowed to borrow without receiving additional authority from Congress. Furthermore, the Public Debt Subject to Limit is the Public Debt Outstanding adjusted for Unamortized Discount on Treasury Bills and Zero Coupon Treasury Bonds, Miscellaneous debt (very old debt), Debt held by the Federal Financing Bank and Guaranteed Debt.
So, we have a Public Debt Outstanding that is higher than the current Statutory Limit because it is “adjusted”?
At the same time, our Public Debt Subject to Limit has remained frozen at $25 million under the Debt Ceiling for 152 days.
Why can numbers be adjusted and frozen willy-nilly, so that taxpayers — who fund the government(!) — can’t get a true picture of their money? What numbers are true anymore? What numbers do Congress have to work with while they strut and fret their hour upon the stage over the “debt ceiling”? We the People have none.
by | BLOG
Monday, October 14, 2013 marks 150 days since the Treasury Department’s listing of public debt has not moved. The most current Daily Treasury report (October 10) shows “Total Public Debt Subject to Limit $ 16,699,396,000,000; Statutory Debt Limit $16,699,421,000,000.”
The record for these two entries has remained unchanged since May 17, 2013, the first time it recorded the public debt at $16,699,396,000,000.
Why is this important?
The Treasury reports show that the public debt has stayed at just about $25 million under the statutory legal limit ($16,699,421,095,673.60). However, a review of monthly budget reports created by the Congressional Budget Office (CBO), indicate something else is going on. These CBO reports list the receipts and outlays for each month. They continue to show deficits each month since May 17th, while the records of the Treasury do not show that the deficits have affected the federal debt in any way.
The total amount of deficit accrued in June, July, and August total $127 billion. The report for September, typically published in the beginning of the succeeding month — in this case, October — was not available. The CBO reported, “Because a lapse in appropriated funds has caused CBO to largely shut down its operations, the Monthly Budget Review, which ordinarily would be issued this morning, will not be published today or during the duration of the government shutdown”. We can safely assume it would show a deficit for September.
Despite the rising deficit, the Treasury reports no change in federal debt. What is going on?
Back to May 17th. Jack Lew, the Secretary of the Treasury, penned a letter to John Boehner, Speaker of the House. The letter notes,
As provided by Public Law 113-3, the statutory debt limit was suspended by Congress through May 18, 2013. Because Congress has not yet acted to approve normal borrowing authority after May 18, the Treasury Department will begin implementing the standard set of extraordinary measures that enable us, on a temporary basis, to protect the full faith and credit of the United States by continuing to pay the nation’S bills. These measures are the same ones that have been used in previous debt limit impasses, and are described in detail in an appendix to this letter.
The appendix describes four particular measures that would free up money:
(1) suspending sales of State and Local Government Series Treasury securities;
(2) redeeming existing, and suspending new, investments of the Civil Service Retirement and Disability Fund and the Postal Service Retirees Health Benefit Fund;
(3) suspending reinvestment of the Government Securities Investment Fund; and
(4) suspending reinvestment of the Exchange Stabilization Fund
These four actions were calculated by Lew to “free up approximately $260 billion in headroom”.
The current date for hitting the debt ceiling is sometime between October 17 – November 1, according to recent testimony by Jack Lew to Congress on October 10. Lew described catastrophic consequences for its obligations, citing possible interruption of benefits to Social Security, Medicare, military and veterans among others. However, Lew refused to entertain the possibility of prioritizing payments.. He warned, “If Congress does not act and the United States suddenly cannot pay its bills, the repercussions would be serious”.
In contrast, a memo from Moody’s Investment Service dated October 7, three days prior to Lew’s testimony, painted a different story. Moody’s opined that, ”We believe the government would continue to pay interest and principal on its debt even in the event that the debt limit is not raised, leaving its creditworthiness intact,”. It went on to say that, “The debt limit restricts government expenditures to the amount of its incoming revenues; it does not prohibit the government from servicing its debt. There is no direct connection between the debt limit (actually the exhaustion of the Treasury’s extraordinary measures to raise funds) and a default”.
