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Guest Post:Debt Limit Showdown In March And More

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By Pete Davis, of Capital Gains and Games

Debt Limit Showdown In March And More

Congress will return on January 5th to battle over the budget for much of the year.
The new House Republican majority (242R-193D) won't wait for the
normal budget process to send the Senate weekly spending cuts, which the
Senate won't take up. President Obama's State of the Union address
(expected on January 25th) will be the next focal point, as will his
FY12 Budget to be presented February 14th. The Budget Committees will
produce resolutions that might pass their respective houses, but a
compromise seems unlikely. The government is funded only through March
4th, so another continuing resolution will be required. The ultimate
showdown will occur over extending the $14.294 trillion debt limit,
probably by early March.
 
House Republicans
will do away with the Gephardt rule that automatically passed a debt
limit increase as part of the budget resolution.
From now on, the
House will have to explicitly vote on every debt limit increase. Since
many Republicans and a few Democrats have long campaigned on never
voting for a debt limit increase, passing one will be very difficult
indeed. With the pre-Christmas $856 b. extension of the Bush tax cuts
and extended unemployment benefits, a debt limit increase will be
required in March or so according to an informal CBO estimate. Speaker
John Boehner (R-OH) will face a big challenge coming up with enough
spending cuts or other sweeteners to pass a debt limit increase or more
likely a series of short-term debt limit increases that could prove
disruptive to the Treasury market, as was the case leading up to the
debt limit increases of 6/28/02, 3/29/96, 10/28/90, 8/10/87, 8/21/86,
12/12/85, 11/14/85, 10/13/84, 7/6/84, and 5/25/84. The Senate (53D-47R)
will probably have an easier, but still difficult time passing a debt
limit increase. Looking to the 2012 election, 23 Senate Democrats will
defend their seats with three rated
by Charlie Cook as toss-ups and four as leaning versus only 10
Republicans up for reelection with only two rated as toss-ups and none
as leaning. Some vulnerable Senate Democrats may not vote for a debt
limit increase.
 
"CUTGO" will replace of "PAYGO." The current "pay-as-you-go" limit on mandatory (entitlement) spending would be replaced with "cut-as-you go," so tax increases could not pay for increased entitlement spending. Reconciliation
could not be used to increase direct spending. A point of order would
be established against any bill, amendment, or conference report that
raises mandatory spending by more than $5 b.
 
Other
House rules changes would require that all bills and resolutions
contain a statement citing the specific authority in the Constitution
authorizing their enactment and would increase transparency by
establishing a point of order against consideration of any bill or
resolution not available for three calendar days, a 3-day minimum notice
for committee meetings, a 24-hour minimum electronic posting of mark-up
language and amendments and 48 hours for posting votes.
 
Here's a summary of the proposed rules changes, and here's the legislative language.
 
Weekly Republican House spending cuts will be ignored by Senate Democrats. House
Republicans have vowed not to wait for the normal budget process to
start sending the Senate weekly spending cut bills to reduce federal
spending by $100 b. in the first year. Senate Majority Leader Harry
Reid (D-NV) is unlikely to take them up.
 
President Obama's State of the Union address and FY12 Budget. Although
no date has been set yet, 8 PM Tuesday, January 25th is likely for
President Obama to address Congress and the nation. Any new budget
initiatives would be described, and some of them will probably be leaked
to the media shortly before. He has consistently proposed significant
spending cuts in both his FY10 and FY11 budgets, but nothing near what
Republicans will demand. The biggest question is my mind is whether he
will venture a tax reform proposal. Treasury is working on options.
 
