So, I know that in my last couple of blogs I've done some serious Obama bashing. I mean, when the man is not afraid to say the most audacious things, it provides plenty of fodder to bash. However, as the title indicates, I'd like to provide a more reasonable view on what's happening in Congress, and what I think needs to happen.
Politics is politics is politics. I've made no secret that, as many of you may have guessed already, I am a Republican. Not only am I a Republican, but if there is truly a split in the Republican party, then I would side more with the Tea Party. Having said that though, I also pride myself on being a realist.
If the Tea Party had it's way, then there would be no increase of the debt ceiling whatsoever, all the deficit would be made up with spending cuts, there would be no tax increases, and, on top of everything, Obamacare would be repealed. Although all those things may be what's best for the country, they just are not going to happen during this Administration. I think a bill that had even 2 out of the 4 of these things would have a hard time passing the House, would probably not get past the Senate, and would probably get vetoed by Obama anyway.
At the time of this writing, the House is getting ready to vote tomorrow on "Cut, Cap, and Balance", which even if it got past the Senate, which is very doubtful, President Obama has already said, although it hasn't even been completed and without drafting his own proposal, that he will veto it as soon as it hit his desk. I applaud the Republican's drive to get something down on paper to vote on. However, I get a sense that it's a waste of time.
I hate to admit this, but I think that the Democrats have played their cards well. I think it was intentional too. They are going to wait until the last minute, they are going to propose a deal that contains 90% of what they want, and they are going to give the Republicans no choice but to pass it. If the Republicans can somehow vote it down, then they are going to be blamed for any negative reprocussions as a result of not raising the debt ceiling before the deadline.
Like I said, I applaud the Republicans, particularly the Tea Party, for making a stand and to this point being unwavering. However, I believe that when you are so unwavering that it results in no action, and that lack of action has negative consequenses. Those negative consequences can be worse than a compromised plan of some sort. Believe me, I don't want to see Obama get his way, but I also don't want to see Obama re-elected in 2012 either. That really would be the end of the world. :)
The Republicans have put up the good fight, and their voice has been heard. There are more Americans aware now of just how bad our debt situation is, and those Americans are going to want change eventually. The Democrats, following their President, have made it clear that they are not going to pass any kind of legislation that the Republicans would support.
Republicans need to just cut their losses, minimize the damage, get something passed that will get us to the 2012 election, and then put as much, if not more, fight into the 2012 election as they did into this debt debate.
Tuesday, July 19, 2011
Friday, July 15, 2011
The Debt Ceiling - Part 2
I mentioned in my last blog that I was scared of the President, but that's not entirely true. Baffled, flabbergasted, annoyed, confused, and appalled by may be a better way to express my views. After his press conference today, I felt the need to vent again.
First, let me start with Obama's interview on CBS from a few days ago. In that interview, the President stated, "I cannot guarantee that those (Social Security) checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it." This, in my opinion, is one of the most outlandish quotes that any President has made.
If you haven't figured it out already, which is what Obama is banking on, let me explain. It is the job of the Treasury department to take in revenue and disperse funds. The Treasury takes in approximately $200B/mo in revenue. The cost of Social Security is approximately $49B/mo. Now, regardless of whether or not we pass legislation to raise the debt ceiling, that revenue still comes in. It is the job of the Secretary of Treasury to determine how that revenue is dispersed, and who do you think the Secretary of Treasury was appointed by and takes his orders from? That's right! The President of the United States. Obama is, in a sense, shaking his finger in the face of the American people and saying, "You do what I want, or I won't pay you!"
The President's press conference today was much along the same lines, although maybe not quite as audacious. I don't have the exact quote, but he basically said that if we didn't raise revenue (taxes) that interest rates for millions of Americans would go up, effectively putting a tax increase on the American people anyway. Like so many Obama statements recently, this simply isn't true.
I used the example in my last blog of the average American family, so I'll continue with that. If a family has debt to income ratio problems, is late on their payments, or simply don't make their payments, then their credit rating goes down. The next time this family applied for a new loan, then, if approved, would probably pay a higher interest rate than a family who prioritizes their spending and balances their budget, as they should. In addition, those families with triple A credit ratings, will always be able to get the best available interest rate available regardless no matter where the Prime rate is.
Now, the few things that I see wrong with the President's statement from today. If America defaults on our obligations, then it's true that it would have a negative effect on our country's credit rating, but keep in mind that it is the Federal Reserve that sets the Prime rate, which is what major lenders set their interest rate by. The reason why the Prime rate is at one of the lowest points that it's been in history is because they are trying to boost the economy, which given the current economic situation, it makes sense. However, are the Prime rate and our Nation's credit rating one in the same? If the Nation was to default on our debt to say, China, would that mean that the Federal Reserve would automatically be required to raise the interest rate? To me again, it sounds like President Obama is saying, "If you don't let me raise taxes, then the Fed is going to raise interest rates, and you're going to be taxed anyway."
