Democrats Hold Americans Hostage as They Drive Over Fiscal Cliff

Rahm Emanuel’s dictum, ‘never let a crisis go to waste,’ is playing out right before our eyes.  The Democratic Party’s number 2 man, Rep. Steny Hoyer, shamelessly used the Connecticut tragedy as a tool to increase our national debt:

"It's somewhat like taking your child hostage and saying to somebody else, 'I'm going to shoot my child if you don't do what I want done.' You don't want to shoot your child. There's no Republican leader that wants to default on our debt, that I've talked to," Hoyer said at a Capitol Hill press conference.

First of all, I’ve never heard of a hostage taker threaten to shoot his own child unless some third-party stops spending his money.  Maybe there has been.  I don’t know.  It doesn’t seem plausible to me.  But then again, we are in the age of Obama.

The Democrats recognize they’re in a win-win situation.  They know the majority of their voters are uninformed teat squawkers, and will exploit their stupidity as a means to expand the power of the federal government.  The Democrats are so cocky, they're willing to drive us over the so-called fiscal cliff, as reported by the Politico: 

In a letter released Wednesday, Geithner said the extraordinary measures by the Treasury Department will give the government about $200 billion of breathing room, which would typically give the nation about two more months until it faces default on its legal obligations.

But Geithner said because of the unresolved fiscal cliff, this situation was different.

“Given the significant uncertainty that now exists with regard to unresolved tax and spending policies for 2013, it is not possible to predict the effective duration of these measures,” Geithner wrote.

In fact, with tax increases and mandatory spending cuts set to kick in as part of the fiscal cliff, Treasury may be able to hold off on hitting the debt limit for a longer period because the government would have more revenue and less spending.

Wow, it sounds like the writers at the Politico are cheerleaders for this Thelma and Louis scene.  And since we’re alluding to movie scenes, why is Treasury Secretary Timothy Geithner referring to the national debt as an extraordinary measure?  Does this mutation of fiscal responsibility have the superpowers of an X-Man?

 

Geithner indicated that if the year ends without a fix to the fiscal cliff, the extraordinary measures would last longer.

“If left unresolved, the expiring tax provisions and automatic spending cuts, as well as the attendant delays in filing of tax returns, would have the effect of adding some additional time to the duration of the extraordinary measures,” Geithner wrote.

I must say the Democrats are in a “League of Their Own.”

Source: http://www.politico.com/story/2012/12/treasury-tim-geithner-us-will-hit-debt-limit-new-years-eve-85508.html#ixzz2GJ8eYjTN

 http://politicalticker.blogs.cnn.com/2012/12/27/hoyer-compares-gop-debt-limit-tactics-to-hostage-taker-threatening-to-shoot-child/?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+rss%2Fcnn_politicalticker+%28Blog%3A+Political+Ticker%29

North Carolina's Fiscal Gordian Knot

North Carolina has a fiscal Gordian knot to tackle.  Now, that we have a republican governor and republican dominated legislature, whom we consider adults, unlike the teenagers who ran up these huge debts, maybe we can confront this budget monster head on.  Here is an op-ed by John Hood, the president of the John Locke Foundation, outlining the steps that need to be taken.  By the way, this was published by the Democratic Party’s mouthpiece the Charlotte Observer.   

Newly elected Republican Gov. Pat McCrory and the newly reelected Republican legislature may have an ambitious agenda for dramatically cutting taxes or adding new programs. But there is a fiscal constraint on any such agenda: Past governors and legislatures didn’t pay for what they spent.

Like almost all states, North Carolina has a constitutional requirement that its budget be balanced. But the rule applies only to current expenses in the General Fund operating budget. It doesn’t constrain the issuance of debt for capital expense. It doesn’t account for depreciation. And it doesn’t apply to promises made during a fiscal year to pay employees in later years.

Essentially, the state’s fiscal rules operate on a cash basis. They don’t preclude the state from accruing liabilities to be paid from future revenues not yet collected or even projected at current tax rates.

So how large is the pile of unpaid bills McCrory and the legislature have inherited? My lowball estimate is $72 billion. Let’s break it down.