Tax reform is a top priority for House Republicans. Ways
and Means Chair Dave Camp (R-MI) wants to dramatically lower income and
payroll tax rates and pay for it by eliminating loopholes as detailed
in this December 23rd George Will column.
It will be quite a challenge to overcome all the opposition that would
generate from charities, real estate, health care, retirees, and many
more, especially on a revenue neutral basis. Recall that the Tax Reform
Act of 1986 depended crucially on large business tax increases. If President Obama surprises us with his own tax reform proposal,
which Treasury is reportedly working on, there's a chance it could pass
the House this year. Getting anything like the House bill through the
Senate within the next two years would be very difficult. U.S.
multinationals are very intent on lowering the 35% top corporate tax
rate and moving toward a territorial tax regime, but achieving that
without losing revenue will probably leave too many net losers to pass
Congress.
 
Health reform repeal will pass the House, but not the Senate. Spending
cuts to cripple the implementation of health reform won't pass the
Senate either. There are changes that both sides might agree upon, but
passing such a bill would be quite difficult because killer amendments
would be hard to ward off.
 
Health reform future is also in the hands of the Supreme Court. It's
not clear whether the Supreme Court will expedite its consideration of
conflicting district court health reform rulings that have yet to wind
their way through the appeals process. Normally, it would take at least
a year or two for a case to reach the Supreme Court. Many, but hardly
all, constitutional scholars think the Supreme Court would not strike
down the mandate for individuals to buy health insurance, but that's not
much reassurance given how massive an undertaking health reform
implementation is
 

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Sun, 01/02/2011 - 10:44 | 842477 SWRichmond
SWRichmond's picture

TOSS UP (3)

Nelson* (NE)

Webb* (VA)

Manchin (WV)

The people have begun to wake up and these "more-of-the-same" "it's-my-turn-to-be-a-senator" types are on the way out. 

Vote for TARP?  Vote to raise debt ceiling?  BYE BYE.

Sun, 01/02/2011 - 12:42 | 842545 WestVillageIdiot
WestVillageIdiot's picture

When does RINO hunting season begin?  That can be followed shortly by LINO (liberal in name only) hunting season. 

Sun, 01/02/2011 - 11:28 | 842486 Eric The Red
Eric The Red's picture

The last time we had one of these government shutdown deadlocks it was between Bill Clinton and Newt Gingrich.  Clinton came out of that situation looking good.

Sun, 01/02/2011 - 11:39 | 842494 Dan The Man
Dan The Man's picture

-----------

I blame the lazy, good for nothin', move back in with the folks...STUDENTS!  

Back in my day...I MADE my own job...and I ate dirt and loved it! 

 

....but seriously... how will debt forgiveness of that size work?

Sun, 01/02/2011 - 11:41 | 842495 Dan The Man
Dan The Man's picture

----

oops, forgot the link...

http://english.aljazeera.net/video/americas/2011/01/20111252018281486.html

 

will this be QE 5 or 6?

 

Sun, 01/02/2011 - 11:48 | 842498 Charles Mackay
Charles Mackay's picture

The budget situation is worse than ever before, save the Civil and Revolutionary wars.  Therefore I am sorry to say that I am not buying the argument that the government will be subject to an endless series of debt limit votes.  I missed the part where America voted in mostly anarchists last November; although some in Congress probably are of the type that are quite willing to destroy the US for their own fame or ideology.

 

Note I am not against cuts in government spending, but against the kind of ‘government shutdown’ chaos being talked about here - which would set back the bond market and subsequently the US tremendously.  What are the dollar holders around going to think if the US government can't function?  This may make last year's Euro crisis look like friendly chit-chat at a tea party.

Sun, 01/02/2011 - 12:33 | 842531 CrashisOptimistic
CrashisOptimistic's picture

Well, there are two choices.  Refuse a debt limit increase, which will force spending to reduce to tax revenue -- which is still more than 2 Trillion dollars.

Or proceed with business as usual, with the GOP's absurdly celebrating a cut of only 100 or 150 billion dollars.  

150 billion is only 1 / 10th the deficit!!!

It's not a solution.  It doesn't address the problem at all.

These folks in Congress are insulated from reality.  They think it's all going back to growth derived tax revenue increases.  It's NOT!  Ever!

