Breaking: S & P To Downgrade US

From Jake Tapper:

A government official tells ABC News that the federal government is expecting and preparing for bond rating agency Standard & Poor’s to downgrade the rating of US debt from its current AAA value.

Officials reasons given will be the political confusion surrounding the process of raising the debt ceiling, and lack of confidence that the political system will be able to agree to more deficit reduction. A source says Republicans saying that they refuse to accept any tax increases as part of a larger deal will be part of the reason cited. [Emphasis mine]

No, because a bipartisan budget was passed which was crap. Not because the Republicans (at least the Tea Party faction) wanted real cuts in spending. Not projected cuts in future spending 10 years down the road where no other Congress is bound to make those cuts.

This at CNBC:

U.S. government officials are bracing for the rating agency Standard & Poor’s to downgrade the country’s credit as early as this evening, according to someone familiar with the matter.

Throughout Friday, markets were rife with speculation that S&P, which has had a negative outlook on the U.S. since April 18, would downgrade the country’s credit from its current triple-A level.

On July 14, S&P put the government on a credit watch with negative implications, meaning there was at least a one in two chance the U.S.’s long-term debt would be downgraded within 90 days.

Thanks to Jason for the last link.

Is Boehner's Plan The Best We Can Do?

let's examine the history here. Cut, Cap and Balance is dead. Ryan's plan is dead. Boehner's plan will be DOA.

The CBO scored the plan light on cuts in the front end and heavy on the back end. In the ten year time span where it won't matter anyway. Because all of those other ten year, eleven year, twelve year plans in the past have been so successful in cutting the existing deficit. Oh, right.

Regardless of who leaves the bargaining table first, the Republicans are going to get the blame. More specifically, the Tea Party Republicans.

Ideally, I would like to see variations of the CCB bill passed and sent to the Senate. Make the Senate Dems "the party of No" for once. But that would depend on the Republican leadership being able to put forth a coherent narrative and a spine. So no dice.

It's going to come down to a game of chicken. I honestly believe that Obama doesn't care if the Nation defaults on it's debt or not. Boehner does so he'll cave first and give Obama what they want. A budget with lots of democrat input. In which case the TP Republicans in the House won't be necessary for passage.

This is the hill to stand on. Not next year because it will always be 'next year, we'll fight'.

This is the game they seem to play:

• The Republicans have the House but they can't do anything over fear of not gaining the Senate.
• If they win the Senate they can't do anything over fear of losing the Presidency.
• If they have both houses of Congress and the White House, they can't do anything at all because then they might loose it all.

This is the hill to fight on but it's also prudent to prepare for the worst. Downgrading of the US's credit rating which will affect interest rates, mutual funds and inflation will kick in. Not because of the Tea Party Republicans but because the Senate will accept nothing else but a blank check from the House. But somehow it's the TP Republican's fault for not partisapating in Kabuki Theater.

Back to the Speaker's budget. It's dead. Robert Stacy has this about it:

Of course, any bill acceptable to 218 House Republicans may be impossible to get approved by Harry Reid’s Democrat majority in the Senate.

So why is there the white hot heat for the TP Republicans that John McCain demonstrated? I'm sick and tired of conservatives being the scapegoat of very thing bad to the point where backstabbing bastards like John McCain feels the need to give out Democrat talking points.

The only thing I can think of is because they are voting the way they said they would vote. To cut spending. The Speaker's plan seems to indicate the 'business as usual' that Congress always does instead of actual cuts. Business as usual is what got the Republican party almost beaten to obscurity. It was, in large part, the Tea Parties that got the Republicans back to where they are today. Boehner needs to be kissing their toes not telling them to get back in line.

It's simplistic but the Republicans don't want a default on the Nation's credit rating but Obama has signaled time and time again he's not going to work with any Republican unless they agree with him. Going back to, "I won". It's not going to change now. And somehow this is the TP Republican's fault.

Behind The Budget 'Cuts'

From Weasel Zippers and the Politico:

On the eve of a House vote, new cost estimates from the Congressional Budget Office could pose a problem for Speaker John Boehner as he tries to rally conservative support for his two-step plan to raise the federal debt ceiling and avert default next week.

The first installment of $900 billion is contingent on enacting 10 year caps on annual appropriations which the leadership had hoped would save well over $1 trillion. But CBO late Tuesday came back with a report showing the legislation would reduce deficits by $850 billion when measured against the agency’s most current projections for spending.

