I see that the deal to raise the debt ceiling has passed. I can’t comment on it because I don’t know the details. I’ve been working. I do know that this deal is far from perfect. I would have preferred not raising the debt ceiling at all. At some point we have got to realize that we cannot continue to borrow 5 billion dollars every business day.
“Reductions of the magnitude now being proposed, if adopted, would likely lead Moody’s to adopt a negative outlook on the AAA rating,” the credit rating agency said in a new report. “The chances of a significant improvement in the long-term credit profile of the government coming from deficit reductions of the magnitude proposed in either plan are not high.”
It added that “prolonged debt ceiling deliberations” have increased the odds of a downgrade, but that the firm is still confident policymakers will avoid a default.
“It remains our expectation that the government will continue with timely debt service,” the firm said.
It also clarified that as far as it is concerned, the nation will only default if it misses an interest or principal payment on U.S. debt, not if it misses payments on other obligations like federal employee salaries or Social Security benefits.
The report also gives credence to a claim popular among Republicans: that the government has enough cash to avoid a default even past the Aug. 2 deadline set by the Treasury Department.
“If the debt limit is not raised before August 2, we believe that the Treasury would give priority to debt service payments and could thus postpone a potential debt default for a number of days,” it said. “Revenues would be more than adequate for some period of time to meet those payments, although other outlays would be severely reduced as a result.”
Moody’s previously put the nation’s top credit rating on watch for a downgrade on July 13, as lawmakers continue to fight over a deal to raise the debt limit.
While Moody’s is confident it will not have to downgrade the nation’s rating because of a default, it maintained that long-term debt and deficit problems will continue to weigh on the AAA mark.
As Republicans and the White House fight over the length of a debt limit increase, Moody’s said it would not reaffirm the nation’s AAA rating unless there is at least a six-month boost to the debt limit.
However, if the nation were to default for a short period of time, Moody’s said it would knock its credit rating down to AA, under the assumption that the default would be quickly rectified and investor losses would be minimized. However, in the “extremely unlikely” situation that investors do lose on Treasury investments, a lower rating could be given.
Nobody in Washington is seriously trying to balance the budget. The Republicans are too timid. They are afraid to make anything more than nominal cuts that won’t even come close to being enough. The Democrats are oblivious. They are still trying to protect stupid stuff like cowboy poetry reading festivals from being cut. I am afraid that we are doomed.
I haven’t been following the debate very closely, just on and off. Right now I am not sure what is happening. I see a report through Drudge that they are very close to a deal. But, as I read through the story, I don’t see any details. Evidently there will be no new taxes but I don’t see what they might cut.
WASHINGTON (AP) — The top Republican in the Senate said Congress and the White House were very close to a deal on raising the limit on U.S. borrowing that would avert an unprecedented default on America’s debt, ending one of the nastiest partisan fights in recent memory.
Senate Majority Leader Mitchell McConnell said he was nearing a recommendation of the tentative agreement to Republicans in the upper chamber. It would, he said, likely extend U.S. borrowing authority, which expires on Tuesday, beyond the 2012 presidential and congressional elections, a fundamental demand of President Barack Obama.
At the same time, the agreement would include none of the tax increases Obama has sought and Republicans had steadfastly rejected. It also includes, he said, the requirement that both houses of Congress vote on a constitutional amendment to balance the budget. That outcome of that vote, however, would have no effect on raising the debt limit.
Senior White House adviser David Plouffe said that both sides are generally in agreement on an emerging package that would cut the deficit in two stages, with key details still being worked out.
Democratic Sen. Chuck Schumer said there still was no deal and talks on many issues still needed to be settled. Although he said there was “relief” in Congress and the White House because serious negotiations were now making headway.
The deal, negotiated late Saturday night, would raise the nation’s debt limit would rise in two steps by about $2.4 trillion and spending would be cut by a slightly larger amount, according to officials close to the talks. The first stage — about $1 trillion — would take place immediately and the second later in the year.
The officials who described the talks did so on condition of anonymity, citing their sensitive nature.
Obama is seeking legislation to raise the government’s $14.3 trillion debt limit by enough to tide the Treasury over until after the 2012 elections. He has threatened to veto any legislation that would allow a recurrence of the current crisis next year but has agreed to Republican demands that deficits be cut — without tax increases — in exchange for additional U.S. borrowing authority.
