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Most Americans seem to be pretty disgusted with the debt ceiling fiasco that the Washington political class imposed on us. Small time thinking, small time courage, small time approaches to solving this massive problem. In the end, they did not come close to solving the current $14 TRILLION national debt level, a level that is likely to go up TRILLIONS more in the next ten years. The political class may come up with about two TRILLION in debt reduction, less then 10% of what the national debt trend is.
And their fiasco and small time thinking continues. For well over two hundred years Congress has functioned pretty well in its current format and procedures. However, we have entered a period of time where we need a "Super Congress" to do the work of the entire Congress. This "Super Congress," is composed of six Senators and six members from the House of Representatives, six Republicans and six Democrats. This Super Congress is supposed to come up with $1.5 TRILLION in additional cuts beyond those in the debt ceiling agreement by Thanksgiving, cuts that will be voted on as one package by the whole Congress. The political class could not do their job the traditional way so they had to invent another way to minimize the damage to their own personal political careers by creating another level of government bureaucracy, Super Congress, that they can hide behind.
Given this incompetence, let me propose a three option approach that would minimize the importance of the political class. It is somewhat whimsical since the political class is highly unlikely to agree to the terms of this three step process. However, my proposed approach has a better chance of succeeding than this Super Congress concept since it requires politicians take a stand for all Americans to see how courageous they are or are not, and not allow them to cower behind the Super Congress facade.
The first option in the process involves some excellent work done by the Bipartisan Policy Center and their Debt Reduction Task Force. This task force was headed by former Republican New Mexican Senator Pete Domenci and Democrat Alice Rivlin, the original director of the Congressional Budget Office. They have come up with an excellent, in-depth analysis and proposal that would reduce Federal government debt by over $6 TRILLION. It is a balanced approach that recommends significantly more spending cuts than tax increases and does a pretty good job of spreading the pain across the entire country.
Given their detailed work, lets use their $6 TRILLION as the target for debt reduction. Lets also use the model that has worked in the past that the political class has used historically to duck its responsibilities. For example, when it was obvious that the country needed to reduce the number of military bases the military was operating, the politicians could not bring themselves to vote on individual bases since the politicians were deathly afraid that even though it might be the right decision for the nation, it might cost them a few votes.
Rather than endanger their reelection chances, the political class came up with the concept of the base closing commission that would take the heat for recommending what bases to close. The politicians set up a process where they could only vote for what the commission recommended in total, they could not change or cherry pick the commission's findings. Thus, they could hide behind what the commission recommended and what Congress voted on in total, not on individual bases.
The commission's recommendations were approved and the political class could go back to their districts and states, claiming they had no choice in a specific base closing, they did not have the power to keep a particular base open since it was part of the total recommendation.
Thus, rather than be put through what is likely to be another agonizing and ineffective Congressional process, skip the Super Congress step and force every Congressional member to give a thumbs up or thumbs down on the total recommendation from the Bipartisan Policy Center's task force recommendation. Given their history, it is highly probable that our politicians will not be able to come up with anything close to this proposal from a quality and detailed perspective. Force them to make a decision on the Bipartisan Policy Center's recommended plan and do not allow them to avoid their responsibilities.
That would be the first option and the preferred solution since it would get us past the partisan nickel and dime discussions and the grandstanding of every politician on every option and decision. However, if the political class did not want to go this route, they could go to the second option. This would repeat the process from the first step but rather than go with the Bipartisan Policy Center's $6 TRILLION debt reduction plan, let's substitute Obama's debt reduction commission's $4 TRILLION debt reduction plan.
The President put this commission in place and they did a fabulous job coming up with a comprehensive program that Obama, Pelosi, and Reid completely ignored. This step would bypass the obstacle that is Reid and Pelosi, who blocked any chance of the commission's recommendations reaching the floor of Congress. This option would force every politician to vote for the commission's work, yes or no. If the majority of Congress votes for the commission's work in total, it would become law.
The third option would get much more dramatic if the first two options fail to provide a real path to fiscal responsibility. This option would lock every member of the House of Representatives in one room and every Senator in another room. The politicians in each room would then vote on EVERY component of the Federal government, no matter how small, on whether that function, organization, strategy, tax loophole, etc., should be discontinued.
