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Title: Tea Party Zealots Scare McConnell Straight On Debt Limit
Source:
FORBES
URL Source: http://blogs.forbes.com/beltway/201 ... onnell-straight-on-debt-limit/
Published: Jul 15, 2011
Author: Howard Gleckman
Post Date: 2011-07-15 19:48:13 by Brian S
Keywords: None
Views: 13987
Comments: 32
Let me see if I have this right: Senate Republican Leader Mitch McConnell (R-KY) has effectively embraced the debt limit plan first offered months ago by President Obama. Under the McConnell/Obama scenario, Congress would extend the government’s borrowing authority through next year without agreeing to a dime’s worth of spending reductions or tax increases. As the deadline for action nears, the partisan rhetoric heats up, and the consequences of Congress’s failure to increase the debt limit become clearer, senators of both parties seem to be climbing aboard McConnell’s do-nothing-and-get-out-of-town bandwagon. But the tea party House Republicans are spitting mad. And Obama, who senses new political advantage on the deficit issue, is publicly cool. Somehow, the president, who spent his first two-and-half years in office studiously ignoring the deficit, has now become Fiscal Hawk-in-Chief. McConnell’s proposal is devilishly complicated, with its multiple congressional votes, supermajority requirements and, perhaps, creation of another bipartisan deficit reduction panel (oh, the forests that give their lives for budget commissions). Why would McConnell, who a week ago was demanding steep spending cuts as his price for extending the debt limit, now abandon the field without getting any reductions at all? Mostly, I think, because the tea party is scaring him half-to-death. As he candidly acknowledged yesterday, McConnell fears a default would destroy the GOP brand. But the veteran lawmaker also seems to have recognized the severe economic consequences of the government defaulting on its obligations. In a new report, the Bipartisan Policy Center does a careful day-by-day cash flow analysis of what would happen if the government exceeds its borrowing authority on Aug. 2. And the results are frightening. From Aug. 3-31, the government would have to reduce spending by $134 billion. That is to say, it would pull $134 billion out of the economy in just 29 days—more than 10 percent of monthly GDP. The economic effects at a time of 9 percent unemployment would be catastrophic, even if the bond market did not demand higher interest rates on Treasury debt—which it very likely would. The BPC looked at what would happen if the government tried to preserve its bond rating by paying the $29 billion in interest it will owe on Treasury securities in August, and prioritized the rest of its spending. You might call this the Bachmann model of governing. Such a step would leave only about $143 billion to pay $277 billion in non-interest bills. Let’s say Obama paid Social Security, unemployment, and veteran’s benefits, met the military payroll, and kept the courts and the FBI running. Those programs alone would take up about $70 billion, leaving only $73 billion to run the rest of government. With those remaining funds, Washington would have to make some exceedingly unpleasant choices: It could pay doctors, hospitals, nursing homes, and home health agencies what it owed for Medicare and Medicaid services, but that would cost $50 billion and leave just $23 billion to pay all other bills—everybody from defense contractors to senior day care center operators to disaster relief. And keep in mind that these are for goods and services the government has already bought. Sure, McConnell sees some political advantage in forcing Obama and the Democrats to increase the debt limit unilaterally (I can see the attack ads now). But mostly, he seems very worried about the real world consequences of a fiscal train wreck in part of his own making. And it looks as if he’s looking for a way to stop the locomotive.
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#1. To: Brian S (#0)
So Forbes labels them Zealots because they want to do something about the debt problem? That's nuts.
Factcheck.org: Spending isn't "out of control", it is falling relative to GDP. It's revenues stupid.
"Thats because your basically and idiot." If you say so. Did you say the same when Reagan was president?
I've posted the facts before. While you aren't as dumb as Goobershit, you are as stubborn as loonymom. It's maddening. Here are the facts once again: Federal spending and taxes as a percentage of GDP: The problem is spending. PERIOD. The government is spending more money that at any time since we were in WWII. Yes, taxes revenues are a little low, but that's because we are in a horrible recession.
Reagan raised taxes 11 times, you know that, right?
"Thats because your basically and idiot." Maybe you didn't read what I posted? For this fiscal year federal spending is down to 24% of GDP. Spending relative to GDP is falling, but not as fast as revenues. At the state level things are a lot different, and government spending is falling quickly among state/local governments. Do you ever ask yourself why with record low taxes, massive cuts in state / local spending, and large reductions in government workforces around the country over the last year, the economy isn't booming right now?
