published Sunday, May 27th, 2012

Debt follies

As Congress and the president rush headlong into another surreal battle over raising the federal debt limit, it behooves us to think for a moment about what exactly it is that the pro-debt-increase Democrats are asking of the country.

Where the national debt is concerned, they insist that we suspend all the rules of common sense and rational finance that we believe are prudent when a family, business or private organization finds itself struggling to pay the bills.

We must not reduce spending, they tell us. We must increase it.

We must not look at previous outlays and slash those whose returns are dubious or nonexistent. We simply must trust that more spending on unproductive programs will magically transform them into job creators and will generate "broadly shared prosperity" -- or something.

The evidence of history avails nothing among those whose mindset is marinated in the notion that government -- far more so than the individuals and companies that bear the good or bad consequences of how they allocate their resources -- is competent to say how privately earned money should be spent.

They devise inscrutable arguments to defend the idea that the $862 billion "stimulus," for example, somehow was a success. Just try pointing out to them an Associated Press analysis, conducted well into the stimulus spending binge, which showed that the counties across the United States that received the most stimulus money per capita for road work produced no more jobs for construction workers than the counties that got no stimulus cash.

You'll get nowhere.

And don't dream of pointing out famous (and numerous) flops such as heavily subsidized Solyndra, the California solar panel manufacturer that went under, costing U.S. taxpayers half a billion dollars. Any such flop, even if admitted, is dismissed as an anomaly.

Meanwhile, the Hurricane Katrina of red ink draws closer.

CBS News -- scarcely a skeptical source of information on the Obama administration -- acknowledged a few weeks ago that the growth of the national debt had exploded under Obama.

"The national debt has now increased more during President Obama's three years and two months in office than it did during eight years of the George W. Bush presidency," CBS reported in late March.

"The debt rose $4.899 trillion during the two terms of the Bush presidency. It has now gone up $4.939 trillion since President Obama took office."

The debt was less than $11 trillion the day Bush left office and Obama came in. It now is approaching $16 trillion.

Obama's defenders will cry foul at that criticism. Obama alone is not responsible for the gargantuan increase in the debt during his term in office, they will note.

And they will be correct, even as they set a land-speed record for missing the point.

It is true that Obama did not singlehandedly put the national debt into orbit. A catastrophe that vast requires plenty of assistance, and it came over a period of decades in the form of heavy Democratic support and considerable Republican support for spending that our nation cannot afford. (Remember that nifty Medicare prescription drug benefit, GOP?)

But today, it is not Republicans but Democrats led by Obama who are pressing for yet another increase in the debt limit by the end of the year.

And they will have enormous help from the news media to promote their cause.

Play a fun game of Spot the Bias with this lead from an article in the Los Angeles Times: "Republicans in Congress are heading into summer much the way they did last year -- instigating a showdown with the White House by demanding massive federal budget cuts in exchange for what used to be the routine task of raising the nation's debt limit to pay the government's bills."

Wait a second. If anyone has to carry the burden of proof in debates on more federal spending, it is surely those who favor that spending. Nothing in the fiscal recklessness of the past three years -- from the stimulus to ObamaCare to failed "green energy" subsidies -- offers the faintest evidence that America's economic problem is rooted in lack of government spending. What's being instigated is debt-fueled crisis after crisis, and it's Democrats doing the instigating.

We now pay hundreds of billions of dollars annually in interest on the debt, with no serious thought among a majority in Congress of cutting the debt itself. And the president wants still more "investment."

Raise the debt limit indeed.

Congress and the president alike ought to be attacking the debt with a vigorously sharpened hacksaw. Alas, that first would require admitting that mammoth levels of spending have failed to produce jobs and meaningful economic growth.

And admitting failure of such Herculean proportions is something that just isn't done in Washington.

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Sometimes cutting spending can be more expensive than getting a loan. I know a person who refused to fix their car because they didn't have enough cash on hand to pay for it, and would have had to pay in installments.

For want of that fix, their car broke down. They couldn't get to work. They lost their job.

Thriftiness can be a loss.

But hey, why don't we remember something...that revenue is the other side of the coin. I know Republicans believe in cutting spending as a sort of shibboleth, it's required as part of your sworn blood pact with Grover Norquist, but surely you can realize that there's more to a solution than just cutting and cutting.

No, no you can't.


It's not Democrats who are refusing to fix any problems, it's Republicans with their dogmatic demands. Democrats are willing to cut spending. Just not without revenue increases. Republicans will not compromise. Their idea of bipartisanship? Come around to their point of view.

PS, keep getting upset by Solyndra while ignoring Halliburton's 60 billion dollar pilfering from the Federal coffers. It shows where your true interest lies. Solyndra built the factory, Solyndra had a working product.