They would not be allowed to come out of that room until they approve $6 TRILLION in debt reduction. No cell phones, no computer access, just brute force review of all debt reduction options, regardless of how long it takes. I would allow only bread and water into the room but that might be a little too much over the top.
Once the House room comes up with their $6 TRILLION in reduction items and the Senate room comes up with their $6 TRILLION in reduction items, the two lists would be compared. Common items between the two lists would be considered approved for reduction. If the common reductions do not get to $6 TRILLION, the two groups would then go back into their respective rooms and repeat the process in another attempt to get to $6 TRILLION. This process would repeat itself until the $6 TRILLION was attained.
While I would be willing to pass on the bread and water issue, I would add two other conditions. First, no five week vacations until the process is done. In fact, not a single day vacation until the process is done.
Second, nobody in Congress gets paid until the process is done. In California, state legislators do not get paid if they are late delivering a valid state government budget. Under this process, nobody in Congress gets paid until the $6 TRILLION debt reduction target is attained.
Under this option, each politician can hide by the secrecy of the closed door sessions. A Republican can say they voted against tax hikes but they got passed anyway by their peers. A Democrat can say they tried to protect a useless social program but it got killed by the bigger group. This step, along with the first two options, plays right into the lack of courage of the political class, providing them air cover for their reelection while forcing a coherent debt reduction program.
Einstein once said. "We can't solve problems by using the same kind of thinking we used when we created them." We cannot solve our national debt problem by using the same, less than courageous political class and same dysfunctional political processes that got us into this mess. The debt ceiling debacle proves how right Einstein was. If I am willing to drop my bread and water demand, I demand that Pelosi and Reid drop their blockage of votes on these three options.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at http://www.loathemygovernment.com/. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
http://www.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com/
We originally planned to show the American political class how to effectively, efficiently, and least painfully cut TRILLIONS more dollars from the Federal government spending spigot than the recently signed debt ceiling agreement tries to do. However, I am going to put hat number laden post off until tomorrow and replace it with our monthly political class insanity update. This monthly feature scours various news sources to identify the crazy, wasteful inefficient, and sometimes dangerous actions and antics of the political class.
This post will set up tomorrow's detailed post on budget reduction. It is a good precursor since many Democrats in Congress are going out of their mind at the mere mention of cutting down the size of the Federal government. They act as if everything the Federal government does and everything they do is critical to the national well being, that there is absolutely no waste or unneeded parts of government, and how could any American even think about trimming or slashing government's size.
Please review the following political class insanity from just the past month or so and afterwards I think you will agree with me - cutting out the following waste and insanity would save taxpayers billions of dollars without any significant damage to any American voter's well being.
- Consider a recent newspaper article from the May 15, 2011 issue of the Washington Post regarding the Federal government's actions in the housing market:
"The Federal government's largest housing construction program for the poor has squandered hundreds of millions (of dollars) on stalled or abandoned projects and routinely failed to crack down on derelict developers or the local housing agencies that funded them...The result is a trail of failed developments in every corner of the country. Fields where apartment complexes were promised are empty and neglected. Houses that were supposed to be renovated are boarded up and crumbling eyesores in decaying neighborhoods ... The Post found breakdowns at every level."
This paragraph is courtesy of the July/August, 2011 Cato Policy Report. According to Cato, the article goes on for three more pages as it details the corruption and waste. The scary adjective from the Post report is "routinely," as if this goes on and on, year after year, billions and billions of dollars later.
Shouldn't someone be held accountable for such waste, either within the Federal housing entities or on the Congressional committees that are supposed to make sure this type of waste does not happen? Thus, this becomes the first of many examples of wasteful spending that needs to be plugged and the overall Federal budget reduced.
- A General Accounting Office report from April 12, 2011 addressed the financial literacy of Americans through a publication, "Financial Literacy: The Federal Government's Role In Empowering Americans To Make Sound Financial Choices." Given the recent debt ceiling fiasco and the $14.3 TRILLION national debt situation that led up to the fiasco, I would certainly not look to the Federal government as a beacon of financial literacy and an entity that makes sound financial choices.
This is like saying that Jabba The Hutt from Star Wars infamy is now your dietary advisor and physical fitness instructor, makes no sense. Kill ridiculous government projects like this along with the government resources that support them and bank the savings.
