Carol Shea-Porter - The Debt? What Debt?

Washington is awash in congratulations and claims of noble compromise. House Republicans are bragging about becoming fiscally responsible while maintaining a morally responsible budget. There’s just one problem. It's not true.  The only thing they should feel good about now is their vote to keep the United States from a catastrophic default.
 
The national debt is a staggering 14.3 trillion dollars.  The debt ceiling deal they struck with Republican Tea Partiers (who the very conservative Wall Street Journal called "tea-party Hobbits") will only reduce the yearly deficits. It will not vigorously take on the debt.  That's like paying the new monthly bills on your credit card each month without significantly reducing the overall balance. And most importantly, it will hurt the already struggling middle class and the poor, and drastically reduce the city and state government services our citizens need and rely on.  It also will not create jobs; rather, it will eliminate jobs.
 
In order to properly function, this country must raise revenue. And Republicans in Congress have made it perfectly clear that they would have let this great nation crash into default and ruin our credit rather than raise revenue. They would not ask their campaign benefactors to do what the overburdened middle class has been doing for years—pay up. Republicans refused to close tax loopholes for oil companies and other corporations.  They refused to take subsidies away. They refused to give up the Bush-era tax cuts. Just last year, they convinced the president and Congress to extend them as part of a deal to continue long-term unemployment benefits, even though, as the Center on Budget and Policy Priorities demonstrated, the rise in debt would stop if they simply let the Bush tax cuts expire. They know that the top 1% doesn't need those tax cuts since they already receive almost 25% of all income and control more than 40% of the nation's wealth, but Republicans refuse to reclaim that much-needed revenue that could help the debt problem. Republicans also refused to change the tax code, which, as the General Accountability Office warned us back in February of 2009, allowed 67% of US corporations and 68% of foreign corporations to pay zero income taxes. That's right. Zero.  Republicans simply would not raise any revenue.  This is equivalent to the head of a family simply refusing to earn income, telling the family to instead just stop spending on essentials.

The Republicans refused to raise a single dime to pay down the debt, and President Obama could not get them to compromise at all. They refused to listen to Ronald Reagan's former Director of the Office of Management and Budget, who warned them last summer, "If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing." They refused to listen to any plea for more revenue, but this country needs everyone, not just small businesses and the middle class, to pay their fair share if we are to reduce our debt. 

Both New Hampshire members of Congress played follow the leader and took that tea-party/partisan stance, refusing to raise any revenue anywhere on anyone or anything, even if we cut Social Security and Medicare, even if we cut health care, even if we did not repair bridges, even if we cut jobs. These two members have the Republican problem—they have all signed a pledge, not to their constituents, but to Grover Norquist, the head of Americans for Tax Reform, and they would be severely punished if they violated "the pledge." They would be targeted and attacked on TV, radio, and by mail if they dared to even consider raising revenue from the dodgers.

So here we are, saddled with a Republican majority so beholden to a pledge to protect corporations and the top 1% that they cannot and will not defend the middle class or work to protect essential programs. We have a President who is surrounded by these partisans who threaten to bring down the economy if their demands are not met. And we have an exhausted and all too frequently unemployed middle class that is left wondering why corporations don't have to pay taxes, why the top 1% aren't included in the "shared sacrifice" formula, and why this nation can't pay its debts. But they don’t have to look far for an answer.  With this debt-ceiling fight, their Republican leaders just showed the people who they actually work for.

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Former Congresswoman Carol Shea-Porter represented New Hampshire’s First District from 2007-2011, she is seeking a third term in the November, 2012 election.  She wrote the proposal for and established a non-profit, social service agency, which continues to serve all ages.  She taught politics and history and is a strong supporter of Medicare and Social Security.

Peter Bearse - THE DEBT LIMIT, A VOTE TO SEPARATE THE SHEEP FROM THE GOATS

Now we know, at last. The vote to exorcise the media-Halloween specter of “economic Armeggedon” or “Global Meltdown” has been cast. All the hue and cry ended in a whimper. Except for cries of default by “Tea Party” Republicans -- default of courage.

