Will the federal government default?

If the President (and his Senate) fail to reach a deal on raising the debt ceiling on October 17th, will the federal government go into default? Only if Barack Obama wants it to, because it’s entirely in his hands.

Can the government fund essential obligations?

Monthly revenue can easily cover the amount America must spend to service its debt. On top of that, monthly revenue can keep Social Security, Medicare, and Medicaid fully funded — even at the bloated and obscenely wasteful levels at which those programs currently operate. In fact, America can even maintain all of its defense spending at current levels too.

What will happen on the 17th if no deal is reached? The federal government will be legally required to stop borrowing more money and adding to the debt.

Look at it this way. If you earn $5000 in salary every month, but you max out your credit cards by spending $6000 every month, the bank will eventually refuse to bump up your credit limit any further. When that happens, you can respond in several ways. You can cut your spending by $1000 and stay forever at the limit. You can cut spending by more than $1000 and start paying off your debt. Or you can refuse to cut your spending by at least $1000, and you’ll be unable to make payments on your debt. In other words, you can choose to go into default. If the only thing keeping you from cutting your spending is your fondness for steak, single malt scotch, Italian shoes, fast cars, and weekends in Vegas … the blame for your default is 100% yours.

Sound familiar?

If the Obama Administration announces that they’ll stop making interest payments on the national debt on October 17th, then they’ve voluntarily chosen that course of action. Nothing will force them into it.

There’s plenty of revenue coming in every month to keep America from defaulting on the debt. We do not have a revenue problem. We. Have. A. Spending. Problem.

Do the rich pay their fair share?

I have questions for people who say “the rich don’t pay their fair share.”

What counts as “rich” to you? Are we looking at net worth? Annual income? Households or individuals? What’s the cutoff for “fair share,” pray tell? 40% of income? 50%? 75%? 100%? Or are we talking about confiscating wealth instead of just income? Should there be salary/wage ceilings?

Effective Federal Tax Rate



fair share

Taxes & Spending

Define the terms you incessantly bleat about, or shut up.

Bob Gibbs & the Obamacare repeal letter

The effort to choke off funding for Obamacare continues in the U.S. House of Representatives. Yesterday morning I e-mailed the following question to Rep. Bob Gibbs (R-OH) via his 7th District campaign’s Facebook page

Why didn’t you sign this letter pledging to defund Obamacare?

His reply:

Alo,

Obviously I’m totally against Obamacare, I have voted 33 times to repeal, defund and different parts etc. The reason I didn’t sign on to the letter to leadership because the letter stated to include defunding Obamacare in every piece of legislation going forward. This week we are doing defense appropriations and I can’t support holding funding up for our troops and national security, essentially holding our troops hostage. Also I’m completely fed up with the spectacle of the dog and pony show here in DC, I’m working for real results not being part of a circus.

Bob

Seems reasonable. My only quibble is the implication that Rep. Jim Jordan is running a circus. The Republican Study Committee is nothing of the kind.

Do we have a revenue problem?

Take a look at the average American’s share of federal revenue and spending from 1920 to now, adjusted for inflation to the value of a dollar in the year 2005. Click the chart to see it at full size.

We do not have a revenue problem

Since around 1995, the amount of revenue Uncle Sam has been able to squeeze out of the average American has leveled off between $6000 and $8000 per year, suggesting that we’ve hit the practical limit. Historically, the most revenue the federal government can expect to raise is an average of 18% of GDP (Gross Domestic Product; the entire annual American economy). In brief boom times or during existential threats like World War II, the federal government can squeeze more than 18% out of the economy, but it never lasts long. No matter how hard Uncle Sam tries, the biggest average chunk he can grab is locked in at 18% of the economy, because people respond to taxes.

In the seventeen years since 1995, Uncle Sam’s borrowing and spending has not leveled off. The average American’s share is past $10,000 per year and climbing. Our debt is piling up faster than we can repay it. The “recovery” from the late 2008 economic crash has been flat for years, but Uncle Sam keeps pushing the gas pedal down as we drive toward the edge of the cliff.

There is no more revenue to be had.

Squeezing blood from a stoneIf the federal government raises taxes it can only collect more than 18% of the economy for a short period, and then revenue will drop again, as always. If the government keeps borrowing — or tries to print boatloads of money — to feed its spending addiction, the inflation rate will skyrocket. That will destroy the value of the dollar, which will destroy the economy and your life’s savings.

As long as “money out” is a bigger number than “money in,” the national debt will grow and you’ll be on the hook for it. It will sink the economy as surely as that iceberg sank the Titanic. “Money in” is not going to get bigger, but “money out” absolutely will keep getting bigger as long as we keep sending the same progressives to Washington. They won’t stop themselves. Only we can stop them by replacing them with sane people who will reduce “money out” until it’s a lot lower than “money in,” and keep it there for generations. We can either take our medicine now and have an unpleasant experience, or we can keep deceiving ourselves and watch America collapse. There is no third option. The insane big-spending politicians in Washington are going to ruin your life and your children’s lives unless you stop them. Listen to the warning and save your country and your family.

We do not have a revenue problem. We have a spending problem. Anyone who tells you otherwise is either misinformed, a fool, or a liar.