Cuts have to be draconian and they have to be now.  Every day that passes burns more oil from the supply.  Every day that passes is more people to feed.

It doesn't get better on the current path.  It gets worse.  It is a time for extreme measures.  There is no choice.

Sun, 01/02/2011 - 13:27 | 842604 jmc8888
jmc8888's picture

Says the fascist fucktard oblivious to reality.

'they have to be draconian'

Why?

Because you're a fascist non-thinking fucktard who knows nothing about this situation or how to fix it and thus lets take the easy way for you out and just cut?

You are insulated from REALITY.

MONETARISM IS NOT REALITY.  ITS MONETARISM.

People who wish for balanced budgets over everything else, have an unbalanced mind.

Thus anybody who calls for cuts, for the sake of cuts (not because it actually needs to be cut) is insane.  CrashisOptimistic is insane, and wants you to take an insane approach to a monetary problem.

So tell the insane asylum there's tons of Austrian fucktard anti-americans on the prowl spouting their bs that the only way to survive is to cut everything.

What clueless retards.  I can surely see how we got here.  Because of dipshits like you.

Anyone that agrees with this fucktard is anti-american, and should just leave.  If you truly are a monetarist, you aren't a patriot.  So either realize the truth and change, or realize the truth and leave.

It's called Glass-Steagall

It's called Fixed exchange rates

It's called tariffs and quotas

It's called high taxes on some people/industries, lower on others

It's called raising social security 200-300 percent to offset the non-included inflation over the last few decades.

It's called returning to physical economy reality, not monetarist folly. (which I can assure the latter is ALL YOU KNOW)

NAWAPA

Nuclear Power

Fusion

Mag-lev

Space program

There is so much we need to do, and this fucktard wants to cut it all away.  They don't know what money is nor how it should be used.  They don't know nothing but the sophistry of losers.  The sophistry of Monetarists.

That's what they are screaming for, more fascist monetarism.

So let's point it out to them.  That's what they are hollering for.

It's not a solution, in fact it'll make things worse.

All because in the end, just like the beginning and middle, you refused to use your brain, and like an animal, feel the urge to end something you don't understand by employing a tactic you don't understand.

Good luck with that.

Fascist unamerican piecer.

Sun, 01/02/2011 - 16:36 | 842885 CrashisOptimistic
CrashisOptimistic's picture

I would rebut, but I can't understand any of that.

Sun, 01/02/2011 - 23:30 | 843486 Montgomery Burns
Montgomery Burns's picture

Seems correct to me.

Mon, 01/03/2011 - 04:45 | 843751 Al Gorerhythm
Al Gorerhythm's picture

Two fools met.

 

Mon, 01/03/2011 - 00:32 | 843544 Al Gorerhythm
Al Gorerhythm's picture

Your point was hard to fathom as you seem to have left out your argument in support of your diatribe.

What do you propose as wealth production? I don't see one project that creates wealth and just more big spending. Do you think that you can spend us back to prosperity? We are bankrupt because of that very monetarist policy, don't you get it. No, sadly you don't.

Where are the productive industries that will pay for more debt? And just where do you expect the capital to come from to pay for all of these pie in the sky projects. You have a big mouth, let's hope you have savings of the same proportion, that the government can raid to pay for your proposed profligacy.

Mon, 01/03/2011 - 05:01 | 843770 LudwigVon
LudwigVon's picture

It's called Lasers

It's called Prescription Drug Plan

It's called expansion of the National Guard

It's called Fixed Interest rates

It's called Proton Beams

It's called Ion Fusion

 

Sun, 01/02/2011 - 16:45 | 842891 Tanz der Lemminge
Tanz der Lemminge's picture

.

Sun, 01/02/2011 - 11:58 | 842502 Return2Sanity
Return2Sanity's picture

Anyone expect big spending cuts this year is going to be greatly disappointed. They will only cut as much as they must to keep access to the debt markets. And when the other sovereign borrowers lining up are the likes of Ireland, Greece, Spain, Italy, and Japan, you can bet it won't take much lipstick and eyeliner to convince the bond market that the US is a more attractive risk. The Repubs will just use their power as an opportunity to make sure more of the money gets spent on their priorities, and less on what the Dems want.