The alarming thing is that this isn’t the real crisis. The real crisis is that we are 14.3 trillion dollars in debt and as far as I can tell this deal only gets us further in the hole. We have got to start balancing our budget right now. We have got to come up with a credible plan to begin to pay down that literally astronomical debt. Frankly I think it might have been better to not raise the debt ceiling and deal with a default right now. If things go on as they have been, we will have a default in our lifetime, probably sooner rather than later.
Whether you are a true believer worried about the terrors of global warming (climate change/climate catastrophe) or a skeptic who wants some solid information to convince your friends, you have to read The Politically Incorrect Guide to Global Warming and the Environment. If this well-researched book does not play an important role in finally debunking the global warming scare, then nothing ever will. Alas, I fear that nothing ever will since the hypothesis of manmade global warming has proved to be strangely unfalsifiable.
Even those who have followed this issue closely are sure to find at least one eye opener in this book. Just a few examples include,
- The earth has not gotten warmer since 1998
- There is no direct link in the amount of carbon dioxide in the atmosphere and the earth’s temperature. Solar activity has far more influence
- The 1990’s had a higher temperature than average because the weather stations in Siberia were closed down after the collapse of the Soviet Union.
- The Kyoto treaty is completely ineffective. Most of the countries that are increasing their carbon emissions, including China, India, Brazil, are exempt. Assuming the alarmists are correct, then at best, the Kyoto treaty will reduce the temperature increase by .07 ° C. That is assuming that the emission targets are met, which is impossible.
- Evil corporations do not fund the global warming skeptics. In fact there are several corporations that stand to benefit from global warming legislation, including Duke Energy, DuPont, and BP
If after reading this book, you still are not convinced, ask yourself this. Why do the alarmists resort to deception so often? From the climategate scandal to the hockey stick fraud, they exaggerate and lie. Why do they try to suppress dissenting views, if the science is all on their side? Why do they claim a consensus when none exists?
That’s what Paul Krugman thinks. I wish I knew what medication he is on. I would like some too.
Here is some more of his madness.
Watching our system deal with the debt ceiling crisis — a wholly self-inflicted crisis, which may nonetheless have disastrous consequences — it’s increasingly obvious that what we’re looking at is the destructive influence of a cult that has really poisoned our political system.
And no, I don’t mean the fanaticism of the right. Well, OK, that too. But my feeling about those people is that they are what they are; you might as well denounce wolves for being carnivores. Crazy is what they do and what they are.
No, the cult that I see as reflecting a true moral failure is the cult of balance, of centrism.
Think about what’s happening right now. We have a crisis in which the right is making insane demands, while the president and Democrats in Congress are bending over backward to be accommodating — offering plans that are all spending cuts and no taxes, plans that are far to the right of public opinion.
Imagine making insane demands like actually balancing the budget, or at least not running trillion dollar a year deficits before the credit rating agencies down grade us. Crazy!
A while back I mentioned that some protesters had destroyed a field of experimental genetically modified crops in Belgium. I have since read about similar incidents in Germany and now Walter Russel Mead writes about Australian Greenpeace “activists’ doing the same in their country.
Science is a funny thing in the hands of today’s global greens.
Greens decry their political adversaries as unsophisticated, anti-science simpletons for questioning the empirical evidence behind global warming.
Yet when it comes to scientific evidence that hurts their cause, the greens are full out flat earthers. Take genetically modified foods, for example: the scientific community has generally concluded that they are perfectly safe for consumption and that the widespread use of GMOs will help feed the world’s poor. These conclusions are at least as “settled” as the evidence for climate change.
The sober response of the “reality based” and “pro-science” greens? Yesterday, Australian Greenpeace activists snuck into a government run farm and destroyed a crop of genetically modified wheat.
It is strange that a group of people that call themselves “Progressives” seem to be against progress of any sort. It’s a good thing these people weren’t around during the Neolithic period. They would have probably protested against the invention of agriculture, calling planted crops “frankenfoods“, and insisted that everyone only eat organically hunted and gathered food.
