There is no question that a huge issue facing Congress and President Obama is the national deficit. The current debt ceiling of $14.2 billion is about to be reached, and few question that it will be increased. Just as many also concede that in 2012, another increase of perhaps $1.1 trillion will be needed.
The truth is that there have been 72 debt ceiling increases since 1964. There have been 10 increases since 2001. Debt under President Obama alone has increased more than 40%, though all Presidents before him share in the some part for the current crisis.
Democrats and Republicans are at an impasse over the debt. Democrats are reluctant to cut any spending or social entitlements. Republicans want sweeping changes – or so they say. The reality is closer to the fact that the combination of spending cuts, with or without increased taxes, does nothing but slow the rate of debt increasing. Both Parties have become dependant on increased spending, for the benefit of special intrests that cater to both Parties.
In fact, the recent debate over spending cuts for the 2011 budget highlighted the mockery of the situation. Taking the cuts proposed by both Democrats and Republicans, COMBINED, equal only only about 45 days of interest accumulated since the start of the year. For all the media hype, and political posturing, the net result was negligible.
Still, the 2012 election is quickly coming up. President Obama has already announced his bid for re-election. The national deficit will be a major issue, if for no reason other than the declaration by Moody’s that a reduction in the credit rating of America will be downgraded sooner than later. A reality that demands action swiftly.
The response to this dire situation has been finger pointing and wild accusations. Democrats, like former-Speaker of the House Nancy Pelosi, have made outrageous claims that any course other than the one we are on leads to the death or seniors and compromised quality of life for children. Republicans for their part have elements that are equally out of touch with reality.
The culmination is a battle for each Party to appear like it is doing the very best thing for the public. Which brings us to the fear-mongering.
Today Treasury Secretary Tim Geithner announced that he will stop a category of non-marketable bonds known as State and Local Government Series securities, or SLGS. The purpose of these SLGS is simply to help local and State governments pay bondholders. They (SLGS) are not vital, and the same payment to municipal bondholders can be done without the Federal bond. They are in essence a labor and time saving device.
The fact is that
“From the federal government’s perspective, cutting SLGS does not actually lower the total debt burden.”
Something you might miss burried will into the middle of the article titled As Debt Ceiling Isn’t Raised, ‘Headache’ For Cities, States Begins Friday from the Huffington Post. In fact, reading through the entire article, the implication seems more dire and action on the passage of the debt ceiling more immediate.
The debt ceiling is a serious matter. Continuous passage of ever higher debt levels does nothing to restrict Federal spending – the original intention of the debt ceiling – nor does it abate the credit downgrade already predicted for the nation.
But fear-mongering, suggesting that action without serious debate, and a search for reasonable changes in the federal spending habit, is far from beneficial. Ceasing programs that have no effect on the debt, while publicly announcing the cesstation in a tone suggesting urgency and dire consequences is nothing but blatant political arm-twisting.
Some Democrats, like Nancy Pelosi, will use such wording to inflame emotions by further exaggerations of extreme misfortune unless immediate action under the direct request of Democrats is taken. Calls for thoughtful planning will be again discarded or characterized as vile acts against the best interest of the nation.
Yet, if Congress were to act immediately and pass the debt ceiling increase, how does this benefit America in the long term? How does the expansion, yet again, of a bill that is quickly becoming all but impossible to pay off help current children and grand-children to come? How might passing this years higher debt ceiling, and next years and so on, bring any security for the nation?
The deficit is increasing $3.5 billion a day. That’s inclusive of the 2011 budget compromise. That’s at current interest rates, which will eventually raise substantially just to reach historical norms – increasing the debt almost exponentially. Is blindly increasing the spending tab on a Federal Government hooked on spending like a crack addict really something that should be done without a moment of consideration?
Fear-mongering, from any political party or politician is abhorant. It reduces serious issues to emotional impluses, rarely in the benefit of anyone. The debt ceiling, and the national debt, are far too important to play games with. Especially from people like the Treasury Secretary, who should be above such partisan tactics.
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