Sunday, July 10, 2011

Debt Talks Stalled

House speaker John Boehner walked out on talks to reduce the US debt and prevent the US from defaulting.  It appears that the Democrats want to raise the debt ceiling (so they can spend more money, presumably) and raise taxes in an attempt to reduce the deficit, while the Republicans want to cut the budget:
The Treasury Department has warned that failure to do so by August 2 could lead to a possible default, which could push interest rates to skyrocket and cause the dollar to plummet. But Republicans, including those controlling the House, have insisted on large-scale budget cuts before raising the ceiling.
Both parties have thus far been unable to reconcile their radically divergent strategies to solve the nation's economic crisis, as Republicans refuse to raise taxes in a weak economy and Democrats denounce proposed cuts to entitlement programs as draconian and unacceptable.
The Democrats want to continue using their Keynesian approach, which so far, has worked out very well.  Or, at least, according to “experts,” has shown unexpectedly poor results.  So, if the poor results were unexpected, then it means that good results were expected, so it follows that the best approach would be to continue using the same approach that failed in the past (what is that called again? Insanity?).  The Republicans want to do something, that according to basic economics, might actually solve the debt crisis and stimulate the economy at the same time.  But, of course, doing so would entail performing unspeakable, evil acts such as pushing grandma off a cliff and not stealing so much money from people who actually deserve it.  How evil and “draconian.”  I mean, they use draconian as if it were a bad thing.  If they weren’t so blinded by their compassion they might actually realize that most people who deserve it would actually benefit from entitlement cuts because of the aforementioned economic stimulation that budget cuts would provide.  People might actually be able to find a job so they would not need to rely on the government to babysit them.

However, it does seem that maybe President Obama is not completely insane:
President Barack Obama had signaled a willingness to include reforms to popular entitlement programs such as Social Security and Medicare as part of a broad agreement for $3 trillion to $4 trillion in deficit cuts over the next decade, said Democratic officials familiar with the negotiations.
I will reserve judgement until the president actually acts.
But Boehner's announcement Saturday appears to diminish the chances for such a sweeping deal, although he kept open the door for some sort of less grand agreement.
A spokesman for House Majority Leader Eric Cantor said the group, spearheaded by Biden, has identified "between $2 trillion and $2.5 trillion in spending cuts that could represent the framework of the agreement." But he said that any tax hike cannot, and will not, be part of any deal."A tax increase cannot pass the House, and it is the last thing Congress should be doing with so many people out of work," said Brad Dayspring, the Virginia Republican's spokesman.A House GOP leadership aide said earlier this week that both Cantor and the No. 2 Senate Republican, John Kyl, voiced reservations at a White House meeting Thursday about the prospects for getting a $4 trillion package if it included $1 trillion in new tax revenues. Republicans were hesitant, the aide notes, to agree on any proposals that go much farther than simply closing loopholes.
The republicans should be resolute during these negotiations, given that they seem to have some grasp on reality.  And, if the United States does default, perhaps that would be an opportunity to get things over with so prosperity may resume sooner, rather than later.

While he didn't specify what tax hikes, if any, the president had proposed, Pfeiffer said it was important to spread the burden of any deal."We cannot ask the middle class and seniors to bear all the burden of higher costs and budget cuts," he said. "We need a balanced approach that asks the very wealthiest and special interests to pay their fair share as well, and we believe the American people agree."
Yes, because the evil rich people (some of whom actually earned their money) are always the ones responsible for destroying the country.  If the Democrats really wanted to be fair, they would end the redistribution of money and enact a flat tax across all income brackets or a sales-based tax.  Oh, and since when do budget cuts cost money?  I would think that they would actually save money.  I mean, that is the whole point of cutting the budget.

Senate Majority Leader Harry Reid, meanwhile, said he was "disappointed that Republicans are unable to work with us to take a dramatic step forward that would have dramatically reduced our deficit."
"We asked Republicans to consider a balanced approach that would have required shared sacrifice, but they would not," said Reid, D-Nevada. "We still need to make sure we avert the economic catastrophe that would occur if we were to let America fail to pay its bills for the first time in our history, and I am confident that we will."
Harry Reid is always reliable to offer some sort of twisted logic.  They want to raise taxes to close the deficit, while increasing the debt ceiling?  And they are disappointed in Republicans, whose proposal is much more viable?  And Reid wants the shift the burden from the people who are living off the government to the people who are actually suffering?  Am I not understanding this properly?


  1. There's a glimmer of light at the end of the Obama tunnel. Speaker Boehner needs to stand strong and not crumble - these negotiations are far more crucial than many Americans realize. This is the very reason why record numbers of spendthrift RINOs and Democrats in the U.S. Congress were booted to the curb in the last election. The majority of Americans want the out-of-control government spending to stop, for REAL spending cuts to be made, for fiscal responsibility to kick in. Not this "let's agree to raise taxes now and maybe later, we'll talk about your spending cuts" malarkey. The Democrat bloodbath was just a prelude of what is in store for DC in November 2012.

    The House Republicans hold all the cards and have started to demonstrate that many of them DO understand basic economic realities, that money does not grow on trees. That socialist economic principles have always failed.

    Now is not the time for them to buckle under Harry "Cowboy Poetry" Reid's nor Barack "I'd Rather Be on the Golf Course" Obama's punish-the-rich-and-spend-like-a-drunken-sailor media spin.

  2. What I don't understand is why the Democrats want to keep using leftist economics, which are proven not to work, when Reaganomics are proven to work.

    I hope, for the sake of Americans, that the Republicans manage to win in 2012. That would, of course, benefit the rest of the Western world as well.


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