The conservative members of Congress have been saying all along that they can handle the debt crisis with spending cuts and closing tax loopholes that would generate additional revenue without raising taxes. They are even working on legislation now that would not only cut spending but would raise the debt ceiling (one more time), which is what the President wants and is what the whole crisis is about in the first place. I also mentioned in my last blog that there was an awakening going on in America. I just hope the American people can start to listen to what Obama is meaning and not what he is saying.
First, let me start with Obama's interview on CBS from a few days ago. In that interview, the President stated, "I cannot guarantee that those (Social Security) checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it." This, in my opinion, is one of the most outlandish quotes that any President has made.
If you haven't figured it out already, which is what Obama is banking on, let me explain. It is the job of the Treasury department to take in revenue and disperse funds. The Treasury takes in approximately $200B/mo in revenue. The cost of Social Security is approximately $49B/mo. Now, regardless of whether or not we pass legislation to raise the debt ceiling, that revenue still comes in. It is the job of the Secretary of Treasury to determine how that revenue is dispersed, and who do you think the Secretary of Treasury was appointed by and takes his orders from? That's right! The President of the United States. Obama is, in a sense, shaking his finger in the face of the American people and saying, "You do what I want, or I won't pay you!"
The President's press conference today was much along the same lines, although maybe not quite as audacious. I don't have the exact quote, but he basically said that if we didn't raise revenue (taxes) that interest rates for millions of Americans would go up, effectively putting a tax increase on the American people anyway. Like so many Obama statements recently, this simply isn't true.
I used the example in my last blog of the average American family, so I'll continue with that. If a family has debt to income ratio problems, is late on their payments, or simply don't make their payments, then their credit rating goes down. The next time this family applied for a new loan, then, if approved, would probably pay a higher interest rate than a family who prioritizes their spending and balances their budget, as they should. In addition, those families with triple A credit ratings, will always be able to get the best available interest rate available regardless no matter where the Prime rate is.
Now, the few things that I see wrong with the President's statement from today. If America defaults on our obligations, then it's true that it would have a negative effect on our country's credit rating, but keep in mind that it is the Federal Reserve that sets the Prime rate, which is what major lenders set their interest rate by. The reason why the Prime rate is at one of the lowest points that it's been in history is because they are trying to boost the economy, which given the current economic situation, it makes sense. However, are the Prime rate and our Nation's credit rating one in the same? If the Nation was to default on our debt to say, China, would that mean that the Federal Reserve would automatically be required to raise the interest rate? To me again, it sounds like President Obama is saying, "If you don't let me raise taxes, then the Fed is going to raise interest rates, and you're going to be taxed anyway."
The conservative members of Congress have been saying all along that they can handle the debt crisis with spending cuts and closing tax loopholes that would generate additional revenue without raising taxes. They are even working on legislation now that would not only cut spending but would raise the debt ceiling (one more time), which is what the President wants and is what the whole crisis is about in the first place. I also mentioned in my last blog that there was an awakening going on in America. I just hope the American people can start to listen to what Obama is meaning and not what he is saying.
Thursday, July 14, 2011
The Debt Ceiling
So, my first blog. As you can probably tell by the title, it is the recent events going on in the country that has finally inspired me to start a blog. Although I don't intend for this blog to be completely political, I need an outlet to express my views. So, without further ado:
As I write this blog, the debate over raising our Nation's debt ceiling rages on and talks with the President once again ended no closer to any solution, and like many Americans, I am both excited and scared by what's coming in the near future. What I'm excited about is that there seems to be an awakening going on in the country. What I'm scared about is....well, quite frankly, the most powerful man in the US government.
When talking about debt, let's take the example of an average American family. An average family with a house payment, a couple of car payments, a couple of credit cards, and the other normal household expenses has a decent amount of debt, but usually has more income than expenses. Then, circumstances may change, both intended and unintended. They may have gotten a bigger house because they have a couple of kids. They may have traded in the economy car for a minivan. The economy starts to go down, and gas prices go up, which causes groceries to go up. The President pushes through health care reform that causes their insurance premiums to go up. They transfer credit card balances to take advantage of balance transfer deals, and then they charge up the original cards. Pretty soon, they realize that the no longer have enough income to cover the expenses that they have.
For an average family that gets into that situation, there are a couple of options. One option is bankruptcy. However, most responsible families want honor their debts and protect their credit rating. So what do they do? What they don't do (or shouldn't) is go out and get another credit card, or trade in their car for a more expensive one. They send an extra $50 on their bills instead of going to the movies, they buy the 10 pound jug of Folgers at Sam's Club instead of stopping in at Starbucks everyday, and if possible, they refinance their house to lower the payment. In short, they cut spending and prioritize what needs to be paid.