 

The acid test vote on the federal debt limit indicates just how far we’ve got to go -- those of  us who spoke about and supported “real change in the way Washington does “We the People”s business.” The Republican veto-proof majority did well to approve a “Cut, Cap and Balance” [CC&B] approach to the issue. Only nine Republicans, including Michelle Bachmann, defected -- because they thought the CC&B cuts didn’t go far enough! Even with this, backed by support of CC&B by nearly 3/4 of Americans polled, the U.S. Senate voted down the initiative with a thud.# House leadership, however, didn’t have the “stones…testicular fortitude” to then draw a line in the sand and say to the Senate and its President: “Enough is enough; this is our position; DEAL WITH IT!”#

 

Thus, as of Friday, “We the People” were confronted with yet another bill and another House vote. The Boehner bill that finally passed was “Dead on Arrival” in the Senate, to become the subject of a backroom deal cut by the Senate President [still smarting from a Tea Party that had the temerity to challenge his senile eminence in 2010], the U.S. President [Teleprompter Reader-in-Chief] and the Speaker of the House [prime sponsor of the boner bill]. So we could look forward to another piece of major legislation cooked up through “secretive deals, gimmicks and tax increases.”#

 

Opportunities -- for the Tea Party to change the GOP or take it over -- all these were highlighted by the tiring debate, fear mongering and “political posturing” over the debt limit. The ultimate possibility, as advocated by several TP-associated Members of Congress (MoCs) led by Rep. Ron Paul, would have been to refuse to vote to increase the debt limit. This would have provided the kind of real barrier to increased federal spending and debt that most people voted for in 2010.

During his July 19th floor speech, Rep. Paul stated: “If the debt is the problem…how is raising the debt limit the solution”? Our current federal deficit is $1.6 trillion [T]. So, we owe the Federal Reserve $1.6T. This is not real debt subject to default. Let them eat it. Then we can get down to serious business. Default is not a matter of “failing to send out checks.” We’ll do that. Effective default is lose of people’s purchasing power and depreciation of their incomes via higher prices & interest rates (&c). This looms whether or not the current debt limit is increased. 

 

According to the mainstream media, compromise failed; Obama won; the GOP and TP lost. But the real losers are “We the People.” For the public was never well-informed. We got a pile of hype and fear mongering, as noted earlier. This included releases from two leading bond-raters, Moody’s and S&P -- whose misrepresentations helped cause the Great Recession! -- that “default” would spell a down-grade of the U.S. government‘s Triple-A-rated debt. What the agencies really stated was that there was a 50:50 chance that they would downgrade the debt within 90 days even if a “technical default” were avoided, if there was no credible plan to reduce the federal debt over the “long term.”

Opponents of the limit increase had repeatedly stated, and proponents had not denied, that failure to increase it by Aug. 2nd need not lead to a technical default. Why? -- Because the Federal Reserve could rearrange the government’s accounts payable enough so that interest payments on the debt would continue to be made in the short term. The President could instruct the Treasury to pay Social Security recipients on schedule [Aug.3rd]. In the meantime, up to three months, ways could be found so that the federal government would “live within its means” as established by the current, un-raised, debt limit. 

 

Was this scenario feasible? Yes, but here again, the public was ill-informed. On the one hand, media “economics” commentators were talking about anemic GDP and “jobs” reports, how government cutbacks and the threat of “default” were already starting to take the economy back down. On the other, they failed to specify precisely what default meant and what its implications might be, including short-term and long-term impacts on government spending and jobs. MoCs also seemed to be poorly informed except by “BeJesus” reactions to the media and ratings agencies’ fear-mongering.

 

Was the opponents’ scenario also credible? Yes. It is credible as the only position that really comes to grips with the basic problem of national over-spending and huge intergenerational accumulation of unsustainable debt. Over-reliance upon debt had become addictive. Like Nancy Reagan on drugs, somebody had to stand up and insist: “Just say NO!” TP Rep.’s were not altogether “somebody”. With some exceptions, they failed to fulfill a fundamental responsibility  -- to provide full, timely information to their constituents. When push came to shove, many lost the spines shown in their campaign advertising. Had they had forgotten the Biblical question: “Are we like sheep…?”

 

The GOP/TP overlap/on-again/off-again alliance failed again to face down Obama. Although the President bears responsibility for immediate negative impacts of the failure to raise the debt limit,  it is the GOP’s new, spine-less TP members that should pay the piper in 2012. If the TP is to regain its credibility, it should prepare to run candidates in primaries against those who voted for the “boner.” Like someone vs. Guinta in NH CD1. He was not among the 22 who had the courage to vote against the “boner.”