"Thats because your basically and idiot." Which is still 20% above historic rates. The conclusion you reached is that "revenues" are the problem. That's incorrect from a perspective of the last 65 years.
But falling, so why aren't we seeing a massive economic boom? Again, look at the chart, taxes relative to GDP are at historic lows. Bring them back in line with historical averages and you'll see a massively reduced deficit. You are aware, I assume, that if Congress simply lets the Bush tax cuts expire, stops patching the AMT, and stops passing the Medicare doctor "patch" each year, the budget will be balanced in less than 10 years.
"Thats because your basically and idiot." Interesting post...thanks.
I ask myself that every day. The answer is clear. Business owners are scared to death that the most anti-business President in our lifetime will foist new regulations, taxes, and control on them. So, they are not willing to risk their capital making new investments in innovation and productive capacity. Every single survey of businesses demonstrates this. But the lunatic left just doesn't listen. They are too caught up in the notion of punishing successful people to understand that doing so hurts everyone.
LOL. Falling how? Oh 25% last year a bit less than 25% this year. Thank the GOP House for that minor miracle. Image if Nancy Pelosi were still in charge.
Because of the recession. They are nowhere as low as the historic post-WWII spending highs. Cut spending to 19% of GDP, where it was when Clinton left office. Then we'll talk about taxes, if needed.
Reagan cut the top margin tax rate from 70% to 50% and then from 50% to 28% (with the help of Democrat Senator Bill Bradley). Obama's debt commission proposed lowering the top marginal tax rate to 23%. The top marginal tax rate is what counts if you want to provide the right condition for economic investment and development. If we want to be competitive in the world, it should be no higher than 17%.
they also proposed closing loopholes and eliminating credits with a net result of raising revenues. However, the tea party/norquist bloc won't let the GOP consider doing what Reagan did, raising revenues to reduce the deficit.
"Thats because your basically and idiot." didn't the top rate fall under Bush? Care to compare job growth under Bush and Clinton (who raised taxes)? How many more examples do you need before accepting the fact that cutting top tax rates doesn't spur economic growth. What spurs growth is demand, not supply.
"Thats because your basically and idiot." the net result would be further reduction in revenues as a result of negative economic impact of the cuts. Here's the CBO's take: Again, it's revenues stupid: "Thats because your basically and idiot." I favor those things too. Simplify, simplify, simplify.
Wrong. Government generally spends 20% of GDP. Now it spends 24% to 25% of GDP. This is really, really simple math. Really simple. The fact that you don't understand this makes me think that you are as inumerate as loonymom and goobershit.
He's already done that with ObozoCare..... so they know more is coming and are just waiting his silly ass out..... they also know he will be gone come Jan 2013... "Lunatic Left"..... you're being way too kind to them
When asked by a Liberal what I bought my Granddaughter for her 1st birthday I replied, "MORE AMMUNITION"!!!!
Peas in a pod..... oh by the way you left out a few others....
When asked by a Liberal what I bought my Granddaughter for her 1st birthday I replied, "MORE AMMUNITION"!!!!
it fell relative to GDP in the last year. And taxes are historically low while governments everywhere are slashing spending and cutting jobs. So why isn't the economy booming?
"Thats because your basically and idiot." Maybe you should take a look at corporate profits being reported now. Alcoa, the first of the major companies to report stated that it's 2nd quarter profit more than doubled. For all this talk about how "Obama is anti-business" corporate profits have never been better, and the DJIA is sitting at 12,500.
"Thats because your basically and idiot." Simplify, simplify, simplify. Good, but the Norquist pledge keeps Republicans from voting against cutting tax subsidies or closing loopholes unless they are offset by other cuts - resulting in revenue neutral scenarios.
"Thats because your basically and idiot." Small businesses are hurting.
Von Mises associates any Government involvement in markets as "Socialism" , to mislead people into thinking Government is the enemy , when infact empire is the enemy and empire is Privatized.
You're not exactly known as honest. Could you give me who he raised taxes on. The bill number and the date. Thanks. Then I might believe you. But I think you aren't telling the truth.
Government unconstitutional spending accounts for 100 percent of the deficit. Screw you commies.
If you would ever bother to learn how to do some research instead of taking the advice of your neocon friends here you would find that poster has one of the higher percentages for veracity. You didn't know Reagan raised taxes? He also slashed income tax deductions such as interest from credit cards that used to be deductible.
