Posts tagged congress

bryce-white:

So the debt ceiling was raised and we’ve avoided what Obama warned would be “economic Armageddon.” Phew. That was close. Now we can dig ourselves further into the hole that brought us here to begin with, and not deal with this again until 2013.

If there’s anything that’s more of a sham than the “economic recovery” we are experiencing, it’s the debt ceiling bill that was passed. Let me be clear: The Budget Control Act does not contain ANY spending cuts. Instead, the federal government will only be spending less than they had originally planned. The “cuts” are not from our current spending amounts, but our projected spending increases. Any cuts are illusory. This is their definition of a cut. The Cato Institute confirms this, saying:

“The budget deal doesn’t cut federal spending at all. The ‘cuts’ in the deal are only cuts from the Congressional Budget Office’s ‘baseline,’ which is a Washington construct of ever-rising spending…The federal government will still run a deficit of $1 trillion next year. This deal will ‘cut’ the 2012 budget of $3.6 trillion by just $22 billion, or less than 1 percent.”

Analysts are also speaking out and confirming that the deal will have little economic impact.

“The so-called ‘immediate’ spending cuts of $917 billion do of course not begin this year. And they barely have an impact in 2012 or 2013 either.”

“In a $15 trillion economy, the impact… is negligible.”

“It will save the US government from defaulting on its obligations to pensioners and others. But it does not address the long-term fiscal challenges facing the nation.”

This hasn’t stopped Defense Secretary Leon Panetta from whining about the spending “cuts” for the military, when in reality it has been shown that the Pentagon will really be receiving $50 billion more than what they had been expecting over the next decade.

The deal only serves to preserve the status quo and allow the government to continue accruing massive deficits and debt. Even before the debt ceiling was raised, the Treasury announced it would issue $331 billion in debt this quarter, a 75% increase from the $190 billion of the previous quarter. And that’s exactly what is already happening. In just one day on Tuesday, the Treasury issued $238 billion in debt, 68% of the $400 billion that the debt ceiling was raised by. This took the federal debt to $14.58 trillion. Being that our GDP for 2010 was $14.53 trillion, this means our debt-to-GDP ratio is now 100%. Our debt has exceeded the size of our entire economy. Reaching the 100% mark is not something to be taken lightly by any means, but it seems that’s what the mainstream corporate media is doing. And now the Treasury has announced it will be borrowing an additional $72 billion shortly.

As if all this isn’t bad enough, the debt ceiling bill has authorized the creation of a so-called “super Congress” — essentially a third house of Congress consisting of twelve Congressmen, that will look for areas to make spending or tax reforms. It then will submit their proposals to the real Congress for a vote. But the proposals will be “fast-tracked” and Congress will have no ability to amend or filibuster them. They may only vote yes or no, and if the proposals are rejected, automatic spending cuts kick in. The creation of this third house of Congress is unconstitutional, undemocratic, and dictatorial. Senator Harry Reid has openly admitted its authority could extend beyond just debt proposals, and may act to put other garbage into law:

“The joint committee — there are no constraints. They can look at any program we have in government, any program. It has the ability to look at everything.”

This “super Congress” will ensure that important decisions on spending, taxes, and entitlements are kept out of the hands of Congress, and in the hands of the carefully selected leadership.

The economic collapse is going along smoothly. The real estate bubble is still deflating with no bottom in sight, and property values fell 4.5% from a year ago. Banks are now simply bulldozing foreclosed homes rather than attempt to sell them. Both China and Russia are criticizing U.S. debt, and considering a move away from the dollar as a primary reserve currency. Putin says we are “leeching on the world economy.” The manufacturing and service sectors are both slowing. The Dow Jones Industrial Average just lost 507 points in one day. Gold is hitting all-time highs, meaning the dollar is becoming even more worthless. Major credit rating agencies are warning they might downgrade their rating of U.S. debt, which would mean borrowing would be much more costly. Real unemployment is above 22%. Real inflation is at 27%, with another round of quantitative easing money-printing from the Federal Reserve becoming more possible every day. GDP growth for the first half of the year was less than 1%, and only 0.4% for the first quarter.

Even the New York Times is having to admit that a double-dip recession “may be happening.” Yeah, no shit. The recession never ended, we’re in a depression. And every indicator promises it will only get worse.

(via bryce-white-deactivated20120131)

S&P States the Obvious

By: Dr. Ron Paul, U.S. Congressman

— Posted Monday, 15 August 2011

Politicians did not get much time to pat themselves on the back for supposedly rescuing the economy with the debt limit deal last week.  The ink was barely dry when Standard & Poor’s downgraded the US debt ratings anyway, roiling world financial markets.  Anyone who has taken an honest look at the government’s fiscal situation, taken into account how Washington works and the direction it is going would have a very difficult time arguing with S&P’s decision, although a strong case can be made that this was too incremental a downgrade and that it took far too long for S&P to admit the obvious.  

Nonetheless, the administration nitpicked over a $2 trillion “mistake”.  S&P rejoined with the fact that $2 trillion here or there hardly makes a difference in the time frame under discussion.  That, if nothing else, should tell you the magnitude of the problem.  $2 trillion has become a drop in the bucket.

S&P cited Congress’s inability to act like grownups and make necessary, meaningful cuts, which is true.  I must take issue however, with their suggestion that tax increases are part of the answer.  Taking capital out of the private sector, where it can create real value in the form of new jobs and products, and instead giving it to Washington to waste and squander is not the solution.  Tax increases may seem penny-wise to some, but in reality they would be very pound-foolish.  The government currently takes in $2.2 trillion in taxes per year, which is far too much already.  It spends $3.7 trillion, which is ridiculous and criminal.  The problem is runaway government spending, not the American people having too much money.

And yet we can’t even have a serious discussion about bringing our troops home and ending our expensive occupations around the world – things the president used to claim to favor!

Even without this downgrade, major investors are waking up to what lies down the road for the United States in fiscal terms.  China is showing more signs of losing its taste for our debt.  Others are following suit.  What we are about to see is the end of the dollar as the reserve currency of the world.  When that happens, we will no longer be in a position to have pretend debates about things we probably should spend a little bit less on - we will be forced to implement serious spending cuts as our sources of credit dry up.  Of course, we can try to postpone the day of reckoning by printing more money but the resulting “inflation tax” will be far worse than a reduction in government benefits.

Hyperinflation devastates the middle class.  After Weimar Germany hyper-inflated their currency in the 1920s, an entire life savings couldn’t buy a postage stamp.  The bank wouldn’t even send customers a check for all the money they had saved their whole lives.  It wasn’t worth the paper it was printed on or the stamp to send it.  This is what is meant when it is said that the middle class gets wiped out.  The pieces for this to happen here are all falling into place, and have been since 1971.  The only way to avoid that sort of chaos now is for Congress to immediately reduce federal spending and take the Constitution seriously again.  The welfare/warfare state will end either way, but winding it down responsibly is a far better way to do it.

You can find this address here:  S&P States the Obvious