Sun, 01/02/2011 - 13:56 | 842634 dark pools of soros
dark pools of soros's picture

exactly - the debt ceiling is a tent in tornado alley

Sun, 01/02/2011 - 12:02 | 842505 buzzsaw99
buzzsaw99's picture

The new house of CONgrifters has already been bribed. They can't wait to play ball with the maggots.

Sun, 01/02/2011 - 12:26 | 842518 CrashisOptimistic
CrashisOptimistic's picture

The business as usual perspective may very well NOT apply this year.

I certainly am attuned to the cynical world view that the Tea Party bomb throwers are going to show up and get bought off, just like everyone else always has been bought off, and backstab their own voters with a smile.

But I somewhat do think it's different this time.  These people were elected to throw bombs.  Getting bought off will not get these particular people campaign funds.  They raised their campaign funds from the bomb throwing wing of the electorate.

I do believe they will get sworn in and start throwning bombs.  They, unlike all predecessors, were not elected to DO things.  They were elected to STOP doing things.  

It's a very dangerous position for business as usual.  Government shut down is an end unto itself for these folks, and there are a lot of them.

Sun, 01/02/2011 - 12:41 | 842542 WestVillageIdiot
WestVillageIdiot's picture

"But I somewhat do think it's different this time."

I heard a lot of that same shit 2 years ago about Obama.  How did that work out for the child minded fools that were hopping around like jackasses spewing the words "Hope and Change"?  Many of them, like my co-worker, are still so delusional that they think Obama is doing a great job and "loves his people". 

The Tea Party candidates need to STFU and lead with their actions.  I don't want to hear a single word from another politician.  Believe none of what they say and half of what they do.  The time for pretty little speeches is long past.  That time died when the newly elected Tool in Chief named Timothy Geithner as his Treasury Secretary.  We just need to watch the Tea Partiers if they do something similar to that betrayal of all those people that placed any hopes in their candidacies. 

 

Sun, 01/02/2011 - 13:50 | 842629 jmc8888
jmc8888's picture

ROFL

So if the tea party, doesn't move ahead with it's fascist, unamerican, foreign thinking Austrian MONETARIST policies, then they will be betraying all those people who were anti-american enough to place hope in them?

Gee, how exactly do you deconstruct, such a lunatic view of the world.

The tea party are fascists anti-americans.

So if you want them in power, what are you?  Anti-american?

You're sitting there cheering for the death of America...and if those who won't kill America, actually don't try to kill it, then everything you fought for is lost.

Yes, you are fighting for a lost cause.  I can't believe the world is so twisted, this fucktard, actually thinks he makes sense.

Please go back to monetary land, aka anywhere but U.S.A.

The only betrayal, IS THE TEA PARTIES EXISTANCE ITSELF to the United States.

Oh let's vote for a bunch of unamerican assholes, with unamerican ideas, with no solutions to foreign brought ideological problems.

So many dipshits like the above author, who doesn't even know he's the exact problem he's trying to fix.  Want to fix the problem? Stop what you're doing, and that's a start.

The Tea Party doesn't know DICK with how to fix our problem.  If you think so, you are the stupidest motherfucker to ever set foot on this planet.  There is no ideas in the tea party.  NONE.

Just, cut. 

Great ideological stance.  Cut.

Someday soon these dipshits will figure out they were 100 percent wrong.  The question really is, will they destroy America first?

Take your Keynesian/Austrian monetarist sophistry bullshit and how you wish to apply that to our American Gov't and shove it up your ass. 

Who is a bigger idiot Ron Paul or Ben Bernanke.  The answer isn't either/or, it's BOTH.  They're BOTH FUCKING IDIOTS.

...and unlike you, I never believed either.