At one level, Boehner is the victim of his own success, since that same baseline is $122 billion lower in direct spending because of concessions the speaker won in the April government shutdown fight. But that won’t help him much with restless conservatives and this could force him now to readjust the bill with tighter caps to meet his goals.

And as with most ten year budgets, is meaningless after the next election.

Secondly, it's not even a cut but a reduction in proposed spending. That's saying that I'm going to McDonalds for a Quarter Pounder but settling for a plain cheeseburger. When everyone else is saying I need to PB & J it at home.

To Bring You Up To Date About The Debt Crisis

I don't like using the word, 'Crisis' because the debt problem was too obvious for too long to too many. 'Crisis' are buzzwords many politicians like to use in order to pass things they normally can't during normal times.

But the people who caused the crisis are trying to fix it. Which in any other scenario would appropriate except this is the US Congress.

Anyway, Big Government has this to bring you up to speed on the issue:

f you have been getting information from the mainstream media you may think tea partiers are forcing Republicans in Congress to; cut the budget so much people will be forced to push grandma’s wheelchair off a cliff or, are trying force the country into default guaranteeing Obama won’t be reelected.

Not true! It’s all about not having too many mouths to feed.

The debt ceiling’s the congressionally approved amount the federal government can borrow. The ceiling is currently set at $14.294 trillion. The country’s debt hit that figure on May 16 and we are currently approaching $14.6 trillion in debt. Thanks to some “re-arranging,” the Treasury Department says we won’t “run out of money” until August 2.
[. . .]
Our debt problem has been kicked down the road by both parties for too long, if not fixed soon according to the CBO; there will be “too many mouths to feed.”

The debt has become a big issue, not solely to the tea party but for the mainstream voting public.

Video: This Is How John Boehner And Eric Cantor Should Handle Barack "Call My Bluff" Obama With The Continuing Resolutions

They should but they won't.

Walter Williams On The "Tax The Rich" Meme

I touched on it here last night, Walter E. Williams takes it on so much better than I ever could because, well, he's Walter E. Williams:

This year, Congress will spend $3.7 trillion dollars. That turns out to be about $10 billion per day. Can we prey upon the rich to cough up the money?

According to IRS statistics, roughly 2% of U.S. households have an income of $250,000 and above. By the way, $250,000 per year hardly qualifies one as being rich. It's not even yacht and Learjet money.

All told, households earning $250,000 and above account for 25%, or $1.97 trillion, of the nearly $8 trillion of total household income. If Congress imposed a 100% tax, taking all earnings above $250,000 per year, it would yield the princely sum of $1.4 trillion. That would keep the government running for 141 days, but there's a problem because there are 224 more days left in the year.
[. . .]
According to the Forbes 400, America has 400 billionaires with a combined net worth of $1.3 trillion. Congress could confiscate their stocks and bonds, and force them to sell their businesses, yachts, airplanes, mansions and jewelry. The problem is that after fleecing the rich of their income and net worth, and the Fortune 500 corporations of their profits, it would only get us to mid-August.

The fact of the matter is there are not enough rich people to come anywhere close to satisfying Congress' voracious spending appetite. They're going to have to go after the non-rich.

Be sure to read the entire thing.

I'm pretty sure this happens to most people but when I was a kid, whenever I would happen upon an extra buck or two, it would usually be spent 5 different ways in my mind. Usually before I got a block away from my house on the way to the corner store.

Same thing with Congress. Increasing revenues only allow more spending when more spending is what is not needed.

I Don't Look At This MoveOn Video And Wonder Why 30,000 People Are Fasting. . .

I wonder if any of the people featured holding empty plates have given to a local charity out of their own pockets to feed the poor?



That's besides the point.

"Politicians never accuse you of 'greed' for wanting other people's money --- only for wanting to keep your own money." (Joseph Sobran)

It's funny how most people who do say "Tax the Rich" never say what the next step is. To crib the business model from the Underpants Gnomes, it's:

Step One: Tax the Rich.
Step Two: ???
Step Three: Government profits!*

So to indulge those who do say, "Tax the Rich" let's do this. Forbes released their list of the 400 richest people in America last year. The combined wealth for everyone on that list was 1.37 trillion. If at the stroke of a pen the President can take that 1.37 trillion via executive order and distribute that to the roughly 300 million Americans, there would be about $4,500 per person.