Lower prices from China drove them out of business.

But that doesn't matter to you, at all, does it?

How's that for bias? I think you miss the point. But you'll never get it at this rate.

You're far too committed to criticizing Democrats.

May 27, 2012 at 12:22 a.m.
casett said...

Opperative word is "Sometimes". Excuse me for being one to refuse the kook aid. If you do what you'he always done, you'll get what you've always got. You don't get out of a hole by digging deeper. Enough metaphors. We need adults at the wheel to turn this country around. I have a daughter who is 24 and I fear what we are handing her! I am embarrassed every time I think about it. How did we get here? Read your history. Much blood has been shed and sacrifices made so that we could be the greatest country in the world, not the highest debt or give away programs. I for one have had enough hope and change. I'm now hoping FOR change. If not, I fear we won't recognize this great country in 4 more years.

May 27, 2012 at 9:01 a.m.
Rickaroo said...

Casett...the country is almost unrecognizable anyway. We are no longer a democracy or a democratic republic but an oligarchy. Big business runs the show and the Republicans want to cede even more power to them - as if they don't have all the power already. And people like you are right there licking the boots of the fat cats and thinking you're being a good patriotic American by still believing in the great American way of an unbridled free market system - one that is doomed to fail if we keep it up. It has already failed us and you can't even see it. You blame it all on socialistic type wasteful spending and totally ignore the two unpaid-for wars that Bush lied us to get us into, his tax cuts that immediately turned a surplus into a deficit, and the unregulated greedy banksters who were playing their reckless casino style games with other people's money.

You're worried about the kind of world we're handing your daughter? Well, let's enact some good ol' austerity measures (they've worked so well in Europe and elsewhere) and let the big boys of business keep having their way and keep cutting taxes on the rich and let's see what kind of country we hand your daughter. I want you to tell me where all the new jobs are going to come from if we just cut spending to the bone and keep taxes at their lowest levels they have been for years. And when is the money going to start trickling down from the rich if we just keep cutting and cutting and cutting? Are the rich and the "job creators" just waiting for some magic level of spending cuts to be reached before they feel confident enough in the market to start creating all the jobs we need? I'm serious, tell me, please, what kind of magic is going to take place that spending cuts and austerity, without generating more revenue, are going to slash the budget and get us back on the road to prosperity? I think I just used the operative word, didn't I - "magic." 'Cause that's what it would take to get something from the nothing that Republicans (the adults at the wheel?) are proposing and that you seem to think is such a great idea.

May 27, 2012 at 10:45 a.m.
Hilltopp said...

Operative word is "fear."

May 27, 2012 at 11:34 a.m.

casett, the problem is not being willing to accept the sometimes, and yes, sometimes you do get out of a hole that way.

I was just reading how trucking companies were buying new fleets of CNG and LNG vehicles to save money.

But Republicans won't consider the sometimes, they won't consider any solution but austerity and starvation. They're the ones serving only one remedy, and you'll never notice it.

Because that's what you think you need.

May 27, 2012 at 3:34 p.m.
conservative said...

The writer : "Where the national debt is concerned, they insist that we suspend all the rules of common sense and rational finance that we believe"

This is exactly right. However, "they" (the Demoncrats) instead of "we" are believers and practitioners of Socialism. They got into power by funneling other people's money to voter's who want other people's money.

The next election will probably be America 's last chance to reject tax and spend and then do it again until America is destroyed politics.

May 27, 2012 at 4:21 p.m.

Instead you give us the choice of austerity and starvation that somehow still leaves the rich richer.

Some alternative.

If I thought you'd see the result of such conduct, I'd almost support the pain of seeing it fail so you'd learn.

But you wouldn't, you'd just sputter out excuses.

May 27, 2012 at 4:42 p.m.
conservative said...

The writer...."flops such as heavily subsidized Solyndra, the California solar panel manufacturer that went under, costing U.S. taxpayers half a billion dollars."

I prefer... "flops such as heavily TAXPAYER FINANCED Solyndra, the California solar panel manufacturer that went under, costing U.S. taxpayers half a billion dollars."

May 27, 2012 at 4:55 p.m.
nucanuck said...

We know that we can't continue to add huge amounts to the debt much longer. We also know that if we cut spending significantly, we will slide into a self-feeding deflationary spiral that would cause unemployment to soar.

Very few think we will ever repay the existing debt except by expanding the money supply and debasing the currency. The problem with that is that the resultant inflation leaves all but the most skillful investors worse off than before and destroys the value of the currency. Misery becomes wide-spread.

