how the Tea Party is holding America hostage…

Posted: September 30, 2013 in economic policy, health care, Obama, Republicans, the tea party

images-246I wonder how many people actually fully grasp what the Republicans in the House are doing right now and how they are seriously harming this country in their attempt to discredit the president and hold America hostage.  It’s shameful, and if you’re not pissed off, you’re not paying attention.

images-244

First – a super-duper simple (I mean RIDICULOUSLY simple) explanation of some really boring concepts.  I’m leaving out lots of details…but here’s the gist.

Concept #1:  The national DEBT and the DEFICT are not the same thing.

The DEBT is how much we owe.  US government indebtedness has been the norm in our financial history for 200 years.  We have been in debt every single year of our existence, except for the year 1935.  Every president has added to the national debt.

The DEFICIT is the difference between what we spent versus what we took in, usually expressed per year.  One way of looking at it:  It’s how fast, or how much, the debt is growing.

Think of it like this:  Your credit card balance is your DEBT.  How much you put on your credit card this month (because your cartoon-boehner-liberty-hostageexpenses were more than your income) is, let’s say, your DEFICIT for the month.

Concept #2:  The BUDGET and the DEBT CEILING are not the same thing.

The BUDGET is passed by Congress every year.  The budget details projected tax collections and outlays and, therefore, the amount of borrowing the government will have to do in that fiscal year.

The DEBT CEILING neither increases or decreases the budget deficit.  The debt ceiling does not control or limit the ability of the federal government to borrow money.  Rather, it is a limit on the ability to pay our obligations already incurred.  The decision to raise it is a formality.  It’s like the “decision” you make to pay your credit card bill.  The debt ceiling has been raised 74 times since March 1962 including 18 times under Ronald Reagan, eight times under Bill Clinton, seven times under George W. Bush, and three times under Obama.  If we don’t raise the debt ceiling (which takes a vote from Congress), we cannot pay our debts.  And if we don’t pay our debts…well, bad things happen.

Remember, if the debt ceiling is not raised, the federal government risks defaulting on some or all of the obligations it has already images-245incurred.  Defaulting on our debt does NOT make it go away.  Raising the debt ceiling has nothing whatsoever to do with new spending.  It simply allows the government to pay off debts it has already incurred.  To the contrary, it increases the interest rate on the debt.  A higher interest rate means the amount of the debt also increases, making it even more difficult to pay off.

Experts say that if we were to default today, it would be…well, bad.  One went so far as to call it a “financial Armageddon.”   We are finally recovering financially from the Bush years…defaulting on our debts could set us right back to 2008, or worse.

Next, some important FACTS:

  • Repeat after me:  Obama has cut the deficit and slowed spending to its lowest level in 50 years.
  • Last month (August, 2013) the United States debt did not grow by a single penny.
  • The deficit has been shrinking faster than at any time since WWII ended. 

pic 2However you spin it, Obama has been GOOD for our economy. 

OK, now we’re finally there:  What the bastards are doing.

It’s time for Congress to pass the budget.  If they don’t, the government shuts down, services will be cut and millions of federal employees will be left without paychecks.  They pass a budget every year – they have to.  It’s their job.  NEXT:  Soon it will be time for Congress to raise the debt ceiling.  If they don’t, as previously mentioned, bad, bad things will happen to our economy, and, of course, to people’s lives.

HOWEVER, the Tea Party faction of the Republican party is attempting to sneak legislation past the voters and blackmail Obama into swallowing their extreme positions.  The basic idea is this:  If you don’t give us what we want, we will crash the economy.     

The scheme:  The Republicans are threatening to refuse to pass a budget or raise the debt ceiling unless Obama agrees to delay the health care individual mandate, approve the building of the Keystone pipeline, limit abortion, expand drilling, cut social services, and approve provisions favorable to Wall Street banks.

This is basically a list of things Republicans would like to do if they ran the government.  But (news flash!) they don’t run the government.  Instead, they are contending that it is a valid legislative strategy to use the leverage of the debt ceiling — which will cause an economic crisis if it is not increased — to demand their way on absolutely unrelated issues.

50ddcdebef148.preview-620The pretense that debt limit fights are about the public debt is over.