The unfunded liability gaining the most political attention right now is the $2.5 billion the state owes Washington for unemployment-insurance payments in excess of UI payroll-tax collections. But that’s one of our smaller debts. If you add up bonds and other obligations, the state’s formal debt stood at about $8.5 billion last year, most of it in the form of special obligations (not authorized by referendum).

So far, we’re at $11 billion. Next, add $30 billion. That’s the current estimate of how much the health plan for teachers and state employees is in the hole for promised future spending on retiree health benefits.

Next, add another $30 billion. That’s one estimate of the unfunded liability in North Carolina’s pension fund for teachers and state employees that would be revealed if the system used more-realistic projections of future investment gains. Next, we need to account for the future cost of deferred maintenance in government infrastructure. In transportation alone, the figure starts at $1 billion (remember, this is to repair existing roads and bridges, not add new capacity).

It would be bad enough if the preceding $72 billion in unpaid bills was the end of the story. But it isn’t. Remember that all North Carolina taxpayers are also federal and county taxpayers, and many reside in municipalities. These other governments have built IOU piles of their own.

These federal and local debts at least constrain how much more indebtedness or taxation can be imposed on North Carolinians by the state. In some cases, they may also impinge directly on future state budgets – as the cash-strapped federal government pushes additional unfunded liabilities down and some cash-strapped localities get their liabilities pulled up into the state budget.

The truth is that some public liabilities will never be financed. Federal entitlements will be cut. So will North Carolina’s retiree health benefits. But the state can’t repudiate all past promises to pay. So the new leaders of the state have two fiscal responsibilities. The first is to begin to accumulate cash to satisfy existing debts and unfunded liabilities. The second is to offset any new state programs or tax cuts with budget cuts (remember, any apparent General Fund surplus doesn’t account for the unfunded liabilities).

Past politicians didn’t even try to do these jobs. It’s time for grownups to step up.

Mr. Hood, you can expect any attempt at fiscal reform by republicans will be greeted with a Charlotte Observer temper tantrum.

Source: http://www.charlotteobserver.com/2012/12/18/3734231/gov-mccrory-will-be-greeted-with.html#storylink=cpy

Democrats Want More Money to Throw Down the Potomac Black Hole

Do the Democrats really want to avert the fiscal cliff crises?  I don’t believe they do.  I believe they want it to happen.  For them, it’s all about politics and this past election demonstrated that a majority of the voters want a paternalistic government that panders to their needs.  A responsible government is not what the people want.  Today’s Americans don’t want to earn money the old fashioned way; they want to confiscate it.  And the Republicans are just a bump in the road on the way to the candy store.
 
Republicans would most likely bear most of the public blame if policymakers deadlock. The Pew Research Center found that 53 percent of Americans would fault GOP lawmakers if Washington fails to avert the fiscal cliff; only 29 percent would point the finger at Obama.

“This is very, very important that we hang in there to essentially get the revenue component,” said Rep. Peter Welch (D-Vt.). “I favor an agreement before Jan. 1, but I’m skeptical that our leadership may be able to reach one. If it’s necessary to wait to get a good deal, let’s do that.”

Murray declared in a speech this summer that she would push budget negotiations into 2013 if Republicans don’t cave on taxes for the rich. The fourth-ranking Senate Democrat repeated the threat in a Nov. 11 interview on “This Week.”

“If the Republicans will not agree with that, we will reach a point at the end of this year where all the tax cuts expire, and we’ll start over next year,” Murray said. “And whatever we do will be a tax cut for whatever package we put together. That may be the way to get past this.”

The fiscal cliff is a $503 billion mix of tax increases and spending cuts that experts predict will shock the economy in 2013 unless Washington devises a solution to avert it before the end of the year. The cliff includes not only the Bush-era tax cuts and the automatic budget cuts known as the “sequester” but also the payroll tax cut, jobless benefits and reimbursement rates for doctors who serve Medicare patients.

Spending is our problem.  Throwing more money down the Potomac Black Hole is not the solution.  Unfortunately, we’re going to witness the demise of the republic within our lifetime.

Source: http://www.politico.com/news/stories/1112/84207.html#ixzz2DNr66H43