So why isn't the economy booming? Because businesses are scared to death of what else might be coming from the most anti-business administration in my lifetime. First, as usual, you are confusing margin tax rates with tax revenues. America has the highest corporate tax rates in the world. Sure, some politically connected business may pay very little because they have massive lobbying efforts to get special deductions just for them, but most businesses are getting screwed in American compared to every other OCED country. I'm really tired of explaining this to you. Second, American is only one of five developed countries in the world that tax overseas earnings when they are repatriated. American corporations are sitting on upwards of $3 trillion of overseas that will not be brought back to the U.S. and invested here because of double taxation (taxed in the country where the money was earned and taxed again when they bring the money to the U.S.) It's a brain dead stupid policy that hurts America -- so very typical of the envious and vengeful left. Third, although Obamacare passed, the actual implementation won't happen until 2014. Although businesses already know that this is going to hurt them, they are still trying to figure out just how much pain this will cause. Until they figure this out, they are not going to start hiring a bunch of people. Forth, the Obama administration has been recklessly dishing out new regulations at a historic pace. The tyrants at Obama's EPA is even ready to declare that the stuff you exhale from your lungs is a greenhouse that needs to be regulated. All of these things are adding tremendous costs to business. Fifth, Obama keeps harping about raising taxes. This is why business are not investing and creating jobs. Once Obama gets booted from office, things will change.
While they post record profits. Care to try again? You keep ignoring facts that don't fit your ideology.
"Thats because your basically and idiot." this is utter BS. The U.S. takes in the 4th lowest corporate tax revenues of the 30 wealthiest nations in the world. A whopping 68% of all US corporations pay NO income tax. (http://money.cnn.com/2008/08/12/news/economy/corporate_taxes/) Again, facts getting swept aside in the name of ideology. You seem too smart to rehash false Rush Limbaugh talking points, but you do it all the time.
"Thats because your basically and idiot." Clinton raised taxes, Bush II lowered them. Reagan raised them as well. Who had the best job growth?
"Thats because your basically and idiot." Care to try again? You keep ignoring facts that don't fit your ideology. That does seem to be a problem in jw's worldview. Even with those damn outrageous taxes, the rich just keep getting richer and companies just keep posting record profits quarter after quarter. Best to just ignore the whole thing and stick to the talking points.
senators of both parties seem to be climbing aboard McConnell’s do-nothing-and-get-out-of-town bandwagon. But the tea party House Republicans are spitting mad.
#2. To: Brian S, A K A Stone (#0)
(Edited)
Somehow, the president, who spent his first two-and-half years in office studiously ignoring the deficit, has now become Fiscal Hawk-in-Chief.
The U.S. is borrowing about 36 cents of every dollar spent so far this year. It borrowed 37 cents on the dollar last year, and 40 cents in fiscal 2009.
Federal spending ("outlays" in budget jargon) is expected to equal 24.1 percent of the nation's gross domestic product in the current fiscal year, which ends Sept. 30. The figure was 25 percent in fiscal year 2009, highest since 1945.
On the other hand, federal revenues are expected to drop to 14.8 percent of GDP this year, lower even than the 14.9 percent attained in both 2009 and 2010. There has been only one year since World War II when revenues have been as low as in any of these years: 1950, when the figure was 14.4 percent.
Badeye posted on 2011-04-29 10:30:22 ET
#3. To: go65 (#2)
Spending isn't "out of control",
#4. To: go65 (#2)
(Edited)
Spending isn't "out of control", it is falling relative to GDP
Period Taxes Spending Post WWII average 18% 20% 2000 19% 19% Today 16.5% 25%
I'll have them niggers voting Democratic for two hundred years -- Lyndon Johnson
#5. To: A K A Stone (#3)
Did you say the same when Reagan was president?
Badeye posted on 2011-04-29 10:30:22 ET
#6. To: jwpegler (#4)
(Edited)
The problem is spending. PERIOD. The government is spending more money that at any time since we were in WWII.
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Badeye posted on 2011-04-29 10:30:22 ET
#7. To: go65 (#6)
For this fiscal year federal spending is down to 24% of GDP
I'll have them niggers voting Democratic for two hundred years -- Lyndon Johnson
#8. To: jwpegler (#7)
(Edited)
Which is still 20% above historic rates. The conclusion you reached is that "revenues" are the problem. That's incorrect from a perspective of the last 65 years.
The conclusion you reached is that "revenues" are the problem. That's incorrect from a perspective of the last 65 years.
