Team Obama to S&P: “No, really! We know what we’re doing! Just trust us!”

April 20, 2011

Standard and Poor’s recently issued a warning about the credit rating of the United States of America(1). While they tried both to downplay its significance and argue that the warning paradoxically means we have to take on more debt, the truth is that the Obama administration knew this was coming and that it was bad news, because they tried to talk S&P out of it:

The Obama administration privately urged Standard & Poor’s in recent weeks not to lower its outlook on the United States — a suggestion the ratings agency ignored Monday, two people familiar with the matter said.

Treasury Department officials had been discussing with S&P whether the ratings agency should change its outlook on the United States to “negative” from “stable,” an indication that the country could lose its crucial AAA rating in coming years over its soaring debt levels.

Treasury officials told S&P analysts that they were underestimating the ability of politicians in Washington to fashion a compromise to curb deficits, a Treasury official said. They argued a change in ratings was not needed at this time because the debt was manageable and the administration had a viable plan in the works, the official said.

But S&P analysts told Treasury officials on Friday that they were unmoved — and released a report that expressed skepticism that the political parties could come together on how to bring spending in line with revenue.

One wonders if that “skepticism” was expressed via peals of uncontrolled, mocking laughter.

Ed Morrissey examines the faulty assumptions behind Treasury’s claims(2), as well as the drop in consumer confidence following the warning that should have Obama and Geithner worried, but I want to look at another angle.

Ask yourself this: Why did the administration go quietly to S&P to ask for forbearance? Sure, the obvious answer is that a warning would shake markets’ confidence and possibly lead to higher interest costs for the US (read: “us”). But, frankly, the sorry state of US finances, the irresponsible spending and borrowing of the Democrats, and the  “plans” of the administration have been long known by anyone paying attention and not smoking a pipe full of Hopium. S&P’s notice is a trailing indicator, an alarm that sounds after the fire has broken out, not an early warning.

But, what other reason could there be? Oh, yeah, there’s an election coming, and the president has just started campaigning for another four years of selling us down the river bringing us Hope and Change. The last thing he needs is some respected agency announcing to the world in a way that can’t be ignored that Obama cannot be trusted with the nation’s finances.

And there I think is the main reason Treasury was sent on its knees to beg for more time: not to avoid spooking the markets, which already know how bad things are, but to keep the vast unaligned middle of American voters, who maybe haven’t made the connection yet between “Obama” and “fiscal train wreck,” from having the blinders ripped from their eyes, getting mad, and taking it out on The One.

In other words, it was meant to hide the truth from us, the citizens, the one group of people with the power to fire Obama. And that truth is that we are being indebted into national penury by a group of economic incompetents who are now acting like little kids who’ve been caught doing something bad and beg the one who caught them not to tattle.

2012 cannot come fast enough.

TANGENTS:

(1) In my life, I never –ever– thought I would have to write those words.

(2) Seriously? They expected S&P to take the word of the man who admitted he screwed up Turbo-Tax?

(Crossposted at Sister Toldjah)

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An easy way to balance the budget without tax increases

October 5, 2010

The current deficit of the United States -the difference between the federal government’s expenditures and its revenues- is roughly 1.3 trillion dollars, according to the Department of Commerce. That’s how much the government has to borrow in order to finance crucial services, such as Barbara Boxer’s research trips. Members of the Statist Democratic Party tell us that the only way to close this deficit is to raise taxes, whether through higher levies on “the rich” (the definition of which is rather broad) or some form of a value-added tax on top of everything else, or a combination of both.

Dan Mitchell of the Cato Institute calls “bull” on this. In this short video, he shows how one could easily balance the budget by doing something almost unheard of in Washington: showing some restraint.

In earlier years, even the minimal method Dan recommends would have been almost unthinkable, let alone eliminate whole departments of the government. But, if the elections next month and in 2012 turn out to be the true populist, anti-establishment wave that it seems to be building into, we may yet see some restraint at least in Washington’s wastrel ways.

(Crossposted at Sister Toldjah)


Don’t ever complain to me about the money spent on Iraq, again

September 1, 2010

For years –years!– under George W. Bush, the Democrats and their Leftist allies cried rivers of crocodile tears over the money being spent to first liberate, then stabilize that land. They claimed so often and so loudly to be worried about the debts incurred and the deficits run, that they convinced the electorate that they would actually be better stewards of the public’s money, and partly for that were given control of Congress in 2006.