 

Sun, 01/02/2011 - 14:00 | 842642 dark pools of soros
dark pools of soros's picture

you understand the lies but not the truths

Sun, 01/02/2011 - 14:10 | 842662 Pants McPants
Pants McPants's picture

Your namecalling is what convined me you have it all figured out.  Now please return to the Weekly Standard or National Review or wherever you came from.

Sun, 01/02/2011 - 14:11 | 842667 Eric The Red
Eric The Red's picture

Tea Party = Nazi Party

Mon, 01/03/2011 - 00:33 | 843559 StychoKiller
StychoKiller's picture

I can think of $14Trillion+ reasons why you don't have any answers either!

Mon, 01/03/2011 - 05:07 | 843775 LudwigVon
LudwigVon's picture

Keynesian Austrian MONETARIST 

Yeah you have a clue. 

Take your Jaguar Chevy Toyota Cutlass and just drive away.


Sat, 01/08/2011 - 19:02 | 842570 Clapham Junction
Clapham Junction's picture

(d)

Sun, 01/02/2011 - 12:35 | 842535 WestVillageIdiot
WestVillageIdiot's picture

" What are the dollar holders around going to think if the US government can't function?"

Where the hell have they been the past 20 years?  It might actually strengthen Treasuries if foreign holders see that there is a faction that is willing to stand up to the mess that has been created by New York and D.C.  All good things must come to an end.  So must all bad things.  This dreamlike state we have been in for the past 20 years is not going to end painlessly.  Shutting down this monster government scares me a lot less than having it continue in its current frenzied, rights-stripping, way. 

Sun, 01/02/2011 - 13:00 | 842565 duo
duo's picture

I'll state again, the House should limit any bill to 50 pages.  Anything longer than that is too complex to implement and the uncertainty created by 2000+ page bills actually causes more problems than the bill is supposed to "solve".

Sat, 01/08/2011 - 19:02 | 842568 Clapham Junction
Clapham Junction's picture

(d)

Sun, 01/02/2011 - 13:06 | 842573 jmc8888
jmc8888's picture

Yep, the fascist new republican Barack 'the limp chicken cock' NerO-bummer will call for cuts. 

Only two ways things get done this 'congress'.

1. Unitary Executive (Nero's boys are running around trying to find out how much he can get away with)....is this why he had a protracted DADT fight in congress??? Nero following Dick. Which appropriately is all he knows.

Why? Simple....because he uses his executive authority on things congress didn't take up. But how can he get such a long list of things done in such a manner?

You all knew he could of used a stroke of a pen to rescind the executive order right?  Executive order signed, can be removed by a signature.  WHich means it takes about ten seconds to repeal DADT.

So why did he fight it through congress, when the congress had 1000x better issues to discuss?

Maybe because he doesn't WANT congress to take them up.  Leave as much on the table as possible until the break, then a couple of hours after they leave issue the executive orders.

Gee...what did Nero do?

Did he end DADT in two seconds? Or months through congress?

Is he going around trying to find out how much power he can grab? Yep...he's scared of his bretheren, fascist republicans.  Which is who he will side with time and time again this congress.

So again if he doesn't go THAT route.

He'll go the fascist route and pass the fascist ones' wet dreams' .

You know all the things Ron/Rand Paul in a very unamerican, fascist way call for cuts on.  (not that these dipshit realize they are unamerican)

The type of Simpson/Bowles, or the commission that's even worse than that.  Both fascist.  Both loved by the fiscal restrainer idiots who know nothing about gov't nor the real economy.

And imagine the world where the Austrian's along side Keynesian's ALSO had a bunch of assumptions that were dead wrong.

Because whether your a Keynes or an Austrian, you are a monetarist (which is inherently anti-american btw), with dipshit monetarist assumptions clouding everything you in the end can't think about. 

So I hope in this new year, that for the first time the idiot fascist fucktards like Ron/Rand Paul, and their clueless fascist queen of england following, realize that they have NEVER been in a situation where they were 'thinking out of the box', because they're just thinking from a different corner of the SAME MONETARIST box.