- Greenpeace sickos destroy GM wheat test site (politics.ie)
USA Today ran a piece by President Obama today titled “Go ‘big’ on debt deal”, in which he discusses our fiscal situation. I just want to say that I am beginning to fear for his mental health. I honestly think he has lost touch with reality.
He begins well enough,
For years now, America has been spending more money than we take in. The result is that we have too much debt on our nation’s credit card — debt that will ultimately weaken our economy, lead to higher interest rates for all Americans, and leave us unable to invest in things like education, or protect vital programs like Medicare.
Neither party is blameless for the decisions that led to this debt, but both parties have a responsibility to come together and solve the problem. That’s what the American people expect of us. Every day, families are figuring out how to stretch their paychecks a little further, sacrifice what they can’t afford, and budget only for what’s truly important. It’s time for Washington to do the same.
Both parties are, of course, to blame. Both Democrats and Republicans have been spending our money like so many drunken sailors. But I really wish that Mr. Obama would take the blame for the unprecedented amount of “stimulus spending” that his administration has been responsible for these last two years
But over the last few months, I’ve also said that I’m willing to cut historic amounts of spending in order to reduce our long-term deficits. I’m willing to cut spending on domestic programs to the lowest level in half a century. I’m willing to cut defense spending by hundreds of billions of dollars. I’m willing to take on the rising costs of health care programs like Medicare and Medicaid, so we can meet our obligations to an aging population.
Some of these cuts would eliminate wasteful spending, weapons we don’t need, or fraud and abuse in our health care system. Still, some of the cuts would target worthwhile programs that do a lot of good for our country. They’re cuts that some people in my own party aren’t too happy about, and frankly, I wouldn’t make them if we didn’t have so much debt.
But the American people deserve the truth from their leaders. And the truth is, you can’t get rid of the deficit by simply eliminating waste and fraud, or getting rid of pet projects and foreign aid, like some have suggested. Those things represent only a tiny fraction of what we spend our money on.
But he doesn’t give any specifics on what he thinks we should cut. So far, I have not heard him even consider cutting spending on any of his pet projects like Obamacare, or all of that stimulus. But next he get what he’s really after.
At the same time, it’s also true that if we tackle our deficit with spending cuts alone, it will likely end up costing seniors and middle-class families a great deal. Retired Americans will have to pay a lot more for their health care. Students will have to pay a lot more for college. A worker who gets laid off might not have any temporary help or job training to fall back on. At a time of high gas prices, we’ll have to stop much of the clean energy research that will help free us from our dependence on oil.
That’s why people in both parties have suggested that the best way to take on our deficit is with a more balanced approach. Yes, we should make serious spending cuts. But we should also ask the wealthiest individuals and biggest corporations to pay their fair share through fundamental tax reform. Before we stop funding clean energy research, we should ask oil companies and corporate jet owners to give up the tax breaks that other companies don’t get. Before we ask college students to pay more, we should ask hedge fund managers to stop paying taxes at a lower rate than their secretaries. Before we ask seniors to pay more for Medicare, we should ask people like me to give up tax breaks they don’t need and never asked for.
The middle class hasn’t just borne the brunt of this recession; they’ve been dealing with higher costs and stagnant wages for more than a decade now. It’s just not right to ask them to pay the whole tab — especially when they’re not the ones who caused this mess in the first place.
That’s right. Raise the taxes on those evil rich who caused the mess we are in. He doesn’t want to cut any of his projects like “clean energy research” that is going nowhere. Of course he has to throw that bit in about corporate jets. That facts of the matter are that eliminating tax breaks for oil companies and corporate jets wouldn’t even begin to pay for the increased spending that has occurred on his watch. Confiscating the wealth of every millionaire wouldn’t make a dent on our national debt. Our problems come not because the government is not getting enough revenue but because our leaders can’t stop spending, even if their lives depended on it. Either Obama knows this and is the biggest liar we have ever had in the White House, or he believes what he is saying and has lost it.
The United States Federal Government is more than $14 trillion in debt. I think that one of the problems in our political discussions over the debt is that the human mind is simply not designed to comprehend such large numbers. We may understand them on an intellectual level but not on an emotional or “gut” level. I am not sure what the largest number we can really understand intuitively, maybe 20 or 100. Anyone can instantly tell the difference between 10 and 20 or 50 and 100, but when it comes to millions or billions, it’s harder to compare.