Well, have a look at this:

In less than two years, the Democrats have made spending on the war in Iraq look like pocket change:

As President Obama prepares to tie a bow on U.S. combat operations in Iraq, Congressional Budget Office numbers show that the total cost of the eight-year war was less than the stimulus bill passed by the Democratic-led Congress in 2009.

According to CBO numbers in its Budget and Economic Outlook published this month, the cost of Operation Iraqi Freedom was $709 billion for military and related activities, including training of Iraqi forces and diplomatic operations.

The projected cost of the stimulus, which passed in February 2009, and is expected to have a shelf life of two years, was $862 billion.

The U.S. deficit for fiscal year 2010 is expected to be $1.3 trillion, according to CBO. That compares to a 2007 deficit of $160.7 billion and a 2008 deficit of $458.6 billion, according to data provided by the U.S. Office of Management and Budget.

In 2007 and 2008, the deficit as a percentage of gross domestic product was 1.2 percent and 3.2 percent, respectively.

That’s $709 billion spread over seven years, compared to $862 billion in one-third the time.

In return for our money*, in Iraq we overthrew a brutal, murderous dictator and helped establish what has a good chance to become the first stable Arab democracy ever in the heart of the Middle East, a nation that could, with luck, patience, and skill, become a strong ally against terrorism and the plans of the religious fascists in Tehran. We also crushed al Qaeda in Iraq, forcing it to waste lives and resources there, and exposing its brutality for all the Arab world to see.

In return for the stimulus package, we got… unemployment higher than promised and that may turn structural, a feeble economic “recovery” that threatens to go into another recession, mind-boggling deficits and debt to foreign powers, and, by admission from the President’s own economic adviser, a failure.

You tell me which money was better spent.

And I don’t ever again want to hear a (Social) Democrat complain about the costs of “Bush’s war,” or about fiscal responsibility in general.

*(No, I am not discounting or monetizing the lives lost in Iraq. Any casualties in war are tragedies, however necessary. But this discussion is strictly about the money spent and the Democrats’ rank hypocrisy when they posed as champions of fiscal responsibility.)

via Fausta.

(Crossposted at Sister Toldjah)


So, you want a value-added tax?

July 30, 2010

Democrats and some Republicans are floating the idea of a value-added tax to help ease the crushing deficits caused by the (Social) Democrats’ massive spending binge. Before you say “Sure, why not?”, take a look at the VAT rates that would be required over the next ten years to eliminate the deficit:

(Click to enlarge)

Remember, that tax would be applied at every stage of production, from raw materials to the moment you purchase the item, and the costs would be passed along to you.  Oh, and then you’d pay state sales tax, too.

Still think it’s a good idea?

Here’s a better one. Maybe they should cut spending and borrowing, instead. Idea

RELATED: Reasons why a VAT won’t work.

(via dmataconis on Twitter)


Scary: deficits, debts and unfunded liabilities

May 16, 2010

In this Center for Freedom and Prosperity video, Kelly McDonough gives a primer in the problems we face not just from deficit spending and public debt, but the horrendous amount of unfunded future liabilities (such as Social Security and Medicare) Washington has burdened us with:

Excuse while I crawl under my blanket to hide. Nailbiting


Like leaving a satyr to guard a brothel

February 26, 2010

President Obama has appointed SEIU head Andy Stern to his “deficit reduction commission:”

The president also appointed Andy Stern, president of the Service Employees International Union, and former Young & Rubicam Brands CEO Ann Fudge for the panel, to serve on the panel.

“I am proud that these distinguished individuals have agreed to work to build a bipartisan consensus to put America on the path toward fiscal reform and responsibility,” Obama said in a statement announcing the appointments. “I know they’ll take up their work with the sense of integrity and strength of commitment that the American people deserve.”

Oh, please, Mr. President. If you’re going to play the tool and pay off your union allies, don’t insult our intelligence at the same time. Stern doesn’t give a damn about responsible fiscal policy or even the workers he supposedly represents: he wants the Fed to spend money in ways that help him build his corrupt union empire.

Are even Chicago politics this brazen?

RELATED: More on Stern and the SEIU’s corrupt activities. This bunch of corporatist thugs would fit right in with Mussolini’s Italy.

BTW: The whole concept of a “deficit reduction commission” is a pathetic joke. We already have one – it’s called the United States Congress, and it’s about time they started doing their jobs.

(via Hot Air)


Perspective

February 1, 2010

The next time someone tels you that “Bush was as big a spender as Obama” (usually followed by a mature “nyah-nyah”), show them this:

And note that that Bush-era deficits were declining until the financial crack-up and bailouts of 2008.

There simply is no comparison.

(hat tip: Instapundit via Darcysport)