- According to a Washington Post article from May 15, 2011, Congressional sources have questioned Amtrak's management, inquiring, for example, how an Amtrak employee with an annual salary of $21,000 actually earned $149,000 in overtime pay in 2010's fiscal year. Huh? An employee earned more than seven times their base salary in overtime wages? While I understand how the math works, conceptually I cannot figure out how that computation is possible. I have to think there is some financial hanky panky going on in not only this case but in probably many other cases, hanky panky that usually means the taxpayer is footing the bill for some type of major inefficiency at Amtrak (and likely at other government organizations also.)
- According to an article in the May 5, 2011 issue of the Daily Caller, National Public radio (NPR) is paying a major lobbying firm big bucks to lobby and defend NPR's funding stream from Congress. Thus, taxpayer money is being spent on an outside lobbying firm to get more taxpayer money for the lobbyist's client, taxpayer supported NPR.
While this seems like an incredible conflict of interest and waste of taxpayer money, who is to say it could not happen elsewhere within the government, or maybe it does already, where a strictly government agency uses part of its taxpayer funding to hire lobbyists to get more taxpayer funding. An incredible, wasteful disgrace in so many ways.
- According to a short article from Time magazine that was summarized in the July 22, 2011 issue of The Week magazine, farm income in the U.S. was up 27% last year and is expected to rise another 20% this year despite the bad overall economic conditions. Another article in the July 29, 2011 issue of The Week magazine discussed how the traditional family farm was disappearing, being replaced by big business, corporate operations.
Federal farm aid does not usually go to the family farm, it is mostly another form of corporate welfare and a source of re-election campaign donors for incumbent politicians. The majority of government farm subsidies now go to farming operations with annual revenue over $200,000 and net worth of around $2 million.
Thus, given the corporate welfare aspect of farm subsidies today and the fact that farming is one of the few growth industries in America today, why would the American taxpayer still pay farmers subsidies? Kill the subsidies and bank the savings, the corporate farming organizations can live without this taxpayer windfall.
- An article in the August 5, 2011 issue of The Week magazine quoted a CNNMoney.com article on how the Federal government had sold its stake in Chrysler for a net loss of $1.3 billion. The Federal government still owns a 32% share of General Motors and is likely to lose more than another $10 billion on that deal unless the stock can miraculously rise to the low $50s per share, about a 60-70% increase from where it is right now.
This loss does not include a little known Federal government action that occurred during the GM bailout where the Federal government gave GM a tax break "gift" of about $14 billion. Thus, the taxpayer will end up losing anywhere from $25 to $30 billion as a result of the Federal government's clumsy and unneeded intrusion into the auto industry. How many other government screw ups are out there, given that the political class gave out hundreds of billions in bailouts to many different companies? The waste could be in the hundreds of billions of dollars.
- According to a New York Times article that was summarized in the August 5, 2011 issue of The Week, despite cutting $12 billion in costs over the past four years and eliminating more than 200,000 job positions in the past decade, the U.S. Post Office is still on track to lose $8 billion this year, the same amount it lost last year.
While someone in the Post Office should be commended for trying to fix a sinking ship, the effort was not enough to stem the red ink. This is just one example where the lack of problem solving skills by the political class is again likely to result in incremental billions of taxpayer waste to hold up a dying business model with no improved business model being developed.
- A recent article from the The Daily Beast was summarized in the August 5, 2011 issue of The Week magazine and pertained to the pirates from Somalia. Two years ago, President Obama, in conjunction with our European allies, promised to reduce the danger from piracy in the Indian Ocean and Arabian Sea.
They have not quite lived up to that promise since in the first six months of this year, attacks by Somali pirates hit a record high, with average ransom per ship rising from $150,000 in 2005 to over $5 million per ship today.
Why the failure to live up to the promise? First, the navies of ourselves and our European allies are tied up fighting the stalemated and ill-fated Libyan military action. Second, according to the article, 20% of the U.S. Navy's ships are not combat ready and half of the Navy's air fleet is in disrepair. This is a disgrace. The American taxpayer pays over $600 billion a year, year in and year out, and one out of five Navy ships are not ready and 50% of its planes cannot operate? What have we been paying for all these years? Talk about wasting taxpayer money, for $600 billion a year, the political class has to ensure that we have a top notch, fully functional defense corps. Anything less is a waste, dereliction of duty, and a shame.
