If you are as confused as I am about this new bill that increases our debt ceiling and is supposed to save the country from defaulting on its debts, it’s probably because we are getting conflicting reports about what’s in it. And if you scan down the text of the bill, you can see that it was not written so that the average individual could understand it. Indeed, I wish that all such laws passed by Congress would be accompanied by a simplified translation into plain English that the average citizen could understand.
Like so many of these laws crafted by congressional staffers, they are written in a kind of Washington legalese meant to make it impossible for ordinary folk to know what’s in them. For example, Nancy Pelosi said that they had to pass the Obama healthcare bill so that we could find out what was in it. Well, I have news. It’s just as impossible to know what’s in it after it’s been passed. Even the title of the law is meant to deceive the average citizen. Its official title is: Patient Protection and Affordable Care Act. Of course it’s nothing of the kind. It is the Federal Takeover of Healthcare Act. It passed the Democrat-controlled Senate on December 24, 2009. The Democrat-controlled House passed it on March 21, 2010, and our Socialist-in-Chief signed it into law on March 23, 2010. The first task of a new Tea Party Congress and White House in 2012 must be to repeal it.
Hours after Congress voted to raise the debt ceiling, the national debt rose enough to consume 60 percent of $400 billion allowed. According to the Washington Times, spending shot up $239 billion on Tuesday, the largest one-day increase in American history.
Other debt news includes this heartening tidbit: Thanks to the big jump, the national debt may well exceed the gross domestic product.
It appears that Republicans and Democrats, Congress and the White House, have arrived at agreement on the debt ceiling. To sum it all up: the debt ceiling will be raised (shocker there) and Armageddon will be averted! Both Republicans and Democrats are claiming victory for their respective sides. All of this was more than just a bit predictable. Republicans swore that they would not vote to raise the debt ceiling unless Democrats in turn swore not to raise taxes. Presumably, then, Republicans believed that we could afford not to raise the debt ceiling, that the alternative to not doing so, though perhaps not all that pleasant, would nevertheless be tolerable. At the same time, they continually told us that unless they agreed to raise the debt ceiling, world-wide economic catastrophe would ensue. So, the debt ceiling would have to be raised.
As GM share prices plunge so do Chevy Volt sales, according to the latest auto sales figures. Throughout July, a whopping 125 Chevy Volts were sold, making the seemingly low 281 units sold in February a groundbreaking month.
GM spokeswoman Michelle Bunker attributed the fallback to "supply constraints," alleging that GM was "virtually sold out" and supply was down nationwide. But Mark Modica, associate fellow at the National Legal and Policy Center, confirmed Bunker’s assertion was false, as he wrote on FoxNews.com:
President Obama announced a deal with Republican leaders to raise the debt ceiling, avoiding default. The deal would cut $1 trillion in spending over the next decade, “the lowest level of domestic spending since Dwight Eisenhower was president,” Obama said.
These governors are not sufficiently aware that “in China’s state-monopoly system of Leninist ‘capitalism,’ its corporations are instruments of national policy, fully integrated with, and subservient to, the Communist Party of China (CPC) and the Peoples Liberation Army (PLA).”
Moody’s announcement on Tuesday that it would retain its AAA rating of U.S. government sovereign debt as a result of the debt-limit agreement came with a warning: The government must rein in spending or risk a downgrade anyway. The deal “virtually eliminated the risk of [a] default,” but the agency warned that “Should the new mechanism put in place by the Budget Control Act prove ineffective, this could affect the rating negatively.” Moody’s added that it wanted to see the United States lower its debt-to-GDP ratio, now approaching 100 percent, to around 73 percent by 2015, and then gradually move the ratio lower.
Credit rating agencies like Moody’s issue opinions as to the credit worthiness of debt issued by various entities including governments, with 'credit worthiness” being defined as the ability to pay interest on and ultimately pay back the debt. Those ratings directly affect the interest rates offered in the issuance of that debt, and changes in a credit rating will impact the market value of the debt before it is retired.
While discussing socialism on a talk show recently, I was confronted with the question: If “capitalism” is so great, why has it failed? Of course, ever since our financial crisis hit, this query has become all too common.
Now, after informing the host that I avoid the word “capitalism” — as it was originated by a communist — and instead prefer “Natural Economy,” I stated the obvious: Blaming our problems on the Natural Economy is like blaming airplane crashes on auto design. After all, there is a reason why Rogers Holdings CEO Jim Rogers said in 2008 that the United States was now “more communist than China.” With thousands of laws, regulations, and mandates and a multitude of bureaucracies that stifle the private sector, our system can hardly be called a Natural Economy. But more on that later. This issue is better illuminated by examining a truth hiding in plain sight.
The compromise bill that emerged Sunday night from behind closed doors is being loudly trumpeted in an attempt to persuade recalcitrant conservatives in both houses to vote for something — anything — in time to avoid the August 2 deadline.
A careful analysis of the ultimate compromise bill yields some important conclusions. First of all, there is nothing in the law or statutes that states categorically that the nation will default if the August 2 deadline isn’t met. This is merely a “best estimate” by Treasury Secretary Timothy Geithner as to when he will run out of options to continuing paying the government’s bills by “borrowing” from various pots of money such as the federal government employees’ retirement plan. If he is able to do that, it’s unclear why he would run out of other options automatically on the 2nd.
Despite the back-patting that many Congressmen are giving themselves as a result of the so-called Budget Control Act of 2011, former U.S. Comptroller General David Walker contends that the United States is still only three years away from becoming Greece. Walker told CNBC, “We are less than three years away from where Greece had its debt crisis as to where they were from debt to GDP.”
Walker’s assertions are similar to those made by GOP presidential contender Ron Paul in June, who predicts that the status of the United States dollar as the reserve currency of the world will end sooner than 25 years and that America is soon to face a financial crisis significantly worse than that of 2008.