Wouldn't it make sense to handle the National debt the same way? For the United States, bankruptcy is not an option, especially considering the fact that it is the US dollar that is the basis for the global economy. In order to pay what needs to be pay, we have to either raise revenue (taxes) or cut spending. As conservative as I am, I'm actually not completely opposed to trying to raise additional revenue, just as I would go out and get a 2nd job if my household income was not enough to cover the household expenses. However, my first priority, as I think the Nation's should be, would be to cut spending down to the bare bones. I don't understand how you can spend trillions of dollars to bail out financial institutions, corporations, the housing industry, and the economic stimulus plan, all of which did not have the desired effect on the economy, and then turn around and tell the American people that, although we're still in the midst of tough economic times, they need to pay more in taxes to not only cover all these expenses but continue to fund the over bloated Government that is fraught with wasteful spending as well as the ridiculous Obamacare plan, which not only may turn out to be unconstitutional, but the majority of Americans don't want anyway. I would gladly accept an increase in taxes, if I knew those taxes were going towards paying off our debt to say, China. What I don't want is for my tax dollars to go towards giving someone a $50,000 grant to pay down their mortgage on a house that they couldn't afford in the first place, but were able to get by funding through Fanny Mae or Freddie Mac.
I mentioned that there seems to be an awakening in the country. I think people are starting to realize that you can't continue to borrow in order to pay the debts that you already have. To me this is evident in the support that the Conservative members of Congress are getting as they fight against raising the debt ceiling. I just hope they continue to stand firm and use this as an opportunity to address the way Government spends our money.
More to come.
As I write this blog, the debate over raising our Nation's debt ceiling rages on and talks with the President once again ended no closer to any solution, and like many Americans, I am both excited and scared by what's coming in the near future. What I'm excited about is that there seems to be an awakening going on in the country. What I'm scared about is....well, quite frankly, the most powerful man in the US government.
When talking about debt, let's take the example of an average American family. An average family with a house payment, a couple of car payments, a couple of credit cards, and the other normal household expenses has a decent amount of debt, but usually has more income than expenses. Then, circumstances may change, both intended and unintended. They may have gotten a bigger house because they have a couple of kids. They may have traded in the economy car for a minivan. The economy starts to go down, and gas prices go up, which causes groceries to go up. The President pushes through health care reform that causes their insurance premiums to go up. They transfer credit card balances to take advantage of balance transfer deals, and then they charge up the original cards. Pretty soon, they realize that the no longer have enough income to cover the expenses that they have.
For an average family that gets into that situation, there are a couple of options. One option is bankruptcy. However, most responsible families want honor their debts and protect their credit rating. So what do they do? What they don't do (or shouldn't) is go out and get another credit card, or trade in their car for a more expensive one. They send an extra $50 on their bills instead of going to the movies, they buy the 10 pound jug of Folgers at Sam's Club instead of stopping in at Starbucks everyday, and if possible, they refinance their house to lower the payment. In short, they cut spending and prioritize what needs to be paid.
Wouldn't it make sense to handle the National debt the same way? For the United States, bankruptcy is not an option, especially considering the fact that it is the US dollar that is the basis for the global economy. In order to pay what needs to be pay, we have to either raise revenue (taxes) or cut spending. As conservative as I am, I'm actually not completely opposed to trying to raise additional revenue, just as I would go out and get a 2nd job if my household income was not enough to cover the household expenses. However, my first priority, as I think the Nation's should be, would be to cut spending down to the bare bones. I don't understand how you can spend trillions of dollars to bail out financial institutions, corporations, the housing industry, and the economic stimulus plan, all of which did not have the desired effect on the economy, and then turn around and tell the American people that, although we're still in the midst of tough economic times, they need to pay more in taxes to not only cover all these expenses but continue to fund the over bloated Government that is fraught with wasteful spending as well as the ridiculous Obamacare plan, which not only may turn out to be unconstitutional, but the majority of Americans don't want anyway. I would gladly accept an increase in taxes, if I knew those taxes were going towards paying off our debt to say, China. What I don't want is for my tax dollars to go towards giving someone a $50,000 grant to pay down their mortgage on a house that they couldn't afford in the first place, but were able to get by funding through Fanny Mae or Freddie Mac.
I mentioned that there seems to be an awakening in the country. I think people are starting to realize that you can't continue to borrow in order to pay the debts that you already have. To me this is evident in the support that the Conservative members of Congress are getting as they fight against raising the debt ceiling. I just hope they continue to stand firm and use this as an opportunity to address the way Government spends our money.
More to come.
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