- Recent news reports have described how Congress, specifically the Democratic-controlled Senate, has not been able to come up with an agreeable funding plan for the Federal Aviation Agency even though the Republican-controlled House of Representatives has already passed a bill that the President says he will sign. This has resulted in 4,000 government employees being furloughed and more importantly, the Federal government not being able to collect millions of dollars a week in airline government fees.
Thus, rather than solve a problem, the Senate would rather squander more than a $200 million dollars a week in lost fees. Adding insult to injury, the flying public does not see the benefit of the fees not being collected, many of the airlines are still collecting the fees but keeping the fees for themselves. Another blatant example of not being able to manage a rationale, problem solving process in the Senate, resulting in the American taxpayer again getting the short end of the stick.
- Finally, let's go back to the housing collapse from a few years ago that was a main driver of the Great Recession. Despite spending TRILLIONS of dollars over the years to operate, support, and staff the SEC, HUD, FDIC, the Federal Reserve Board, the Treasury Department, Fannie Mae, Freddie Mac, Senate committees and subcommittees on housing, House of Representative committees on housing, and probably other government agencies on housing, not one of them foresaw the disaster that was the housing market and subprime lending bubble that devastated the economy.
That does not mean it was not foreseeable. A Business Week article from June 13, 2011 described how the co-founder of Pimco, a trillion dollars plus investment fund, was not only able to predict what was going to happen but also minimize its impact on the fund.
Bill Gross of Pimco wrote the article and described how there were inklings of a housing problem as early as 2006. What did he do? He took ten of his forty credit analysts, each of whom covered major companies throughout the country, and sent them around the country, pretending they were would-be home buyers moving into the area. Each got a specific area and were told to visit their own area two to three times a month for two years.
What did these ten recon people find out? Namely, that the real estate industry was dealing with bogus mortgage loans and dangerous lending practices such as no down payment mortgages and no income check mortgages. Gross says the findings of these ten people were shocking. As a result of ten people and the market intelligence and reality intelligence they provided, Pimco was able to minimize its exposure and losses.
Ten people, with just some travel money and time, were able to do what thousands of Federal employees with billions in resources could not do, namely identify a problem and its root causes, take action, and avoid a disaster. Unfortunately, the political class does not have these skills and it cost Americans dearly from an economic perspective, a cost still being incurred today.
These are the latest examples of our political class insanity. Lost tax opportunities, disasters not averted, government organizations that are so broken that they lose billions of dollars year in and year out, unnecessary bailouts that cost billions, favorable tax and subsidy deals that are not needed, fraud and waste in housing and other government entities, and useless brochures and reports.
Lets face it: the Federal government is not a finely tuned computer, it is a broken abacus. There are so many opportunities to fix what is broken that no rational person should be able to rant that cutting Federal spending will cut to the basic bone of government functions. There is way too much fraud and waste sitting on top of that bone, waste and fraud that needs to be trimmed aggressively so that government can focus on far fewer things but be far more effective on the vital basics of its responsibilities.
We just need to fix our political processes so that we replace the current set of politicians with a new set of people that know how to dissect a problem, identify root causes, and have the courage to implement the solutions, traits sorely lacking in Washington today. Given this context of waste, tomorrow we will review the numbers that show how to cut waste without cutting bone.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at http://www.loathemygovernment.com/. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
http://www.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com/
Just when you thought the American political class could not stoop any lower or act any more in incompetently, along comes the debt ceiling crisis and we are all amazed that again, the political class has failed to exceed any standards of quality performance. And, as always, its the citizens of this country and the nation itself that gets dissed and abused. Getting "dissed" is certainly the right word when you consider the following apt adjectives to describe this fiasco:
Disallusioning - The characters in the White House and Congress out did themselves when it came to embarrassing themselves and the nation in the eyes of the world. The whole process was so disillusioning when viewed from a problem solving process since there was no process. There was no plan, there was no analysis, there was just a chaotic lurching towards the eventual deal.
