Wednesday, August 3, 2011

Debt Ceiling Debate - #3132- RAND PAUL OPEN LETTER - Why I Oppose the Debt Ceiling Compromise (2) Obama is the Big Winner in the Debt-Ceiling Debate - Redstate (3) The Necessity of the Fight - Redstate (4) Former Head of Government Accountability Office: U. S. Less than 3 Years Away From Being Greece - The Blaze (5) On Second Thought, Looks Like the Super Committee Can Raise Taxes - Hot Air

Today Sen. Rand Paul issued an open letter on the subject of the debt ceiling compromise facing the Senate. Below is that letter.  To paraphrase Jim DeMint: When you’re speeding toward the edge of a cliff, you don’t set the cruise control. You stop the car. The current deal to raise the debt ceiling doesn’t stop us from going over the fiscal cliff. At best, it slows us from going over it at 80 mph to going over it at 60 mph.  This plan never balances. The President called for a “balanced approach.” But the American people are calling for a balanced budget.  This deal does nothing to fix the overreaches of both parties over the past few years: Obamacare, TARP, trillion-dollar wars, runaway entitlement spending. They are all cemented into place with this deal, and their legacy will be trillions of dollars in new debt.  The deal that is pending before us now: · Adds at least $7 trillion to our debt over the next 10 years. The deal purports to “cut” $2.5 trillion, but the “cut” is from a baseline that adds $10 trillion to the debt. This deal, even if all targets are met and the Super Committee wields its mandate – the BEST case scenario is still $7 trillion more in debt over the next 10 years. That is sickening. · Never, ever balances.  Read entire letter..........

Obama is the Big Winner in the Debt Ceiling Debate - Redstate -........... And in the political analysis, there is only one player who came out of this with everything he wanted: Barack Obama.  Obama wasn’t trying to advance a policy objective. Not even once did he let the articulation of such a thing pass his lips. Rather he had two specific objectives that he had to get at all costs:  1) To get Republicans to propose specific spending cuts that Democrats can use against them in the coming elections, while not making any such proposals himself; and  2) To silence the fiscal debate until after his election in 2012.  The president won on both counts. Everything else that was at stake in the negotiation was a nice-to-have for him, not a need-to-have.  Read more.........

The Necessity of the Fight - Redstate - Here’s something no one wants to talk about, whether Republican or Democrat. Well, I should not say no one, but pretty much every Republican and Democrat who participated in the terms of the debate over the debt ceiling has ignored this.  Government spending is going above 25% of GDP.  Tax revenue, up until the last two years has averaged 18.5% GDP. Let's give the Democrats, for the sake of argument, their Clinton tax increases back. The 1998 to 1999 years saw the highest amount of federal revenue come in. But it was only in the 21% of GDP range.  In fact, 1945 and 1999 are the only two years I can find where tax revenue into the federal government surpassed 20%.  In other words, with the economy firing on all cylinders, only twice has revenue into the federal treasury been over 20% of GDP and spending has now gone well above 20% of GDP.  If the plan is implemented to the letter as intended, we will add $12 trillion in debt over the next decade.  Read more..........

Former Head of Government Accountability Office: U.S. Less Than 3 Years Away From Being Greece - The Blaze - The former comptroller general — which heads the Government Accountability Office — had some unsettling words regarding U.S. debt and the recent debt debate. According to him, the U.S. is on its way to becoming like Greece, whose debt problems have plummeted that country into economic hell.  “We are less than three years away from where Greece had its debt crisis as to where they were from debt to GDP,” David Walker told CNBC. “We are not exempt from a debt crisis,” he added. “We’re never going to default, because we can print money. At the same point in time, we have serious interest rate risk, we have serious currency risk, we have serious inflation risk over time. If it happens, it will be sudden and it will be very painful.”  He also pointed out that credit agencies downgrading the U.S. are reactionary, meaning by the time one comes the damage may already be done.  Read more.........

On Second Thought, Looks Like the Super Committee Can Raise Taxes - Hot Air - Remember yesterday’s GOP talking point about how “baseline budgeting” would make it virtually impossible for the Committee to impose tax hikes? Supposedly, because CBO is required to assume that the Bush tax cuts will lapse next year, the $3.5 trillion in new revenue that will come from that lapse is already part of the Committee’s “baseline.” In order for them to hit their target of $1.5 trillion in additional savings, they’d have to recommend tax hikes above and beyond that $3.5 trillion. Which, with an election coming up, they surely aren’t going to do.  Just one problem: None of it is true. Or at least, none of it is in the bill. Tapper reports:  One bottom line of this debate is that it seems that the baseline the Super-Committee uses will also be a point of contention.  Experts on the CBO scoring process say Republicans are making a flimsy argument. There’s nothing in the legislation that would prevent the Super-Committee from proposing revenue increases. Nothing. And anyone in Congress can ask for alternative benchmarks.  The truth is the CBO is often called to score bills in different ways, and anyone on the Super-Committee could certainly request that it be done in a certain way with any assumptions…  Read more..........

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