Very important for the dipshits to realize this.  Because it's akin to building the Pyramids of Giza ontop of the LeBrea tar pits.

But since they've been fooled like Keynesian's about everything (including it seems the concept of monetarism, definitely retarded supply side republican-ism) as well, I won't hold my breath.  But when the fascist Austrians (and/or) fascist tea (nuts on your face) party realize how wrong they are, the collapse will be amazing. Because they'll find that their spirit is 100 percent contradiction with their actions.  Just imagine such a stark realization.  That's what's coming.  Guaran-fucking-teed.

Austrians don't think out of the box.  That's a reality they're going to have to deal with, and be destroyed by.  Monetarism has no future, including the fascist fucktard Austrian school of non-thought.  (similar to the fascist Keynesian school of non-thought).

Here's another revelation I wish the Austrians to understand in 2011, but they won't.  NO FOUNDING FATHER, was an AUSTRIAN.  It's even in the constitution to forbid MONETARISM.  Which includes, the Austrian school of bullshit sophistry thought.  So when your heroes talk about cutting this, cutting that, letting 'pain' be felt, so on and so forth, that he's not channelling our founding fathers at all, just a royal Hapsburg's bullshit take on monetarism.

Only an idiot like Ron Paul would say he's like a founding father, and espouse the Austrian school.

It's very much akin to if Hitler said he was for democracy and free speech, and loved all races. 

At some point, the bullshit has to be smelt.  Ron Paul is no patriot.  Neither are any Keynes monetarists.  Neither is the tea party, or Sarah Palin, or any centrist democrat.  Even the lefties have been compromised through 'green' bullshit (that isn't green btw...because it isn't about green...that's just how they sucker YOU into bending to THEIR will). 

So buckle up everybody.

It's going to be decidely fasicst bizarro world, from here on out.  Before we had mostly just bizarro.  Now it's going to be fascist, from both sides of the isle.  Which means there really is only one.  The fascist fucktard approach.  Ranging from Barack to Paul, to Bachman, to Reid, to 'Boner', to Pelosi, etc, etc.

None are espousing American ideals.  NONE OF THEM. Sorry Paul, everyone wants to end the fed, and other than that (how they use the fed to bailout), you're wrong about everything. 

So can we skip sorry ACT II 'the fascist austrian debacle'?  Probably not.  As the fucktards that once believed Reagan, Bush, and gasp Palin and Paul, will still be complete dipshits (well at least they're consistently disphits...gotta give them that) this year.

Either the Keynes and Austrians go, or America does.  Not one damn thing Ron/Rand Paul can do to change that fact.   Nor Nero.  So suck it up, and start finding out what the true American Spirit is.  It ain't what you find espoused by your heroes, as they're really traitors.

Fascism isn't on the march, it's already firmly implanted in both sides IN POWER.

You know instead you'd rather have a worldwide (but specifically among sovereign nation states themselves...) Glass-Steagall style bankruptcy reorganization.  Glass-Steagall is the standard. 

Funny the monetarists never figure out the obvious, and thus their way out of the MONETARIST trap, is to either spend more through stimulus [that this generation is bailouts] (a keynesian monetarist trap), or spend less through austerity [entitlements, and in truth as Paul says ANY GOV'T spending] (an Austrian monetarist trap).

Good thing Americans know monetarism is bullshit, and is only a piss poor way to proceed right?  Right?

Good thing they know their founding fathers didn't want ANY form of monetarism in play and thus forbid it with the constitution.  People knwo that right?

Nope it appears not.  Else you wouldn't have a Ron/Rand Paul, and surely you wouldn't have the Queen of England controlled Tea Party. 

Just remember it's her party, and you'll cry when she wants you to.

Unless of course you remember you're an American, which the Paul's and Obama's don't realize.