There is one economist, Steve Keen, an Aussie, who is thinking outside the box and has a possible plan. An unrefined version of his plan would be a form of debt jubilee wherein, say, every adult between 21 and 65 would be given $100,000, but required to paydown all debt before keeping any money. The currency would, of course, be debased, but the middle class would be largely out of debt. The banks would have debts reduced or paid off. We would be able to start over without the death and destruction of austerity or the folly of continuing to borrow as we are now.

The banks would be the biggest losers because they would no longer have all the interest income coming in, but the country would have a second chance, albeit poorer, to move forward with a weaker currency.

The numbers and details need work, but the concept is interesting.

Any thoughts?

May 28, 2012 at 1:46 a.m.
conservative said...

If You think raising taxes will solve or even reduce the debt. Think again.

The Feds spent as of 2009, $1.90 for every dollar received.

Raising taxes will only increase the debt!

Understanding deficits and debt Deficit and Debt Increases 2001-2010

In relative terms, from 2003-2007 the government spent roughly $1.20 for each $1.00 it collected in taxes. This increased to $1.40 in FY2008 and $1.90 in FY2009.

May 28, 2012 at 3:19 p.m.
nucanuck said...

Nice post c-man, but it doesn't relate in any way to my prior post which made zero mention of taxes. Why comment about that which you do not understand?

May 28, 2012 at 4:44 p.m.
conservative said...


I have not read your comment. Once I have smoked out Lieberals, Socialists, Demoncrats, Atheists, and sexual deviants and have gotten them to vent, rail, and even explode, I tend to not waste much time with them.

Why? Well I strongly believe that if I can just get Lieberals, Socialists, Demoncrats,Atheists, and sexual deviants to expose their immoral beliefs and practices they will only hang themselves with their own words. I then just need to pull their chain ever once in a while to get them to bark.

I have something to do but I will try to read your comment later.

May 28, 2012 at 5:19 p.m.

Solyndra received loan guarantees. Every penny the federal gov't paid out was to a private investor.

It wasn't taxpayer funded in a direct way. If the federal government had funded it, it might be as successful as the TVA. Instead,it was largesse to investors. Like the Walton family.

But good to show your conduct conservative, once you see somebody isn't going to follow your swill, you just close your eyes, cover your ears and scream.

Reminds me of a three year old having a tantrum.

But let's see, you think the government can't correct the current revenue imbalance?

Why is that? Are you one of the people who thinks the GDP is the sum totality of this country's assets?

May 28, 2012 at 6:12 p.m.
nucanuck said...

c-man, if that is why you post, you should seek professional help. Disturbingly disturbed might well describe your 5:19 PM comment. Have you ever considered that you might not be the final arbiter of good and evil...or that possibly you could be the evil. Standing in judgement of others is dangerous territory.

May 28, 2012 at 7:09 p.m.
conservative said...


I read your 1:46 and wanted to respond but you have diverted me with your 7:09. I may not get to it tonight. I will say that I have no idea what your 4:44 had to do with my 3:19. You obviously thought I was responding to you.

At 7:09 you exploded. I just like everyone else make judgments everyday . I noticed you were up at I am confident you used good judgment in not walking around downtown Chattanooga at that hour when you lived here.

I don't have to expose some liberals here, they save me time with the name they go by. Some have admitted to being an atheist. You're comments have revealed to me that you know almost nothing about the Bible. Atheists are not just people who say verbally say there is no GOD but atheists also LIVE as there is no God. You have also all but admitted that you are a Socialist. Why not make it clear and identify yourself as such? As I have often pointed out liberalism is a lie, that's why I write Lieberal. Those who practice Immorality are immoral, surely you know that.

"Or do you not know that the unrighteous shall not inherit the kingdom of God? Do not be deceived; neither fornicators, nor idolaters, nor adulterers, nor effeminate, nor homosexuals, nor thieves, nor the covetous, nor drunkards, nor revilers, swindlers, shall inherit the kingdom of God. And such were some of you; but you were washed, but you were sanctified, but you were justified in the name of the Lord Jesus Christ, and in the Spirit of our God." (I CORINTHIANS 6:9-11).

These Lieberals in the verses above have a harmful effect on our society, can't you see that?

Please read these verses carefully, you will see judgments. GOD is the ultimate judge and I as a Christian have a duty and an obligation to warn others of these judgments. I surely don't want them influencing and deceiving others. I want them identified. I have been successful with many.

May 28, 2012 at 8:47 p.m.

So apparently you're taking it as your mission to serve as God's own messenger on earth?


Your success is in revealing yourself for what you are.

May 28, 2012 at 9:37 p.m.
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