“Hey, Reagan increased the debt just like Obama.”

Oh, really?

Debt-to-GDP Ratio under Obama and Reagan

When a country’s debt climbs past 60% of the total size of its economy for an entire year (what economists call its “Gross Domestic Product”), the country’s economic health suffers. When the debt-to-GDP ratio passes 90%, alarm bells go off. The longer it stays that high — or higher — the greater the risk of total economic collapse. We are becoming Greece.

We do not have a revenue problem. We have a spending problem.

The Obama budget

This chart comes from the White House (check page 58 of the monster PDF file), not from some crazy right wing extremist oppressor of downtrodden poor people and kicker of puppies.

Obama's 2013 budget

This is the Obama Administration’s current plan, in a document never intended to actually be passed.  It’s published strictly for election propaganda (“Look!  It’s a do-nothing Congress!!!”), so it’s a very mild version of what they actually want.  They tout this as responsible stewardship of your money.  Imagine what they’ll actually spend when the election’s over, and they have four years of freedom to enact their agenda without worrying about re-election.

Are you sure you want to gamble on this bunch of geniuses again?  Their record is eye-opening.

Ohio’s Porkulus data

I just looked up the summary of Ohio data on Recovery.gov and here’s some of what I found. Compare the numbers for jobs created/”saved” and money wasted spent for Ohio’s 18 congressional districts, and the numbers for the ten nonexistent districts that turned up.




































































































































































District Jobs Porkulus
1 – Dreihaus (D) 349.7 $1,063,584,388
2 – Schmidt (R) 146.6 $191,500,216
3 – Turner (R) 385.4 $186,371,562
4 – Jordan (R) 215.4 $104,248,906
5 – Latta (R) 105.7 $158,653,454
6 – Wilson (D) 224.2 $191,292,584
7 – Austria (R) 366.4 $167,834,446
8 – Boehner (R) 103.7 $98,813,378
9 – Kaptur (D) 367.5 $171,627,681
10 – Kucinich (D) 85 $80,955,117
11 – Fudge (D) 394.5 $349,743,107
12 – Tiberi (R) 140.1 $110,808,249
13 – Sutton (D) 149.5 $153,496,938
14 – LaTourette (R) 207 $78,765,929
15 – Kilroy (D) 13212 $1,366,388,033
16 – Boccieri (D) 96.3 $87,084,609
17 – Ryan (D) 229.4 $165,232,615
18 – Space (D) 306 $309,355,127
Total 17084.4 $5,035,756,339



20 0 $208,836
21 3 $1,241,652
49 0 $230,000
54 0 $100,000
56 0 $12,000
69 0 $400,000
85 0 $250,000
87 0 $336,108
99 0 $660,000
0 8 $1,865,319
Total 11 $5,303,915

Government weighs down the economy$5.3 million went to nonexistent congressional districts, creating (or maybe it’s “saving”) 11 jobs. That’s $482,174 per job. How do I sign up for that sweet deal? Then there’s the average waste stimulus per job in our actual 18 districts, which works out to $294,758 … still not too shabby. If I can snag one of the 149.5 jobs here in the 13th District, I will have cost America’s taxpayers a cool $1,026,735! Betty Sutton, call your office. I want a job.
That’s “transparency” in the age of Hope and Change™ for ya. Is this incompetent accounting, dishonest accounting, or both?
Want more? Nineteen out of the top twenty Porkulus recipients in Ohio are state, county, or municipal government entities. The one that’s not government owned is “a single-purpose environmental remediation Limited Liability Corporation dedicated to providing remediation services to the United States Department of Energy at the Portsmouth Gaseous Diffusion Plant site.” In other words, a government contractor.
Boy oh boy, that Porkulus sure did stimulate the free market, didn’t it? Way to go, Governor Strickland … you sure know how to allocate funds. I can’t wait to experience the joys of Obamacare, Cap & Trade, and amnesty for illegals.
For more analysis, check out Ohio Watchdog.

For the record: Kerry defense cuts

As several 24-hour news cycles pass by after the Republican National Convention and blur our memories of who said what at which point in time, a reminder can come in handy.
Lest anyone forget that John Kerry wanted to cut numerous military weapons systems that Zell Miller recited in his RNC speech, I offer two photocopies of a Kerry campaign flyer from the 1980s … which advocates cutting those very systems.
Page 1
Page 2
Kerry boosters claim that Miller misrepresented their man’s vote on a single defense budget bill. According to the lefties, Kerry would have voted for all of these systems, but because the appropriations bill had other really bad stuff hidden in it, poor John was forced to vote “nay.”
Now you know better.
Hat tip: Citizen Smash

Kerry screws the troops again

President Bush just signed this year’s Department of Defense Appropriations Act, which appropriates $391 billion toward such worthy goals as more body armor, more armored Humvees, more ammunition, more fuel, more spare parts, and critical funding for the war in Iraq and Afghanistan. The House passed the bill by a margin of 410-12, and the Senate voted “yes” by 98-0.
Take a wild guess who one of the two missing senators was. That’s right … John Kerry couldn’t be bothered to vote on funding our military. I hope some minimally competent reporter skewers him the next time he bloviates about supporting our troops.