Can you face 2011 and know it's already shaping up to be a letdown, because the entire 'debate' will be of mickey mouse things.  The austrians have no position, so giving them power, will only make things worse.  Because they're dumbassess just a different side to the same failed British coin.  So if we want to waste all that is 2011, then let's no realize the Austrians are going to go fuck wild, and fuck tard, on everything, and no politician will ever have been further away from our founding fathers, as to when these non-american spirit Austrian monetarists take over. 

Hybrid Keynes/Austrian Obama with Austrian Paul, the Queen's dream battery. 

Just wait until Nero pronounces his fascist intent taking the Austrian monetarists clues about how to save the monetary system via Simpson/Bowles.  Which is really all you needed to see.  Why would a democrat put a fascist austrian into such a position?  Because Obama is a tool of the monetarists.  Just like Ron/Rand Paul.

If you don't see it by now, god help your idiot soul.  Because no iffs, ands, or butts, you be a fucking idiot if you don't see the truth by now.

Glad I ALREADY discovered many years ago, just about everyone was a fucktard.  Too bad other people still haven't quite figured out the obvious.

So when people are ready for real american leadership to bring us out of this mess, true americans will open their arms and forgive them for their past idiocy.  But first must come the realization that Barack Paul, is not the ideal candidate for anyone, except the Queen of England.  But that's exactly what we have now, a congress and an executive on the same fascist page.  The Barack Paul presidency will be a disaster.  But then again, when did a monetarist in charge not end in disaster?

Good luck in realizing the truth in 2011.  Yes it always gets more complicated than you currently know, that's life, deal with it.

Sun, 01/02/2011 - 13:57 | 842636 cossack55
cossack55's picture

Go away. You are becoming annoying and your premise is ridiculous.

Sun, 01/02/2011 - 14:06 | 842654 dark pools of soros
dark pools of soros's picture

you sound like you might fly a plane into an IRS building soon,  or maybe a starbucks for putting too much caffeine in your morning joe

Sun, 01/02/2011 - 14:13 | 842673 Pants McPants
Pants McPants's picture

OK it's obvious you are full of crap.  How you've been able to pen so many responses in such a short span of time is super-human.  Too bad you don't have the intelligence to match.

Mon, 01/03/2011 - 00:07 | 843527 sbenard
sbenard's picture

Does anyone really read all that prattle? I don't... and won't!

Mon, 01/03/2011 - 04:52 | 843759 Al Gorerhythm
Al Gorerhythm's picture

Tried to read the first. Arrived at an opinion and tried to read the first para of second post, skimmed past the rest. The dude has problems.

Mon, 01/03/2011 - 21:05 | 845498 PeterSchump
PeterSchump's picture

Redneck, is that you?

Sun, 01/02/2011 - 13:11 | 842578 Sudden Debt
Sudden Debt's picture

Just like the USSR fell in a blink of a eye because it went bankrupt, so will the US.

Suddenly, 99% of the USSR budget was cut without any questions.

We capitalists where so happy and made jokes about it.

Now, more then a decade later, it's our turn.

I wonder who will be making the jokes.

And from the ashes from the USSR emerged firstly the oligarchs. Superrich people who had all the power.

And at the end, Russia is still led by a dictator.

But the most important was this: I still remember that when it happend, I was just watching the news and without any warning it happened. Even their own government wasn't fully aware what was happening.

SURE! IT WILL NEVER HAPPEN TO US!!

Because.... it never happened before...to us... that means, never that we can remember.

Sun, 01/02/2011 - 14:09 | 842660 dark pools of soros
dark pools of soros's picture

i hope it does happen here.. as long as we end up with hot chicks like they did

Sun, 01/02/2011 - 13:43 | 842623 Rainman
Rainman's picture

The rats have boxed themselves into the declining revenue/increasing debt paradigm. Now the bond market will make the choices for them. They will saber-rattle as long as possible, then concede to the massive cuts in expenditure that will unwind all the asset reflation schemes and dreams in one full swoop.