According to the Cato Institute, there's roughly a 70% administration cost per dollar that is budgeted toward welfare.

Today [This was back in 1995. I can't imagine that the bureaucracy of government has miraculously improved over that time. The only other place I found that had this stat was the highly polarized and slanted Media Matters.], 70 cents of every dollar goes not to poor people, but to government bureaucrats and others who serve the poor. Few private charities have the bureaucratic overhead and inefficiency of government programs.

$.70 would go to the government to help run the program and $.30 to the actual poor. Using those percentages with taxing the rich would put that amount to a little over $1,300. If that.

And I'm not even going to go into the US deficit or budget either. Suffice it to say should Congress find $1.37 trillion plopped into it's lap, it won't be used to pay off anything.

Anyway, most of that exercise is pointless. Turns out, those cuts were phantom cuts. Reductions in future spending. Where (via Insty) “Only in Washington can a budget that spends more than it did the year before, with a larger deficit, be portrayed as ‘cutting.’”

*Looking that over, Step 2) should be 'Government profits' THEN Step 3) would be 'Distribute a small portion to special interest group'.

Update: Walter Williams weighs in.

Apologies For The Blogging Absence

Have had quite a few balls up in the air and the blogging ball finally landed for a short while.

All it took was the bombing of Libya and Charlie Sheen going on a sold out tour.

I'm moving across town but there is no internet set up at the new place yet. Just at the old place.

Anyway, something occurred to me about the Democrats in Congress. Are they really Chessmasters?

I kept seeing people ask, "Why are the Democrats in Congress doubling down on stupid? Don't they realize that they will lose control of the House and maybe even the Senate?" last year, long before the election. Then the time came for Congress to pass a budget. Nothing. The can was kicked down the road.

Did the liberals/progressives in Congress see far enough into the future to realize that the Republicans would take over and they were purposefully leaving them a House in chaos? It seems like it now with the Continuing Resolutions going on. And with each Resolution being passed, Democrats can claim that Republicans have "cut too much" or some other crap like that. Knowing that if a budget or a CR isn't passed, a government shutdown would be likely. That would be the cudgel that the Democrats could use against the Republicans in the next election.

They passed ObamaCare, knowing it will cost them control in at least one-- if not both-- part of Congress so when the Republicans took over, they would be in a bind with the budget.

In all fairness, however, all it would take is one 'Chessmaster' on the liberal/progressive's side. All the rest of the Democrats are a collective mindset who would follow along like cows following along the Judas Goat at a slaughterhouse.

I know, I'm using at TV Trope as an example but I it was the best example I could thing of.

One More Republican Senator Declares His Opposition To The Continuing Resolutions

Sen. Mike Lee of Utah says it's a losing strategy and taxation without representation (video of Sen. Lee at link to Cubachi).

Mike Lee joins Marco Rubio in support of passing a real budget, instead of this week by week nonsense that is being done now.

The Democrats failed to pass a budget at the start of the financial year so Congress have been reduced passing the short term CRs instead of an actual budget. But with passing the CRs, ObamaCare is being funded by hidden provision put in by the Democrats last year. So many Republicans are at a fork in the road. Take a principled stand call for a vote on a real budget or keep funding ObamaCare, a couple of weeks at at time.

The messaging should be easy enough for the budget. Keep pushing that the Democrats had control of both the House and Senate and failed to act and lead.

When the eventual question about a "Government Shutdown" is asked, reply back that it wouldn't have been necessary if the Democrats did their job last year and passed a budget instead of kicking the can down the road. Hammer home that message. If someone strays off point-- Lindsey Graham comes to mind as an example for no particular reason-- haul him off into some backroom and beat him with a pillowcase full of door knobs until he gets back on message. "A Government Shutdown wouldn't have been necessary if the Democrats did their Constitutional duty and pass a budget last year."

Oh yeah, Mike Lee is the (Tea Party) guy who took (Establishment) Bob Bennett out of the running last year in the state caucus.

Marco Rubio: No More Budget Games

Rather than these two week continuing resolutions, Sen. Rubio seems to be putting his foot down.

“Our country faces a brutal reality: for far too long, the federal government has been recklessly spending money it does not have. It is the reason we now have a $14 trillion debt that threatens to bankrupt our country and why, each day, our government borrows $4 billion - almost half from foreigners and most of that from China.