This blackmail/hostage-holding is unprecedented.  And dangerous.  And absolutely not in the interest of our country.

And here’s more bad news:  We’re going to be stuck in this nightmare at least until the 2014 elections, or perhaps beyond.

Comments
  1. Anonymous says:

    Eric Holder, DO YOUR JOB… The RepubliKKKLOWNS and teabaggers are committing treason, trying to bring the President down because he’s a BLACK man in THEIR WHITE HOUSE, and for no other reason. They are trying to destroy the legitimately elected government of the United States, all because of their hatred of the BLACK man in the White House, and anything he supports, EVEN IF THEY SUPPORTED BEFORE HE DID, they’re now against it. Bring the whole bunch of them up on charges of TREASON

  2. OK Mike, my apologies in advance for being a little harsher in tone on this one than I typically would be. I’ll buy you a beer next time I’m in your neck of the woods as my penance. Now on to the harsh words……. ☺

    I am truly hopeful this is another post you shamelessly paraphrased from HuffPo or something. If this is all you, than I further hope your job requires no math beyond about 4th grade level.

    1) Your description of the DEBT vs. the DEFICIT is perfect. Good work.
    2) BUDGET: fine with that too.
    3) DEBT CEILING. Now here’s where you get into trouble. “The debt ceiling does not control or limit the ability of the federal government to borrow money.” Um…. That is EXACTLY what the debt limit is. It sets a cap on how much money the government can BORROW. That’s why it’s called a DEBT CEILING. The only reason we ever need to raise the debt ceiling is because we’ve spent more money than we’ve taken in (i.e., “deficit spending”) and now have to borrow more money to pay it back. To further your credit card analogy, it is the US Government reaching the limit on one credit card, applying for another and reaching the limit on that, applying for another and reaching the limit on that, applying for another….. you get the idea. Good economic plan? Only if you’re utterly devoid of any sort of financial sense whatsoever.
    4) Experts say EVERYTHING is Armageddon and they are the same “experts” and politicians who made this mess and continually make it worse. It’s time we quit listening to career politicians and other imbeciles destroying this country, unwittingly or otherwise. (I speak of Demakooks and Reprebates here)
    5) Your facts about the debt are laughably false bordering on outright lies. I choose to give you the benefit of the doubt and think you aren’t deliberately misleading, although your trickery with Bush vs Obama deficit numbers tempt me to think otherwise.

    The 2.027 Trillion number you credit to Bush is the TOTAL deficit over his entire second term (4 years). Meanwhile you list only Obamas LOWEST deficit for ONE year and it may not even come to pass (“the deficit this year will be….”).

    You use the “percent of GDP” nonsense, as you have many times in the past, because it’s the only way you can obfuscate the truth. The only reason the deficit is lower as a percent of GDP is because spending under Obama shot through the roof!

    ******
    The ACTUALL DOLLAR AMOUNT OF OBAMA’s DEFICIT EXCEEDS ANY PRESIDENT BEFORE HIM BY A VERY WIDE MARGIN!!! And that is indisputable mathematical fact.
    FEDERAL DEFICITS BY YEAR (in billions):

    2002: 157.75 (Bush)
    2003: 377.59 (Bush)
    2004: 412.73 (Bush)
    2005: 318.35 (Bush)
    2006: 248.18 (Bush)
    2007: 160.71 (Bush)
    2008: 458.55 (Bush)
    2009: 1412.69 (Bush*)
    *also includes hundreds of billions in “emergency spending” by Obama

    Bush’s Average Deficit per year: 443.32 Billion
    Bush’s TOTAL debt added over 8 years: 3.5 Trillion

    2010: 1294.37 (Obama)
    2011: 1299.59 (Obama)
    2012: 1086.97 (Obama)
    2013: 972.91* (Obama) *estimated

    Obama’s Average Deficit by year: 1.16 Trillion
    Obama’s TOTAL debt added over 4 YEARS: 4.65 Trillion

    In other words, OBAMA has added a TRILLION DOLLARS MORE TO THE NATIONAL DEBT IN FOUR YEARS THAN BUSH DID IN EIGHT.