Only outside forces will motivate gutless policymakers at this stage because they have no plan .......other than central planning to deceive and manipulate. 

Sun, 01/02/2011 - 15:51 | 842793 dwdollar
dwdollar's picture

+1

We have already passed the point of no return.  Anyone who fails to see this is dreaming.  Politicians AND citizens no longer have the intellect or fortitude to make the kind of changes that are necessary to save this thing.  I predict the same old sh*t this year.

Sun, 01/02/2011 - 14:01 | 842645 max2205
max2205's picture

Looking forward to the SOTU to approaching the UK house of commons with many shout outs like liar, you fucking liar, and resign you fucking bastard.

Sun, 01/02/2011 - 14:41 | 842698 glenlloyd
glenlloyd's picture

The points made in the article are well thought out, and I do agree that the Senate will not be any help at reducing costs, but I don't believe any of the politicrats see the magnitude of the problem (save for RP). Organizations do a very poor job of identifying internal problems and our govt is a classic example.

Certainly people have voiced their opposition to the spending, but I'm not sure Congress has yet the will to recognize that something must be done now, the crisis isn't at the doorstep and we all know that until that day arrives the important decisions will be put off. Representatives will prattle on about unsustainability, but it's all just puffery with none of the hard choices made, like which two dozen depts or agencies get closed down..

Anyway, it'll be interesting but I'm not confident that anything substantive will get done this year.

 

Mon, 01/03/2011 - 00:03 | 843524 sbenard
sbenard's picture

Ditto! You must be a mind reader. I don't think the politicos get it yet, either. Maybe when the treasury market collapses because of a sudden triggering event -- when it's already too late to stop the catastrophe.

Mon, 01/03/2011 - 00:21 | 843547 sbenard
sbenard's picture

I would LOVE to see a showdown. The progressives love big government, and a showdown would force Americans to take a good hard look at what government really constitutes "essential services". Most ISN'T! Eventually, we would be forced to recognize that much of what government does is genuinely NON-essential.

That said, I find myself in the camp with others here that are skeptical whether there will ever be the political will to make the hard choices. I just believe that they will avoid it until a calamity occurs. History suggests that such triggering events occur quickly.

On Dec 10th, the Treasury announced that figures that showed that in the first two months of this fiscal year, debt amounts to 49.65% of the budget. That was before Obama's tax deal with the GOP reduced the Social Security tax and extended unemployment for 13 more months, adding $176 billion more to the deficit for this year. In other words, we are almost certainly beyond the 50% threshold. We're borrowing more than HALF our spending!

I don't see any way to avoid a calamity of biblical proportions, except to be individually prepared for the inevitable armaggedon when it occurs.

Thanks for the insights, all. I learn a lot and gain good perspectives from reading the ideas shared here!

Mon, 01/03/2011 - 02:46 | 843677 TruthInSunshine
TruthInSunshine's picture

The U.S. could go to a 15% to 17% flat tax, no more exemptions or carve-outs at all, and also cut the military budget by a 1/3 to 1/2, and not only would the debt/deficit problem be resolved in quick order, the economic climate would be vastly improved.

1/2 of the 900 billion (direct; not even taking off balance sheet or indirect costs into account)  annual defense budget would save 9 trillion dollars over 20 years, assuming constant dollars, while a flat and fair income tax would encourage people and individuals to work harder and smarter, and to invest, as the now existing law of diminishing marginal returns on work and investment would be significantly reduced or eliminated.

Does anyone legitimately think we'd be less secure or capable of any military response to any provocation with a 50% smaller defense budget? The case could be made that cutting in such a fashion would encourage smarter and more efficient development of more relevant and effective measures and countermeasures, one example being cyber-related systems replacing sitting duck and archaic (and incredibly expensive) aircraft carriers.

Such a move wouldn't necessarily impede or impair the trump card of advanced nuclear weaponry, either, or the corollary nuclear weapon interception capabilities of the nation, either.

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