published Friday, July 15th, 2011

Irresponsible threat to U.S. finance

The failure of Congress and the president to provide for the financing of the functions of the federal government is yielding serious consequences. It is widely known that after Aug. 2, the government won’t be able to pay all our country’s bills.

That will make the nations of the world view the United States’ once-solid financial standing in a different and much less positive light.

But a default would also have concrete, ugly economic effects. Just the possibility of a default prompted Moody’s Investors Service to declare that the United States could lose its triple-A bond rating. That would mean higher interest rates on mortgages and car loans, hurting our economy. Not once since Moody’s started assessing the United States’ debt 94 years ago has it failed to give our country its highest rating. But that is a real possibility now, Moody’s says, because Congress and the president haven’t reached an agreement on how to avoid a default.

Doesn’t that give you some indication of the level of irresponsibility in which our elected lawmakers and the president are engaging.

The expected consequences of exceeding our current $14.3 trillion debt ceiling without some resolution on how to continue paying our bills are serious enough. And yet the president has chosen to bring some additional scare tactics into the equation. He and Senate Majority Leader Harry Reid, D-Nev., are suggesting that senior citizens won’t get their Social Security checks if Republicans do not go along with Democrats’ plan to deal with the debt limit by raising taxes.

In fact, various economic analysts have made it clear that Washington can continue to pay Social Security benefits and maintain our national defense and other vital functions of government even under a partial default by focusing available funds on those critical needs first. Our duty to pay Social Security benefits to seniors who are counting on them should and can be fulfilled — and the president should not wield it as a bargaining chip.

Meanwhile, the debt limit should be increased only with corresponding, large cuts in federal spending. It should not be used as a pretext to impose tax increases that will make our already weak economy weaker.

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nucanuck said...

Neither party has proposed meaningful spending cuts because that would stall out the economy even further. No one, left or right, knows what to do that won't involve to much pain and dislocation.

If we do nothing, our problems worsen. The US is marching towards economic collapse and we seem unable to act or know how to act.

Will we have to lose everything before we begin to pick ourselves up and begin again?

Are any of the readers here beginning to prepare for difficult times? If so, what preparations do you recommend?

July 15, 2011 at 1:44 a.m.
hambone said...

I tightened my belt in 2000 when the SCOTUS declared Dubya the winner.Started planting a bigger garden and canning more!

July 15, 2011 at 1:58 a.m.
Plato said...

Serious Consequences? You must be kidding. Michelle Bachman said we don't need to raise the debt ceiling, and that we have plenty of money for everything including, interest on the debt, military, contractors, social security recipients etc. She said that the president was lying and fear monger for saying otherwise.

Let's try to keep our facts straight here :)

July 15, 2011 at 10:36 a.m.
nucanuck said...

hambone, like you, SCOTUS shook me up in 2000, but I didn't begin to lose hope until November of 2004. That date changed everything for me because the electorate failed to see the extent of the damage that was being inflicted on the country. I knew then that we were setting up for the "big one". The unfunded, unnecessary wars, the plummeting of the American brand around the world, the financial sector's outrageous products...all of that and more forced me out of my comfort zone to radically alter my family's life plan.

My family's journey has not been easy and I wish my assumptions had not been correct, but the country is where it is and very few seem to fully understand the implications.

July 15, 2011 at 11:39 a.m.
Leaf said...

Plato: Well, if Michelle Bachman said it then it must be true. She's even smarter than Sarah Palin.

The watershed for me was the bilateral passage of the Patriot Act. At that moment I knew we had irretrievably abdicated our freedom for the illusion of security.

July 15, 2011 at 2:43 p.m.
hambone said...

Remember in 2000 when Bush said about the Federal surplus " it's your money, why should the government have it "

Then he gave mine to the top 1% !

July 15, 2011 at 4:40 p.m.
328Kwebsite said...

It was widely known during the Bush administration, that the Republicans in government had no intention of collecting enough money to pay the bills.

PAYGO, the successful Clinton administration program which contained Republican fiscal irresponsibility, is a great answer to future budget problems.

Repeal The Bush Tax Cuts for the Wealthy. It's a great way to raise the revenue we need to pay for the debt created by The Bush Tax Cuts for the Wealthy.

Raise the debt ceiling. Reject Republican suggestions that we renege on our personal financial responsibilities. Maintain integrity by immediately approving President Obama's plans.

Most of all, put a stop to this Republican publicity circus. They have been saying since March 2011, on their websites, in TV interviews, and with their recent actions, that refusing to raise the debt ceiling is their only economic leverage.

Time to put a stop to the mouth-running, and get back to running the country. Thank you, Republicans, for ten years of indebtedness and financial catastrophe. Thanks again for blocking the immediate bill paying, after you created the debt with your irrational conduct.

Raise the debt ceiling. Repeal the Bush Tax Cuts for the Wealthy. President Obama's been more than patient enough with these showboaters who have failed to do their jobs in Congress.

Meanwhile, we realize that ratings companies don't have to wait until August 2 to adjust our credit rating. Given Republican conduct in press conferences, they already have good reason to "junk bond" our status today.

I'd tell the Republicans, "thanks for nothing," but we'd have to borrow more money to qualify for bankruptcy after their running of things.

I reiterate my thanks to Free Press editors for their support of President Clinton's PAYGO and the call for repeal of the Bush Tax Cuts for the Wealthy. Thank you.

Please publish a Jesus and the Moneylenders Bible quote this Sunday, so that your party can think about their usury. Have a nice day.

July 15, 2011 at 8:49 p.m.
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