Badeye posted on 2011-04-29 10:30:22 ET
#9. To: jwpegler (#4)
#10. To: go65 (#6)
(Edited)
Do you ever ask yourself why... the economy isn't booming right now?
I'll have them niggers voting Democratic for two hundred years -- Lyndon Johnson
#11. To: go65 (#8)
(Edited)
But falling
I'll have them niggers voting Democratic for two hundred years -- Lyndon Johnson
#12. To: go65 (#8)
(Edited)
Again, look at the chart, taxes relative to GDP are at historic lows.
I'll have them niggers voting Democratic for two hundred years -- Lyndon Johnson
#13. To: go65 (#5)
(Edited)
Reagan raised taxes 11 times, you know that, right?
I'll have them niggers voting Democratic for two hundred years -- Lyndon Johnson
#14. To: jwpegler (#13)
Obama's debt commission proposed lowering the top marginal tax rate to 23%.
Badeye posted on 2011-04-29 10:30:22 ET
#15. To: All (#14)
The top marginal tax rate is what counts if you want to provide the right condition for economic investment and development.
Badeye posted on 2011-04-29 10:30:22 ET
#16. To: jwpegler (#12)
(Edited)
Cut spending to 19% of GDP, where it was when Clinton left office. Then we'll talk about taxes, if needed.
...Congress' fiscal watchdog also echoed a message that Federal Reserve Chairman Ben Bernanke has been delivering for months: As tempting as it might be to take a hatchet to the budget ASAP, implementing those changes too quickly could end up worsening, rather than improving the fiscal outlook.
"Making such changes while economic activity and employment remain well below their potential levels would probably slow the economic recovery," according to the report.
http://money.cnn.com/2011/06/22/news/economy/federal_budget_debt/? section=money_latest
Badeye posted on 2011-04-29 10:30:22 ET
#17. To: go65 (#14)
they also proposed closing loopholes and eliminating credits
I'll have them niggers voting Democratic for two hundred years -- Lyndon Johnson
#18. To: go65 (#16)
(Edited)
I'll have them niggers voting Democratic for two hundred years -- Lyndon Johnson
#19. To: jwpegler (#10)
Business owners are scared to death that the most anti-business President in our lifetime will foist new regulations, taxes, and control on them. So, they are not willing to risk their capital making new investments in innovation and productive capacity.
#20. To: jwpegler (#18)
The fact that you don't understand this makes me think that you are as inumerate as loonymom and goobershit.
#21. To: jwpegler (#18)
Government generally spends 20% of GDP. Now it spends 24% to 25% of GDP.
Badeye posted on 2011-04-29 10:30:22 ET
#22. To: CZ82 (#19)
He's already done that with ObozoCare..... so they know more is coming and are just waiting his silly ass out..... they also know he will be gone come Jan 2013...
Badeye posted on 2011-04-29 10:30:22 ET
#23. To: jwpegler (#17)
I favor those things too.
Badeye posted on 2011-04-29 10:30:22 ET
#24. To: go65 (#22)
Alcoa, the first of the major companies to report stated that it's 2nd quarter profit more than doubled. For all this talk about how "Obama is anti-business" corporate profits have never been better, and the DJIA is sitting at 12,500.
#25. To: go65 (#5)
Reagan raised taxes 11 times, you know that, right?
#26. To: go65 (#16)
#27. To: A K A Stone, go65 (#25)
Could you give me who he raised taxes on. The bill number and the date. Thanks. Then I might believe you. But I think you aren't telling the truth.
#28. To: go65 (#21)
(Edited)
And taxes are historically low...
I'll have them niggers voting Democratic for two hundred years -- Lyndon Johnson
#29. To: jwpegler (#28)
Because businesses are scared to death of what else might be coming from the most anti-business administration in my lifetime.
Badeye posted on 2011-04-29 10:30:22 ET
#30. To: jwpegler (#28)
America has the highest corporate tax rates in the world. Sure, some politically connected business may pay very little because they have massive lobbying efforts to get special deductions just for them, but most businesses are getting screwed in American compared to every other OCED country. I'm really tired of explaining this to you.
Badeye posted on 2011-04-29 10:30:22 ET
#31. To: jwpegler (#28)
Fifth, Obama keeps harping about raising taxes.
Badeye posted on 2011-04-29 10:30:22 ET
#32. To: go65 (#29)
While they post record profits.
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