How can you think you can competently run a country with over 300 million people, a massive government bureaucracy, and an economy worth over $14 TRILLION when you cannot even maturely and intelligently address a singular budget issue? So disillusioning.
Disgusting - There are many people in this country that honestly and intelligently believe that the national debt crisis is one of the few issues in our country's history that has a credible chance of destroying our nation, our democracy, and our future. Many of them made their concerns known by voting for and electing dozens and dozens of people to the House Of Representatives last November to represent their heartfelt fears and concerns. This is their right and duty as American citizens living in a democratic nation.
And how were their elected House Representatives treated when the debt ceiling debate was raging? Senate Majority Leader Harry Reid publicly called those who opposed a meager early version of the debt ceiling deal "extremists." House Minority Leader Nancy Pelosi publicly told John Boehner to act like an adult after a meeting at the White House. In a Democratic party meeting, Congressman Mike Doyle accused those in favor of getting out-of-control government spend under control "terrorists: "We have negotiated with terrorists. This small group of terrorists have made it impossible to spend any money." Isn't that what one should do if one was spending way too much? Pretty simple concept, Congressman Doyle.
These attitudes are disgusting and despicable on any number of levels. While Reid, Pelosi, people like Doyle, and Obama have been in charge of the White House and Congress, they have incurred over $5 TRILLION worth of national debt and we have nothing to show for it. $5 TRILLION is extremist by any measure of spending, whether it is total spending or out-of-control spending as a percentage of the nation's GDP. I contend their extreme damage to our national debt and economy, under their watch, make these people the real extremists and certainly not adults. Adults would have done a much better budget management job than the job Pelosi and Reid did.
And the worst name calling was by Doyle. To associate House members, who are representing their constituents to the best of their ability, with terrorists that murder, torture, and terrorize innocent people is the lowest of low when it comes to political rhetoric. It has absolutely no place in any kind of adult political discussion. It contributes nothing to a viable solution to any of our problems and certainly did not contribute anything positive to this meager debt ceiling deal. Disgusting.
[Side notes to the "terrorist" statement. Numerous news reports, quoting several sources (i.e. more than one source) who were actually in that meeting, concur that Vice President Joe Biden also contributed ot the "terrorist" language, reportedly stating that these House Of Representative members "have acted like terrorists." Several days after the reports, Biden's office denied that he mentioned anything like these words, despite the observation of several at the meeting. For the first time in his tenure in the White House, Obama spoke out and chided those that carelessly toss around words like "terrorists." Doyle does not deny he stated the characterization. Thus, there are conflicting stories of whether or not the Vice President stooped as low as Doyle.]
Dismal - Despite the teeth gnashing, the embarrassment of the country in the worlds' eyes, the inability to execute a credible problem solving process, and the degeneration of the Democratic Party leaders into kindergarten level name callers, the end product of the fiasco is not much better than dismal. The agreement calls for the Federal government to reduce out-of-control spending by about $2.5 TRILLION over the next ten years.
However, let's do a little math:
- The current Federal government national debt level is about $14.3 TRILLION.
- Obama's long range budget, that he submitted in the spring, called for the Federal government to add an additional $9 TRILLION to the national debt level.
- Thus, without changes to the Obama's long term budget plan, the national debt is estimated to grow to over $23 TRILLION in the next ten years, the equivalent of over $200,000 per U.S. household.
- This meager debt ceiling agreement would theoretically reduce the country's national debt to $20.5 TRILLION or about $178,000 per household.
Obviously, either number, with or without this settlement, is a dismal disaster for America and for America's families. The country will not be able to handle such massive debt no matter how much Obama wants to tax the rich and close tax loopholes. The numbers, even with this agreement, are still overwhelming despite any "solutions" the White House has proposed. Dismal.
Disappointing - Despite all of the ugliness that was incurred during the past few weeks, it probably will not make any difference when it comes to the dreaded downgrading of America's debt rating by the major credit agencies:
1) Last week in a Bloomberg News report, Standard and Poor's (S&P) chairman, John Chambers, issued a video that stated how much the political class needed to reduce government spending: "$4 TRILLION wold be a good down payment. A grand bargain of that nature would signal the seriousness of policy makers to address the fiscal situation in the U.S." In other words, the $2.5 TRILLION that was agreed to is not even a good down payment on debt reduction in the eyes of a major credit ratings agency.