“Despite the seriousness of this debt crisis, an absurd pattern has clearly developed in Washington. Last year, when they still controlled the House, Senate and White House, the Democrats failed to pass a budget at all. In the first two months of this year, Senate Democrat leaders have spent invaluable time not on tackling the debt but on re-authorizing the F.A.A. and reforming the patent system. Their only attempt at addressing our debt was a plan to cut $4.7 billion in spending, which only equals what our government borrows approximately every 30 hours alone.

“Democrats' unwillingness to engage on this issue is leading us closer to a catastrophic debt spiral that will irreversibly damage our government, our economy and ultimately our country.

“The absurdity of what we have witnessed on the Senate floor is only eclipsed by the lack of leadership demonstrated by the White House, and a President who has been absent from this debate and even sent his lead negotiator on a five-day foreign trip.

“All this has led to a very predictable outcome: Washington politicians of both parties scrambling to put together two and three week plans to keep funding the government, while not fundamentally changing the behavior that has gotten us into this mess to begin with.

“Running our government on the fumes of borrowed spending is unacceptable, short-sighted and dangerous. I commend the efforts of House and Senate Republican leaders to deal with this, but I did not come to the U.S. Senate to be part of some absurd political theatre.

“I will no longer support short-term budget plans. While attempts at new spending reductions are commendable, we simply can no longer afford to nickel-and-dime our way out of the dangerous debt America has amassed. It is time our leaders in Washington wake up and realize that we are headed for a debt disaster.

“With Congress set to begin another week-long recess next week, every senator and representative should feel ashamed if they have to go home again, look their constituents in the eye, and explain why nothing is being done about our debt crisis.

“If the federal government keeps spending money we don't have, we are going to do permanent damage to our economy's ability to grow and create jobs while ultimately destroying Medicare and Social Security.

“Despite the lack of leadership demonstrated so far in Washington, we still have a choice. A government shutdown is entirely avoidable if the President steps up to lead and if politicians from both parties finally get their act together, pass a budget for the rest of the year, and move on to the real debate to save entitlements and tackle America's debt crisis.

“If we deal with these issues seriously and immediately, we can leave our children with a country better than the one we grew up in. If we don't, we will be the first Americans to leave our children worse off than ourselves.”

Video: The Deficit Explained Using Shots Of Jack Daniels

Via The Daley Gator.



Or it can be summed up by this Iowahawk quote:

If your pet govt agency is existentially threatened by a 5% budget cut, it's too poorly managed to exist in the first place.

Video: The Debt Limit Made Simple

It's a little over five minutes in length but simplifies how the Debt Limit works.



The video is a little over a year old but still timely.

Cross posted at The Daley Gator and Disrupt The Narrative.

Instead Of Passing A Congressional Budget. . .

Eric Cantor Treats The Federal Budget Like Some Sort Of Game

Something a bit more than 'Let's Make a Deal' but less than 'The Price Is Right'.

Anyway, he's taking a pair of kids scissors to something that really needs a chainsaw.

New Age Of Fiscal Conservatism Dawns

Or maybe not.

The Congressional Budget Office (CBO) said President Barack Obama's budget would lead to annual deficits averaging nearly $1 trillion for the next decade.

The estimates are for larger deficits than the budget shortfalls expected by the White House.
[. . .]
The Obama administration estimated its policies would lead to an average annual budget shortfall of $853 billion for the next 10 years.

The difference is that Obama’s estimate expects more tax revenue.
[. . .]
The budget office said Thursday the deficit for the first five months of the fiscal year, which starts in October, was $655 billion, an 11 percent increase over the same period in the last fiscal year.
[. . .]
Corporate tax revenues fell by $11 billion because of lower profits and a tax break in the stimulus that allowed companies to use current losses to offset taxes on past year's profits.

The two ways to bring in more cash-flow is to cut back on expenses or increase revinue. Seeing how cutting back is not in this administrations vocabulary, odds are it will be the Government's answer to increasing their cash flow. By raising taxes in the middle of a depression. Which was one of the things that the Tea Parties and 9/12 was trying to warn against.

Or if you are a hard core progressive ideologue, those protests happened because Barack is our first black President and everyone involved is racially motivated.

Cross posted at The Richmond Liberty Alliance.