 

PETER BEARSE, Ph.D., International Consulting Economist and author of A NEW AMERICAN REVOLUTION: How “We the People” can truly “take back” our government (forthcoming).

 

Carol Shea-Porter - What’s Really Behind Debt-Ceiling Politics

The debt limit debate has become a sign of all that is wrong in Congress these days. This Congress, the most partisan in recent history and, as the LA Times notes, “underperforming even the ‘do-nothing Congress’ of 1948,” simply cannot stay at work long enough or even work together to get the job done.  As NH Senator Kelly Ayotte commented in that July 3 article, “I thought we would vote on a lot more bills.”  Yes, so did we.  At least, we thought they could vote on the looming debt ceiling vote before our country defaulted, but the deadline, August 2, is getting too close for comfort, and Congress had to be shamed into coming back to work this week to even argue about it. They have not passed a single jobs bill, which is a disaster for the millions of unemployed in this country, but if they let America default on its debts, the consequences would reverberate in the markets around the world.

 As Ronald Reagan said in 1983, “the full consequences of a default, or even the serious prospect of default by the United States, are impossible and awesome to contemplate.” In 1987, Reagan called refusing to raise the debt ceiling “brinksmanship” that ”threatens the holders of government bonds and those who rely on Social Security and veterans benefits.  Interest rates would skyrocket, instability would occur in financial markets, and the Federal deficit would soar.”  

Fast-forward to today.  In Atlanta Business Chronicle, US Chamber of Commerce President Tom Donahue said:  “…the country cannot afford to not pay its bills. To those newly-elected representatives who say they aren’t going to raise the debt ceiling and will shut down government, Donahue said the U.S. Chamber has its own message: We’ll get rid of you.”  This is pretty serious stuff.  When Republican icons from the past and the head of the US Chamber are warning Republican leaders of dire consequences if they don’t raise the debt ceiling and default, why isn’t Congress listening?

Sadly, the answer lies in politics.  Political ideology trumps reality.  Republicans are so against any kind of tax on the wealthy that they voted repeatedly to increase the ceiling through the Bush years rather than raise revenue to pay for their spending.  As USA Today stated in their July 5 editorial,  “…the nation has used trillions of dollars in borrowed money to finance two wars, Medicare’s prescription drug program, and President George W. Bush’s broad tax cuts—all initiated with the GOP controlling both the White House and Congress.  Now Republicans have belatedly decided that borrowing is bad too, but they dogmatically resist even the most sensible and painless tax hikes.”

The Republicans are so opposed to either collecting any income tax from GE and other corporations, or stopping taxpayer subsidies for oil companies and other special interests, that they are refusing to raise the debt ceiling unless Democrats agree to slash Social Security, Medicare, education, housing, transportation funding, infrastructure, research, healthcare, or anything else that actually benefits communities and the middle class.   They tell people through mailers and tele-town halls that they have to reduce benefits to save Social Security, all the while knowing that Social Security is solvent enough to fully pay benefits until 2036, and is not contributing to the debt at all right now.

Republican members are also misleading the middle class and small businesses by asking them if they want to pay more taxes, and then reporting back the answer was no. Of course it is no. The middle is tired of paying for the breaks the tax structure gives to the top 1% and multinational corporations.  NOBODY is talking about raising the taxes on the middle class, and Republicans know that. They are misleading the public and distracting them from the real issue. Their ideology and agenda will not allow them to raise revenue to help us dig out of this mountain of debt that their ideology got us in.  Democrats do not get a free pass on the debt since they certainly have contributed, and many voted to continue the Bush tax cuts for two years, but as USA Today noted, it was the recent spending since Clinton’s budget surplus that got this country into deep trouble.

Sad, isn’t it?  Although NH members vote with their party at least 95% of the time, I hope they will rise above politics and vote with Ronald Reagan rather than their current leadership.  America is counting on them to do the right thing.

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Former Congresswoman Carol Shea-Porter represented New Hampshire’s First District from 2007-2011.  She wrote the proposal for and established a non-profit, social service agency, which continues to serve all ages.  She taught politics and history and is a strong supporter of Medicare and Social Security.

