You expect adults to be fiscally responsible—and they mostly are, with their own money. But, once in office they realize there is so much they can do–since they now own your wealth, savings and paycheck.
“At the present time, the United States has borrowed all the money that, under law, it can. To borrow more money, the federal government must raise what is called the “debt ceiling.” To date, Republicans and Democrats cannot agree on raising the debt ceiling. The Republicans are demanding spending cuts. The Democrats, including President Joe Biden, do not agree with the Republicans.
Usually, the two major parties agree to compromise on the debt ceiling. But currently, there is no compromise in sight.
No need to compromise on the debt increase. Do not do it. Instead, cut the spending. Become adults, before you kill off our economy. For starts do not make it profitable for people not to work. End those policies and a lot of the financial problems would be solved.
By Richard Colman, Exclusive to the California Political News and Views, 1/30/23
The federal government is out of control.
Government taxes too much and spends too much. The result for the average American is a lower standard of living.
The national debt refers to money owed by the federal government. When Andrew Jackson was president (1829-1837), there was no national debt.
When government has debt, it must borrow from individuals, corporations, and foreign governments (like Japan and China). The borrowing is done by selling government bonds –- often called U.S. Treasuries. The bonds pay interest. Because the United States has a record of paying back bond holders, buyers of bonds feel that the bonds are a safe investment. Some observers say that the world’s safest investment is American bonds.
By 1981, the national debt was $1 trillion. Today, that debt is $31 trillion.
At some point, buyers of American bonds may believe that they (the buyers) will not be paid back. If bond holders are not repaid, they may never buy American bonds again.
At the present time, the United States has borrowed all the money that, under law, it can. To borrow more money, the federal government must raise what is called the “debt ceiling.” To date, Republicans and Democrats cannot agree on raising the debt ceiling. The Republicans are demanding spending cuts. The Democrats, including President Joe Biden, do not agree with the Republicans.
Usually, the two major parties agree to compromise on the debt ceiling. But currently, there is no compromise in sight.
To get government debt under control, the Simpson-Bowles Commission was established in 2010. At the time, the President was Barack Obama, a Democrat. Simpson refers to Alan Simpson, a former Republican senator from Wyoming. Bowles was Erskine Bowles, a Democrat, who worked as chief of staff for President Bill Clinton, also a Democrat.
The Simpson-Bowles commission proposed three income-tax brackets: 12%; 22%; and 28%. Low-income people would be in the 12% bracket. High-income people would be in the 28% bracket.
The commission also proposed others measures, such as capping government spending at 21% of gross domestic output or GDP. GDP refers to the nation’s total output of goods and services. (Today, the nation’s debt is 103% of GDP.)
The commission also made other recommendations:
· reducing government spending.
· cutting health-care spending.
· fixing Social Security’s constant debt problems.
· ending tax loopholes.
The commission made its final report in late 2010. The federal government ignored the commission’s recommendations.
The current outlook is not good. Republicans in the House of Representatives insist on spending cuts. The Democrats, including President Joe Biden, have said that they will not cooperate with the Republicans.
Extremist elements in both parties are making compromise difficult, perhaps impossible.
Right away, the debt ceiling must be lifted. Otherwise, holders of American debt will lose confidence in buying additional debt.
Within a few months (like April 2023), the Republicans and the Democrats must compromise on the debt ceiling. Failure to do so, will jeopardize the federal government’s ability to pay for Social Security, Medicare, national defense, and other expenses. The stock market might crash.
A new commission, similar to the Simpson-Bowles commission, must be established.
The big questions is: Will compromise take place before it’s too late? America is too important to experience a fiscal calamity.
About Stephen Frank
Just to put things in prospective, the value of a $1 in 1981 is equal to $3.27 today. . In 1981 the national debt was $1 trillion . For everything to remain equal, the budget should not be $31 trillion. It should be $3,270,000,000,000 31 trillion is 31 times what the debt was in 1981. To put it in perspective, if you earned $40,000 in 1981 you would have to earn $1,240,000 today ($40,000 X 31.).
When one understands that MANY of our politicians want us in major debt it has to include the ultimate goal of all governments being CONTROL. That is not just the objective of the liberals, but the objective of the majority of politicians. Look at how many/most of our state governors have taken us on a merry go round ride with ever increasing efforts to increase their powers. Do not doubt what they are up to – with many powerful corporations, individuals and politicians backing them with money and control at their level.
Under the guise of “the pandemic”, the federal government created at least $4 trillion dollars at the printing press and injected it into the money supply in less than 8 months. the inflation is a direct result of that action. But the federal government refused to acknowledge that was a one-time occurrence. Rather than reduce the spending to account for that deluge of cash, the Democrats and Biden demand that level of overspending be institutionalized as the new normal. Our current national debt is the largest of any nation in the world’s history, and will never be paid off. Republicans should make the budget cuts they know are necessary and send that bill to the Senate. If Senate Dems refuse, and if Biden refuses, then the debt ceiling scenario is on the Democrats. Frankly, the pin on this grenade needs to be pulled, sooner rather than later.
It is interesting that the Democrats dig in their collective heels when a reasonable 1 Cent reduction in dollars spent is proposed.
BUT when they propose massive welfare that the nation cannot afford and Republicans object it is bigotry and race…..
now why do you continue to vote D?