Good News!

The debt ceiling is not being raised to 1.8 trillion dollars.

Bad News. It's being raised to 1.9 instead. A billion here, a billion there. Soon, Congress starts to talk about real money.

Republicans were caught off guard by the scale of the increase which follows a $290 billion short-term debt increase approved prior to Christmas. “That’s just escapism of the worst sort,” Sen. Judd Gregg (R.,N.H.) told POLITICO. But Democrats countered that their only alternative would be to give-in to a Republican strategy of forcing multiple smaller debt ceiling increases, designed to bleed them politically before November.

This perception was reinforced by a meeting Tuesday between Treasury Secretary Timothy Geithner and Senate Republican Leader Mitch McConnell (R-Ky.). By going now with the higher $1.9 trillion target, Democrats are making a high-stakes gamble that the party can pull together once more to put the debt ceiling issue behind them for this election year.

“We have to do this. The alternative is worse,” said Senate Finance Committee Chairman Max Baucus (D—Mont.) in a brief interview.

Because the alternative is. . . Not spending? Reigning in costs? Borrowing $800 billion from China?

The election in Massachusetts was somewhat of a wake up call for Congress due to their walk-back on the ill-named 'Health Care Reform'. Make sure they don't roll over and hit the snooze button anytime soon.

Problem Solved

The deficit will be solved soon. No worries.

Congress will just raise it to $1.8 Trillion. See? Nothing to worry about now. Back to your bread and circus.

UPDATE: Was kindly linked to by No Sheeples Here.

Via Insty.

Oh Dear

With the election of the first Post-Racial President we now have the highest record level of debt.

It's another record-high for the U.S. National Debt which today topped the $12-trillion mark. Divided evenly among the U.S. population, it amounts to $38,974.34 for every man, woman and child.

Technically, the debt hit the new high yesterday, but it was posted on the Treasury Department website just after 3:00 p.m. ET today. The exact calculation of the debt is a 16-digit tongue-twister and red-ink tsunami: $12,031,299,186,290.07

This latest milestone in the ever-rising journey of the National Debt comes less than eight months after it hit $11 trillion for the first time. The latest high-point is not unexpected, considering the federal deficit for the just-ended 2009 fiscal year hit an all-time high at $1.42-trillion – more than triple the previous year's record high.

Not to worry, Turbo Tax Tim Geithner has a plan.

The new debt number adds urgency to Treasury Department calls on Congress to quickly raise the statutory limit on the National Debt which now stands at $12.104 trillion. The debt ceiling was last raised in February as part of the $787 billion Recovery Act stimulus bill.

I can't figure out this last line. It's as if Obama is lying his ass off and expects to have a complacent media go along with it like a bunch of schmucks or if he is flat plain dumb.

Mr. Obama has said he hopes the health care plan pending in Congress will serve to curb the growth in the debt by reducing the amount government spends on health care

There is one way that will happen. Rationing of health care. Both the House and Senate versions of the bill are expanding entitlements, which will lead to greater costs, not less. It's almost as if Barack Obama is trying to make sex with the American people.

[All emphasis mine in the quotes]

Cross posted at The Richmond Liberty Alliance Blog.

Just In Case There Hasn't Been Enough Spent Yet

A helpful guide to Obama's budget working it's way through Congress right now.

1. Congress holds the purse strings. [. . .] The goal: to try to contain skyrocketing deficits under Obama's proposal.
[. . .]
2. There will be a conference committee. Sometimes the two chambers are able to resolve their differences by ping-ponging the budget resolution back and forth between them [A good example of this: The Anatomy of a Scam]
[. . .]
3. Reconciliation is probably in the cards. Though Senate leaders have yet to officially declare their intention to use reconciliation, all but a handful of Senate Democrats support using the maneuver for health-care reform, as do senior administration officials. The powerful procedural maneuver creates a privileged bill that cannot be filibustered in the Senate. That means Democrats could pass the measure with 51 votes -- without any help from Republicans -- instead of the usual 60 votes needed to get anything significant and controversial accomplished.
[. . .]
4. The budget does not enact Obama's agenda.
[. . .]
5. Despite some squabbling, the Democrats have the votes [ed. They will OWN it]. Though centrist Democrats in both chambers have complained about the massive deficits, the party is united behind the president's core goals [Emphasis mine, so ignore step 4 above].