    (http://www.usgovernmentspending.com/download_multi_year_2001_2013USb_14s2li101mcn_G0f)

    Your comment about the Debt not going up a penny is just plain idiotic. The ONLY reason the debt clock has stopped ticking is because of the lunacy of “Quantitating Easing” (aka, “making sure your fellow wealthy fat cat political buddies get a cut of the extortion money flowing towards Washington DC from the hands of ALL OF US”). Please make an effort to understand what QE is and how it works before making such a stupid claim.

    It IS time for Congress to pass a budget, something that hasn’t been done since 2008. Oh no wait… it’s actually the Democrat controlled SENATE who hasn’t passed a budget. The Republican controlled house actually HAS passed a budget, every year! How have Obama’s budgets, the ones he’s actually presented anyway, fared but the way? Why didn’t you mention that I wonder? Hmmmm…..

    To be technical, the Republicans are not and have not threatened to shut down the government. They are refusing to fund the ACA (ObamaCare) and halleluiah for that. It is actually OBAMA who said he would shut the government down if they Republicans refused to fund Obamacare.

    As for me, I welcome any government shutdown for any reason really. You and I are both old enough to remember the last government shut down aren’t we? The “budget battle of 1995” when Newt Gingrich and the evil Republicans forced a shutdown over deficit spending? You know what I remember about that shutdown? ALL CRITICAL SERVICES (including food stamps and welfare checks by the way if you include that critical) CONTINUED TO OPERATE. Government employees who were furloughed were given full back pay for all of the time they took off. Boohoo, my heart bleeds.

    You know what’s going to happen when the government shuts down this time? Life will go on as usual and every minor incident to major disaster will be blamed on evil Congressional Republicans who clearly want to kill off the old people, starve the children, torture the weak, poison the air and water, and place hidden cameras in your bedroom to monitor your sex life. In other words, BUSINESS AS USUAL.

    SHUT IT DOWN! Most of us normal people in the country could give a rat’s ass.

    One last point, Obama and your Democrats have been an economic wrecking ball to the country and most of America knows it. They can feel it.

    – The average American has seen their income drop 8.3 percent under Obama.
    – The gap between rich and poor has widened (again, understand “QE” if you want to know the reason)
    – You brag about getting unemployment down to 7.x percent, ignoring the fact that 9 million have left the labor force (i.e., given up!). If the labor force participation rate was the same as when Bush left office, the unemployment rate would be around 12%. Cooking the books again but you can’t hide from reality.
    – Food stamp use is at an all time high.
    – Disability payments are at an all time high.
    – The poverty rate is higher than it was during the “recession”
    – Housing defaults are higher than the “recession”
    – Job growth is pathetic and 5 out of every 6 jobs “created” under Obama has been part time.
    – More and more businesses are cutting employees hours or laying them off specifically because of Obamacare and the overall disaster that is the Obama Regime.

    You can spin and market your line of demagogic BS all you want but the average American can feel the truth. Things are crappy but it isn’t a politician of any stripe who’s going to fix it. It’s time to wean ourselves off the government tit and do some things on our own. It’s up to **US** to fix this mess. Stop peddling hope and change nonsense 5 years on and let’s make it happen ourselves. After Obama’s 8 years when he’s still made no progress, and none of your “Progressive” schemes have work you will no doubt still be blaming Bush but the rest of America will have long since moved on. We won’t stay down indefinitely. A loser is a loser and the people are already jumping off the bandwagon like frogs off a sinking log.

    “Success has many fathers while failure is an orphan.”

    • nash says:

      John, John, John. I’m not going to write all I want to say here…party time, and party because I’m pretty sure no one else is reading at this point. 🙂

      Your debt ceiling explanation is just plain wrong. The debt ceiling is about paying back money WE HAVE ALREADY BORROWED. It’s not about any kind of decision to borrow more money or not. It’s like me and my wife making a decision in January as how much we’re going to spend for the year (the budget process), and us deciding we are going to spend X amount of dollars more than we bring in, which means we know we’re going to borrow this year. (NOW – before I go on…this is where my – and your – use of the family budget analogy fails. It’s NOT the same thing.) Anyway – my wife and I “budget,” and included in that is that we’re going to borrow money this year. Ok – now it’s the end of the year…we’ve already borrowed, and now it’s time to pay that money back. The debt ceiling discussion is simply – and only – the decision we make as to whether or not we’re going to pay the money back. In real life, it’s Congress deciding to approve the “ceiling” on how much we can pay back. Not a great explanation, but it’s better than the misleading (just plain wrong) explanation you offered, John.