S&P has given a top rated AAA ranking to U.S. government debt since 1941, through world wars, smaller wars, recessions, and various political antics in the White House and Congress. But the current set of politicians may be able to do what all other politicians before them could not do: get U.S. debt downgraded.
Chambers went on to say that "The $4 TRILLION, depending on whether it's front loaded or back loaded, is not going to do the trick in terms of stabilizing the U.S. government debt to GDP ratio. But it takes you pretty far along."
2) One of the most respected investors in the country, Pimco Co-Chairman Bill Gross, has publicly stated that the deal will not eliminate the danger of a credit ratings downgrade: "Eventually there's a downgrade coming, it just depends on Moody's, S&P, and Fitch and they're very slow moving."
Gross went on to state the obvious: the total, unfunded liabilities of the United States, Social Security, Medicare, and Medicaid, puts the country among the most debt-laden countries int he world. He feels that the debt load and crisis has had negative impacts on the country's economic growth, interest rates, and financial markets.
3) Bill Nuti, who is the CEO of NCR, warns that: "a downgrade to the U.S. credit rating will have widespread deleterious effects. Our economy will transition from a slow growth scenario to a no growth scenario and we could likely find ourselves in a double dip recession."
4) One would have thought that once the debt ceiling agreement was signed and some uncertainty from the world removed that the stock market would respond favorably. However, that is not what happened:
- The day after the agreement was signed, the Dow Jones Industrial Average was down well over 200 points, down 2.2%. The Dow is down 6.7% in just the past eight days.
- Every one of the companies in the Dow Industrials average was down the day after the signing.
- The S&P 500 dropped 2.6% after the signing while the NASDAQ was down 2.7% in one day. The Russell 2000 index of small businesses was down 3.3%.
4) The price of an ounce of gold went up 1.4% to $1645 an ounce on news that the agreement had been signed while domestic stock prices dropped substantially.
Thus, the people that depend on knowing and understanding the econcomy and financial markets have shown their disdain for the agreement by fleeing the domestic stock market for other, safer investment options. Disappointing.
Disillusioning, disgusting, disappointing, and dismal, no mater how you cut it, we have been dissed by the debt ceiling situation, the debt ceiling childish name calling, and the final debt ceiling agreement. While this agreement has slowed down the row boat as it heads for the waterfalls, it has not stopped the forward progress towards those fatal falls.
Much work still has to be done and if the childish, immature, cowardly, and shallow behavior and analysis of the political class that was exhibited during the past few weeks is any indication of future behavior, we are still in critical condition. As a result, tomorrow we will take a look at a detailed way to reduce government spending, not by a meager $2.5 TRILLION, but by three or four times that much without fear mongering like Obama has done over the past month. I believe that the Federal government can get its financial house in order without starving the poor, bankrupting the needy, and leaving the country defenseless.
No more dissing, let's start respecting and problem solving before a much larger financial and economic fiasco envelopes the whole country. That would be the ultimate DIS.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at http://www.loathemygovernment.com/. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
http://www.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com/
I usually do not post on the weekends, I need those two days to detox my attitude and feelings about the American political class. However, the travesty that is the debt ceiling negotiations in Washington and the disgust they generate for me personally are too much to ignore this weekend.
As most informed Americans know, we are now only a week away from a potential financial disaster. Theoretically, if the government does not raise the country's debt ceiling by August 2, the country could end up defaulting on its financial obligations. This has never happened before so the ramifications are unknown. However, nobody thinks they will be any good.
The most serious, likely outcome is that the government will run short of money which could impact all or some of its functions but is highly likely to result in the credit agencies' downgrading of the nation's credit worthiness and increase borrowing costs. Since the political class and the government it runs borrow $.40 for every $1.00 it brings in, those increased borrowing costs could be very, very large.
Given the dire consequences, one would think that every possible thing was being done to avoid this calamity. Far from it. The five main culprits in this game of politics, Obama, McConnell, Reid, Pelosi, and Boehner, met this morning for less than hour. Less than an hour, unbelievable! The political class is proving again that they exist only for their own personal political careers and personal political agendas, the good of the of country be damned. They continue to prove they cannot solve any problem, no matter how small or large. Let me repeat, financial disaster ahead and they met for less than an hour.
