Debt Ceilinged

[we vs us]

Thought you might like to know that, as of today, we've reached the debt ceiling. 

Treasury Sec Geithner says they can move money around till Aug 2 before the nation is actually insolvent, so all is not lost . . . but we're getting pretty close to all being lost.  And as predicted, Wall Street is starting to get itchy about the massive consequences.

I have to give the GOP props for sheer ballsiness.  Playing chicken with the nation's solvency (and global economic dominance) takes stones, and all to validate their 2012 domestic policy platform! 

My question is:  is pushing us to the wall the right way to get Mitt Romney elected? 

[Gaspar]

Headlines from the Post:

The Obama administration will begin to tap federal retiree programs to help fund operations after the government lost its ability Monday to borrow more money from the public, adding urgency to efforts in Washington to fashion a compromise over the debt.

Still waiting for a real budget from President Obama.

The budget framework he presented in his most recent feel good speech is not based on CBO numbers and he has not released anything to be scored by the CBO.  Want to know why?

It's easy.  First of all, it was not a proposal with details, it was a framework only, to be layerd on his existing unadopted budget proposal.  He stated in his address that this framework contains "$4 trillion in savings" over 12 years, not the usual 10.  Why?  Because that sounded better and it was the only way to counter Ryan's budget proposal.

The "savings" would come from cutting about $2 trillion in spending, and $1 trillion in tax increases and a reduction in our interest payments on the debt by $1 trillion. That's easy math.  Right?

So basically he has given a loose farmwork for "saving" $3.3 trillion (if viewed over 10 years).  Still better than a sharp stick in the eye, but not enough detail for the CBO to score.

Where does all this money come from? Well it gets a little clearer when you go back and look at the fact that President Obama also mentioned that $400 billion of his proposed cuts in non-security discretionary spending are already contained in his 10 year budget plan 2012 - 2022, along with $320 billion of his proposed tax hikes, plus $200 billion from Obamacare, and an additional $78 billion in defense cuts.  So you start to realize that he's using the same "Sebelius" philosophy of presenting numbers twice to make the result seem larger.

So there's actually only about $2.3 trillion over 10 years that represent the reduction in spending in his new framework.  Still better than a dead cat on your doorstep.  Now we start to get a baseline, though still not enough data for the CBO to score.  

Lets take a look at what the CBO has scored. . .President Obama's current 10 year budget 2012-2022 proposal that he intends to add this $2.3 trillion in new savings to. . .The CBO, however, says that Obama's budget would actually increase deficit spending by $2.7 trillion versus current law. So reducing that tally by $2.3 trillion still represents a $400 billion spending increase.

Had he given a better speech he might have passed off the shell game a little longer, and gotten congress to adopt another crisis, therefore raising the debt ceiling in anticipation of strong positive budgetary action, but instead, there is no indication of serious concern in the administration and a continual push for more spending.

At some point you have to take the car keys away or hide the whiskey.

[we vs us]

At some point you have to take the car keys away or hide the whiskey.

. . . . and drive our country into the ditch in the process? 

It's an interesting rationale:  we will cause irreparable damage to the economy in order to call attention to something that we've (very recently) decided is morally repugnant. 

Also:  this isn't about Obama's future budget.  This is about money we've already spent.

[Gaspar]

. . . . and drive our country into the ditch in the process? 

It's an interesting rationale:  we will cause irreparable damage to the economy in order to call attention to something that we've (very recently) decided is morally repugnant. 

Also:  this isn't about Obama's future budget.  This is about money we've already spent.

Pushed towards hard choices, I'm confident that President Obama will do the right thing. 

You should rejoice, this may be the death knoll of the Republican Party.  Refusing to yield in the face of an unstoppable spending force.  They will most likely bear the brunt of the blame.

I can't foresee where this will go but I don't see it as positive for either side.

I do see it as necessary though.  It's one of these "This is going to hurt me more than it hurts you" moments.

[guido911]

The GOP is simply doing what Obama, Reid, and Schumer (4 times) have done on the debt ceiling.

[we vs us]

The GOP is simply doing what Obama, Reid, and Schumer (4 times) have done on the debt ceiling.

Really?  That's news to me.  Cite?

[guido911]

Really?  That's news to me.  Cite?

Seriously? You don't remember when the dems voted against raising the debt ceiling just 5 years ago?

Well, here you go:

http://millennialpundit.blogspot.com/2011/01/obama-america-has-debt-problem-and.html

Oh, but since Hoyer and Obama regret those votes, they can reclaim the high ground.

http://thehill.com/homenews/house/155509-hoyer-joins-obama-in-calling-past-vote-on-debt-ceiling-a-mistake

[Red Arrow]

Seriously? You don't remember when the dems voted against raising the debt ceiling just 5 years ago?

But that was different.  W was Prez then.

[nathanm]

I seem to remember reading in the Constitution that it is the House that originates the budget. And what wevus said about past law (and the recession) being what is requiring the increase.

[Gaspar]

I seem to remember reading in the Constitution that it is the House that originates the budget. And what wevus said about past law (and the recession) being what is requiring the increase.

They did!  But of course it has always been the administrations privilege to offer their own budget.

Instead we get platitudes from a teleprompter, and misleading numbers specifically designed to influence the least of us. 

[nathanm]

I guess I missed a speech. Been busy lately. The Republicans are completely out to lunch on the entire budget issue. Paul Ryan's budget is a pack of lies that makes even less sense than the least sensible of the Democratic proposals I've seen. It relies upon growth we have literally never seen in our history to work.

[Gaspar]

I guess I missed a speech. Been busy lately. The Republicans are completely out to lunch on the entire budget issue. Paul Ryan's budget is a pack of lies that makes even less sense than the least sensible of the Democratic proposals I've seen. It relies upon growth we have literally never seen in our history to work.

That is incorrect, it relies on the exact same two growth scenarios used by congress and the administration (the CBO report and the OMB report).  It does provide a massive contrast in spending though.

[nathanm]

That is incorrect, it relies on the exact same two growth scenarios used by congress and the administration (the CBO report and the OMB report).  It does provide a massive contrast in spending though.

Aside from his ideological dislike of the Ryan plan, Krugman has detailed on his blog exactly where Ryan's arithmetic doesn't add up.

http://krugman.blogs.nytimes.com/2011/04/06/paul-ryans-multiple-unicorns/

[guido911]

Aside from his ideological dislike of the Ryan plan, Krugman has detailed on his blog exactly where Ryan's arithmetic doesn't add up.

http://krugman.blogs.nytimes.com/2011/04/06/paul-ryans-multiple-unicorns/

Krugman. Seriously? I'll wait until you bust out the Noam Chomsky take on Ryan's budget before engaging you on the arithmetic of it.

[nathanm]

Krugman. Seriously? I'll wait until you bust out the Noam Chomsky take on Ryan's budget before engaging you on the arithmetic of it.

Arithmetic is not subject to ideology. Or do you think that Krugman gets 5 when he adds two and two while you get three when doing the same calculation?