The largest number the ancient Greeks and Romans used was the “myriad” which was 10,000. So 50,000 was 50 myriad, 1,000,000 was 100 myriad, and so on. This went up all the way to a myriad myriad which means 100,000,000. They didn’t really need any numbers larger than that.
By the time of the Renaissance, mathematicians and bankers needed larger numbers. The precise meaning of large number names varies from country to country. I will be using American usage. A million is a thousand thousand. The word million was coined sometime in the 14th century from French and Italian. A billion is a thousand million. The word was coined around 1680 and means simply two + million. A trillion is a thousand billion. The word was also coined around 1680 and means three + million. I could go on with quadrillion, quintillion, and so on but I think you get the point. Anyway mathematicians and scientists who use really large number use scientific notation, which is beyond the scope of this post.
All right now, let’s see if we can understand 14 trillion. Fourteen doesn’t seem to be a large number, does it? Well, let’s convert the trillions to billions giving us 14 thousand billion. That seems a bit larger. Now let’s go further down to millions. Now we have 14 thousand thousand million. One more step. Try thinking about 14 thousand thousand thousand. That sounds like a whole lot more than just 14 trillion.
Whichever way you put it, that is a truly astronomical number. It is more than the number of stars in our galaxy. It is more than the number of galaxies in the observable universe. It’s a little more than half the distance to Alpha Centauri, the nearest star, in miles, but give Obama a second term and I’m sure we’ll get there.
If any of this doesn’t help, here is a visual aid I got from life’s little mysteries.
With all that in mind, the current controversy concerning the debt limit seems to me to be rearranging the deck chairs on the Titanic. The iceberg has hit us and we had better start plugging the hole.
As Washington stares at rising national debt and projected deficits for years to come, many states are faced with the opposite problem: whether to spend their budget surpluses and, if so, on what.
At least a dozen states ended fiscal 2011 with surpluses. Indiana reported one of the largest, with an extra $1.2 billion in its accounts. Gov. Mitch Daniels, a Republican, on Friday authorized bonus payments of up to $1,000 for state employees. An employee who “meets expectations” will get $500, those who “exceed expectations” will receive $750 and “outstanding workers” will see an extra $1,000 in their August paychecks.
“No state anywhere comes close to Indiana’s record of spending tax dollars carefully, with total savings over the last six years in the billions. Your spending efficiency has enabled us to stay in the black even as revenues plummeted,” said Mr. Daniels, who recently flirted with a run for the White House but ultimately stayed out of the race.
While Indiana decided to reward its employees, other states are redirecting surplus funds into cash-strapped areas such as education. Idaho ended the year with an $85 million surplus, the majority of which will be funneled to public schools and colleges, Gov. C.L. “Butch” Otter, a Republican, said in a statement last week.
I thought I read somewhere that we actually had largest surplus but I can’t find that anywhere. I must say though, that I do not really approve of Governor Daniel’s decision to give out bonuses to state workers. I would rather the money be put away somewhere for a rainy day, like when the federal government goes bankrupt and can’t give out money to the states anymore.
- Best of the Web Today: Power and the Press (online.wsj.com)
“I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it,” Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News.
He is lying and he knows it. I don’t think that I have ever felt such contempt for a President before. Between his feckless appeasing foreign policy and his demagoguery as the country nears the abyss, he has to be the worst president of my lifetime.
I didn’t care for Bill Clinton. He was a sleaze, and I am not just referring to his affairs. He was a pathological liar. But, he did seem to have the best interests of the country in some small corner of his mind. He could also be pragmatic.
Jimmy Carter was bad, but mercifully, I was too young to remember much of his presidency. He was a weakling who mistook his weakness for moral virtue.
George Bush I had no strong core beliefs of his own. He seemed to want to be president simply to cap off a career in public service. He seems to be a good man but he tended to react to events rather than cause events to happen.
His son also seems to be a good man and stronger than his father, but frightfully inarticulate. He never seemed to be able to explain what he was doing or what he hoped to accomplish. This seems to be a Bush family trait.
But again, of all these, Obama is the worst.