National Review Online noted that the Treasury department did not respond for comment on Moody’s memo.
Lew has supposedly already gone through the extraordinary measures of $260 billion worth of transaction-suspending these last five months, which might explain how the Treasury reports show no change in debt, leaving a tiny legal limit cushion of $25 million. At some point, those transactions suspensions will have to be made up, along with continuing to pay on our obligations.
In other words, the Administration is currently picking and choosing what parts of government to fund. But isn’t that exactly what Obama is lambasting the Republicans for — offering a budget that suspends the funding of something (Obamacare), an action that is perfectly within their constitutional right to do?
In fact, suspending the funding of Obamacare for a year will have the same fiscal impact as Lew’s current actions: freeing up money. The CBO estimates that it will give us “headroom” of $35 billion over 10 years.
Why does Jack Lew get to decide what parts of government get funded or not funded but the House of Representatives does not?
A interesting thing to note about Lew’s testimony is that, besides rejecting the possibility of prioritizing payments, Lew also declined to be specific about 1) the amount to which Obama wanted the ceiling to be raised and 2) the length of time, i.e. the next deadline. The open-endedness of the position of Obama’s Administration regarding the debt ceiling should raise some red flags for those who are leery of raising it.
Thomas Jefferson wisely observed, “I place economy among the first and most important of republican virtues, and public debt as the greatest of the dangers to be feared”.
For those who are worried about our public debt, have no fear! The Treasury Department’s FAQ’s already have a solution. Did you know:
“There are two ways for you to make a contribution to reduce the debt:
You can make a contribution online either by credit card, checking or savings account at Pay.gov
You can write a check payable to the Bureau of the Public Debt, and in the memo section, notate that it’s a Gift to reduce the Debt Held by the Public. Mail your check to:
Attn Dept G
Bureau of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188”
Despite our government shutdown, pay.gov is still up and running, and is happy to accept your money.
(And the 16 trillion dollar question is — if one makes a contribution, will the Treasury department reports show it?)
by | ARTICLES, ECONOMY
The tactics that the Democrats used in 2012 regarding the Bush tax cuts is the same strategy being deployed by the Republicans in 2013 and Obamacare. Yet this time around, the Republicans are getting vilified for it.
Let’s get this straight. In 2012, the Republicans wanted to permanently extend the “Bush tax cuts” for all. These cuts had been temporarily put in place in 2001 and 2003 and were renewed in Congress in 2010, making it the “law of the land” for roughly ten years.
However, the Democrats refused to have consider an across-the-board clean tax cut for all. Instead, they insisted on an exception. They demanded that Congress raise the rates on the high incomes earners by letting the tax cuts expire for them, and pushed for only extending the cuts on the lower earners. Their rationale? A revenue raiser. (Those high earners need to “pay their fair share”).
Then, the Democrats argued that if the Republicans did not agree to their request, all the tax cuts would lapse and it would be the Republicans who would be responsible for also raising the rates on the other 99%.
Fadst forward to late September 2013. The shoe is on the other foot and the Republicans make a demand about a law that has yet to go into effect (vs the decade-old tax cuts), using the same methodology as the Democrats did less than a year ago. And now the Republicans are the bad guys for insisting on a delay for one year on the healthcare law for which 100% are affected.
Now that the government is shut down, the Republicans are offering clean CRs areas by area. Yet the Democrats are refusing every bill. They insist that it be a Clean CR for everything — the same way the Republicans were lambasted for insisting that the tax cuts should be made cleanly and permanently for everyone.
What’s worse, the same argument that the Democrats made about raising the rates on the 1% (to raise revenue) is the exact same effect that a one-year Obamacare delay could give our economy. It has been estimated by the CBO the CBO that such a delay would have saved $35 billion in over ten years. How is this not a good thing this time around? Folks, a double standard is in effect.
Isn’t this current shutdown the epitome of hypocrisy? The Democrats insisted on shutting down the government to prove it could run healthcare. And they did so on the backs of you and me. The Republicans need to continue to follow the Democrat’s example and resolve in 2012 and hold their ground on this monumental issue.
