Notes On The Debt Ceiling & The Debt Solution

Notes On The Debt Ceiling

  • Failure to raise the ceiling does not mean the government defaults on its debt bonds
  • The “Public Debt Clause” of the 14th Amendment mandates that all federal government debt be honored and payments to be paid on schedule — always and under all circumstances
  • Reaching the debt ceiling requires the government to first pay all debt payments due, with any remaining revenue available for other budgeted expenses
  • To fund the “other budget expenses” which the Administration is required by law to spend as directed by Congress, the Treasury will continue to issue Treasury bonds, as these are not issued by Congress and not within their constitutional competencies
  • The new bond issues will be paid on schedule: refer to above point, “The 14th Amendment requires all federal government debt payments to be paid on schedule — always and under all circumstances”

———————————————-

Further Notes On The Debt Ceiling: The President Is A Poor Negotiator

  • Last December, Mr. Obama agreed to extend the irresponsible Bush-era tax cuts — a concession of weakness to Republican blackmail — and the deal pointedly did not include an increase in the debt limit, so as to forestall another hostage situation.
  • The President seemed clueless then, as now. He asserted that, “Nobody, Democrat or Republican, is willing to see the full faith and credit of the United States government collapse,” and that he was sure that John Boehner, as speaker of the House, would accept his, “responsibilities to govern.” Well, how’s that worked out for ya, Mr. President?

———————————————-

More Notes On A Proper Debt Solution

I like this statement about Obama’s absurd concession on Social Security and Medicare to Republican intransigence:

“driving toward a landmark debt deal that could not pass a bitterly divided Congress”

Clearly, the choice now is to recognize and accept our new world reality of a diminished United States capacity: a need to cut government at every level that does not directly secure the prosperity and safety of the American people

  • End the senseless wars on all fronts (Iraq, Afghanistan, and Libya… including the 40 year failed prohibition of drugs)
  • Bring our troops home and cut defense that met the needs and capacity of an America that no longer exists: +cut 146 security forces and 16 intel agencies/departments in half or more; +close three-quarters of our 700+ foreign military bases; +cancel ships, planes and weapons that exceed our need and capacity
  • Focus on what is mandated in the US Constitution: “common defense,” i.e. NOT policing the world and its oceans (and where in our interests, do so in partnership with our allies, sharing resources and expenses)
  • Saving from above: approximately $800 BILLION A YEAR (FY2011 these cost us upwards of $1.5+ TRILLION)… 

The deficit is approx. $1.4 TRILLION a year, so… additional cuts and enhanced revenue need to be approx. $600 Billion a year:

  • Start with the Vice-President’s bi-partisan committee’s agreed-to-cuts of around $200 Billion per year
  • Include the military savings above of about $800 Billion per year
  • Add approx. $400-500 Billion in increased taxes on the wealthy (from the top 5% but the top 1% particularly)
  • THE BUDGET IS BALANCED!… and “directly secure[s] the prosperity and safety of the American people

——————————————-

PROBLEMS SOLVED:

  • Debt Ceiling Issue Neutered Appropriately
  • Yearly Budgets Balanced Without Undue Hardships



2 responses to “Notes On The Debt Ceiling & The Debt Solution

  • laurensheil

    This is an interesting proposition, however it will never pass congress. Even if the Democrats agree to the drastic cuts you propose Republicans have made it very clear that they will not support tax increases of a single cent. It appears as though both parties are playing chicken with each prepared to drive the economy off a cliff rather than be the first to veer off, it’s a hight stakes game of partisanship that ragardless of the out come, the American People will end up losing in the end.

    • Coronare Modestus Faust

      Agreed. My point is that a viable and proper solution is readily available. We are in an age where the center does not rule; fringe political minorities rule: true here, as well as in the EU. An interesting book, “The Fourth Turning” from 1997 accurately portrays that we’ve been in this cycle before and that we must crash before getting our act together… only to repeat the four-stage process again over another generation. But, reasonable folks should know that a reasonable solution is available if we choose it. I would have thought that the crisis level necessary to effect dramatic change and a turn to a new recovery and growth stage, as defined in the book, was reached by the combined events of September 11 Terror Attacks and Great Recession. Seems we have further to fall in the US and the EU.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s