Obama AGAINST Raising The Debt Ceiling?

By Nick Fortune

 

"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure.

It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better."

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Why was Obama against raising the debt ceiling in 2006, but now is pushing for it?

Obama voted against raising the debt limit in 2006; he voted against increasing the ceiling.

In 2007 and in 2008, when the Senate voted to increase the limit by $850 billion and $800 billion respectively, Obama did not bother to vote. (He did vote for TARP, which increased the debt limit by $700 billion.)

So is Obama admitting to a leadership failure?

Is he being a hypocrite?????

http://www.nationalreview.com/corner/256…



Ponzi on the Potomac

By Gov. Tim Pawlenty

February 1, 2010

http://www.politico.com/news/stories/0110/32282.html

The U.S. attorney general recently announced that the Justice Department is beefing up its efforts to fight financial fraud such as Ponzi schemes. Good. The agency should start by reviewing the spending habits of the federal government, which is running the largest Ponzi scheme our country has ever seen.

In a Ponzi scheme, organizers create the illusion of profit for early investors by siphoning money from later participants. It works until there is not enough income to pay the promised dividends, exposing the fraud and leaving everyone broke. That is essentially what the federal government is doing, as it continues to spend and promise far more than can ever be paid for by current and future revenues.

Last week, the U.S. Senate increased the nation’s debt ceiling by an additional $1.9 trillion. That vote was necessary to further the Ponzi scheme. It should serve as a wake-up call that this level of spending is unsustainable.

The debate is no longer between competing political philosophies — it is a matter of basic mathematics. Here is a sampling of the facts:

• Federal government spending has grown nearly seven times faster than median income since 1970, according to the U.S. Census Bureau and Office of Management and Budget.

• At more than $12 trillion, the federal debt is already more than 80 percent of the nation’s gross domestic product and growing fast.

• The federal government’s total debt, including unfunded liabilities, means about $600,000 of debt for every U.S. household.

Sooner or later, the federal government’s scheme will come crashing down, and the loss will be mammoth.

But it doesn’t have to end that way. If our country takes bold and decisive action soon, the worst effects can still be avoided.

We should start with the obvious. When the bathtub is overflowing, a wise first response is to turn off the faucet. The federal government’s spending-increase spigot needs to be shut off.

This will require a national understanding and acceptance of the problem: We need to admit our addiction to the illusion of government “free stuff” and demand that spending be cut in almost all areas.

This will not be easy. In recent decades, the national debt has grown regardless of which party is in power because too many politicians seek support by spending more, even though a sound economic future demands they spend less.

That’s why we need an amendment to the U.S. Constitution to require a balanced budget with limited exceptions for war, natural disasters and other emergencies. Every state but one has a balanced budget requirement, and while such requirements make for difficult decisions, they work.

The president also should be given line-item veto authority power as a budget enforcement tool. The experience of the states shows that this is an effective way of preventing excessive spending.

Spending reduction tools alone will not meet this challenge. We must also grow the economy. To that end, Congress should reject federal legislation that places additional burdens on growth, such as the proposed health care overhaul, cap-and-trade bill, labor union card check and tax increases.

Instead, lawmakers should support policies that promote economic growth. For example, the Bush tax cuts should be made permanent and tax burdens on individuals and businesses should be further reduced. To better compete overseas, Congress should finally pass the pending free-trade agreements with South Korea and Colombia, and re-enact trade promotion authority. And we should pass health care reforms that would empower consumers to make smarter medical choices and lead to more competition and lower costs.

Like most other states, Minnesota still faces its share of economic challenges. However, during my two terms as governor, we have dramatically slowed the growth of state government spending and moved the state out of the Top 10 in tax burden. In the current budget biennium, we actually reduced overall spending for the first time in the state’s 150-year history. It has not been easy in a liberal state such as Minnesota, especially during challenging economic times. But it’s possible with a balanced budget requirement, line-item veto authority, pro-growth policies and a lot of hard work and determination.

Ponzi schemes succeed because people want to believe in a free lunch as long as the easy money is rolling in. But a day of reckoning always arrives, and ours is right around the corner. The sooner we open our eyes, the sooner we can clean up this mess.

Tim Pawlenty is Republican governor of Minnesota.