Monday, January 31, 2011

Debt Ceiling…

Does anyone really believe that the “concessions” Speaker Boehner is talking about will be realized? What confidence should we have with the republican leadership that has shown that they lack the fortitude to manage a budget by their past actions? They were very happy garnering the Tea Party vote to get another chance at the helm but the Tea Party has little patience for more budget shenanigans.

We just added a Trillion dollars to the budget deficit in the last year. We should cut a Trillion dollars this year. I agree we need to pay our bills but there are bills that if reduced now would make paying the debt service doable.

I am having a hard time understanding how we add a Trillion in debt but the answer is to cut a $100 billion? I am no mathematician but we added a thousand billion and we are cutting 100 billion and we are good? Something is not adding up on my calculator.

The federal “budget” is $3.5 trillion give or take a billion. First, a budget in the private sector usually bases its spending and investment on the revenue coming in the door. But the federal government doesn’t really care that taking in $2.5 trillion and spending $3.5 trillion doesn’t add up. They have our credit card to borrow the deficit so balance be damned. The math is easy so why can’t we just balance the budget?

The biggest problem is that about 60% of the budget is redistribution of wealth. That means that the federal government is taking dollars from some of us and giving it to others through Medicare, Medicaid, Welfare, both personal and corporate, Education, Social Security (even though some have paid in - the way it is run is wealth transfer), and a million little programs that would take a thousand pages to list. What does it all mean? That 60% of the budget battle will pit one group against another.

Even if we balanced the budget in 2011, the debt that has been created by the federal government (yes under both republicans and democrats) has to be paid with the promised interest. But raising the debt ceiling is yet another temporary measure. It puts off a few more years the inevitable fact that we are spending too much on federal largesse.

The debt ceiling is being used as another tool by politicians unwilling to make the hard decisions they need to make. If the politicians offered up a balanced budget by making the necessary cuts, the debt ceiling would no longer be the argument, we would be able to pay the debt. The debt has an exponential effect and we need to get the deficit to 0 before we can dent our debt obligation.

The debt ceiling offers the politicians another escape hatch. It is time to face this crisis head on. Our children deserve a real solution and a balanced budget. We created this mess; we need to fix it…

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