Given their inabilities and immaturity, let me lay out four steps that need to be implemented immediately in order to have any chance for the country to survive these fools:
- Step 1 - Whenever a company and its union reach and impasse and the clock is ticking towards trouble, what do they usually do? Easy question, they lock themselves in a room, do not leak out any information, and FOCUS on solving the problems they jointly face. Food and beverages are slipped under the locked door and no one comes out until a deal is struck. They do not meet for less than an hour and then leave. Lock the door, throw away the key if necessary, and do not let them out until a deal is reached, regardless if they have to stay cooped up with each other for days with no press conferences, no leaks, no cell phones. That is how real people solve these types of problems in the real world.
Thus, I would consider two lock down scenarios. The first one would lock down the five people listed above in a room until a deal is done, written down, and agreed to. If that cannot happen, then Obama and the 535 members of Congress should be put in a room and they all get locked down until a deal is done. Same criteria: no leaks, no press conferences, no cell phones, nothing until a deal is done and the vote is taken. Anything less than these types of lockdowns is a betrayal of the country.
- Step 2 - in parallel, contingency plans need to be put into place in case a deal is not reached in time. Any such plan should contain a set of prioritized expenditures that would allocate funds to these priorities. Remember, the government is not necessarily going broke on August 3 if a debt ceiling deal is not reached. On a unit basis, while it may not be able to spend $1.40, it will still be receiving a $1.00 going forward. Thus, about 30% of the government's spending would be curtailed rather quickly. The other 70% would then have to be spent on only the essentials that I would list out as follows:
- Pay off Treasury debt as it comes due in order to protect the high credit rating of the country.
- Pay out Social Security checks.
- Pay out Medicare and Medicaid bills.
- Pay out the military's pay checks and expenses as needed.
These four expenses are essential to support the very basic, essential needs of the country. Any left over money would then be used to pay other government expenses. However, in order to start getting under that $1.00 revenue stream, the following steps would need to be taken immediately in order to protect the above four essential expense streams:
- The vast majority of Federal employees would be immediately put on non-paid furloughs. The only Federal employees that would stay on live payroll would be those that service the above four expense streams. Two winters ago, Washington D.C. was snowed in for a week and the government was shut down. We survived that government shutout in fine shape, another short one now would not be a problem for the country either.
- All national parks and national museums would be closed unless they could be staffed with nonpaid volunteers.
- All other government discretionary expenses would be halted immediately.
- All members of Congress and the President would have their pay checks suspended until the crisis was solved. California has a similar process where if the state government politicians cannot deliver a budget on time, the lawmakers lose their salary until the budget is in place. Same thing should apply to Congress and Obama. Screw up your job responsibilities as badly as you have on this issue and you should not be paid until you fix the issue.
The country will not go bankrupt if a deal is not reached, it will just have to go on a severe diet. The above priorities and expense reduction ideas are what is needed to make sure the diet does not turn into a fast. Unfortunately, do we really think these people are capable of thinking about contingency plans, never mind implementing them?
Step 3 - Nancy Peolis needs to just shut up. Her biting, sarcastic, and useless comments and insults, as always, in today's paper that Boehner needs to "have an adult moment" will do absolutely nothing to solve this crisis. I would counter her childish remarks by saying if the President had acted when he should have, years or months ago, and had one of his few adult moments, we would not be in this crisis mode today. Insults at this stage of the game do no good at all but this type of destructive behavior is to be expected by a pure politician like Pelosi.
Step 4 - All of these people need to just go away. They have long been a disgrace to the country and now they are a mortal danger to the country. They are not problem solvers, they are not leaders, they are not good for the nation, they are just useless political animals. In November, 2012, they all need to go away and be replaced by people that are civil, dedicated, smart Americans that can anticipate a crisis before it becomes a crisis, unlike what we are stuck with today.
Sorry for the rant today but come on, this whole issue and the juvenile behavior of everyone in Washington is a disgrace, pure and simple. Lock them all in a room until this deal is done, plan for contingencies, muzzle Pelosi, and start working for their political defeat in 2012. How much simpler could it be.
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