      Secondly – I’m removing the deficit numbers from the article. Not because I believe that you’re take on the numbers is accurate – I don’t – but because I’m discovering that there are about 12 different ways to spin the same set of numbers, and there are some complicated factors involved. The fact is, Obama has been great for the economy, after many years of damage, and I’m afraid it’s only your ideology that’s preventing you from acknowledging this.

      From an interview with Bob Deitrick, co-Author “Bulls, Bears and the Ballot Box:”

      Our research reviewed American economic performance since President Roosevelt installed the first Federal Reserve Board Chairman – Republican Marriner Eccles. We observed that even though there are multiple impacts on the economy, it was clear that policy decisions within each administration, from FDR forward, made a clear difference on performance. And relatively quickly. Presidents universally take credit when the economy does well (such as Reagan,) and choose to blame other factors when the economy does poorly (such as Carter.) But there was a clear pattern, and link, between policy and financial market performance.

      Although we hear almost no one in the Obama administration taking credit for record index highs, they should. Because the President deserves attention for how well this economy has done during his leadership.

      The auto rescue plan has worked. American car manufacturers are still dominant and employing millions directly and in supplier companies. Wall Street reform has been painful but it has re-instated faith amongst investors. The markets are far more predictable than they were four years ago, as VIX numbers demonstrate greater faith and less risk.

      Even for small investors, such as those limited to their 401(k) or IRA investments, the average annual compound return on stocks under President Obama has been more than 24% since the lows of March, 2009. This is a better result than either Clinton, Reagan or FDR – who were the prior winners in our book.

      Q- Bob, what policies do you think were most important toward achieving today’s new highs?

      BBBB – Firstly, let’s review just how bad things were in 2009. In 2000 America was completing the longest bull market in history. But by the end of President Bush’s tenure the country had witnessed 2 stock market crashes, and the DJIA had fallen 58%. This was the second worst market decline in history (exceeded only by the Great Depression,) and hence the term “Great Recession” was born.

      In 2000, at the end of Clinton’s administration, the Consumer Confidence Index was at a record high 140. By January, 2009 this index had fallen to an historic low of 25.3. Comparatively, when Reagan took office at the end of the economically weak Carter years the Confidence Index was still at 74.4! Today this measure of how people feel about the country is still nowhere near 2000 levels, but it is almost 3 times better than 4 years ago.

      Significantly, in 2000 America had a budget surplus. By 2009 surpluses were long gone and the country was racking up historic deficits as taxes were cut while simultaneously outlays for defense skyrocketed to cover costs of wars in Iraq and Afghanistan. Additionally, banks were on the edge of failing due to unregulated real estate speculation and massive derivative losses.

      Today the Congressional Budget Office is reporting a $200B decrease in the deficit almost entirely due to increased revenue from a growing economy and higher taxes on the wealthiest Americans. The deficit is now only 4% of the GDP, down from over 10% at the end of Bush’s administration – and projections are for it to be only 2% by 2015 (before Obama leaves office.) America’s “debt problem” seems largely solved, and almost all due to growth rather than austerity.

      We can largely thank a fairer tax code, improved regulation and consistent SEC enforcement. Also, major strides in health care reform – something no other President has accomplished – has given American’s more faith in their future, and an increased willingness to invest.

      • Anonymous says:

        Sorry for all my typos. That last comment of mine sucked.

        By the way, do you have any empathy for the millions of people who won’t be paid or are temporarily out of work? I know several of them, and, no, they won’t be getting back pay. And secondly, do you really think the GOP is not shutting down the government but simply refusing to fund the ACA? Seriously? If they could choose not to fund something that is already law, then why are they strong arming Obama to delay it? Why not just not fund it? Because they can’t. All they can do is blackmail. It’s a sad chapter in our government’s sad history.

  3. Also, my condolences to anyone who actually made it through all of Mike’s post and all of my comment. You might as well have checked out a book from the library and read it! 🙂

  4. Oh and I got that “5 out of 6 jobs are part time” stat blatantly wrong. I went back and checked and it’s actually 7 out of 8. My bad.

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