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President Obama, the National Debt Crisis and the S&P Downgrade

On Friday August 5, 2011 about 9:30 pm, Standard and Poor's made good on their promise to downgrade the long-term bonds of the USA. For the first time in history the USA saw it's stellar credit rating take a hit. Where was our President all weekend in this time of need?

He went to Camp David. Why? Who knows, but I do know there is a golf course nearby. My guess is he got in at least two rounds, maybe three. He'd get the course to himself because the Secret Service doesn't want any rogue golfers on the course with something other than clubs in their bags. When you're all alone on a golf course, you can play 18 holes in as little as three hours.

In about an hour or so, the US stock markets will open. It's going to be a blood bath. Billions of dollars of wealth are going to be wiped out when the market opens.

A true leader would have been on television yesterday trying to calm the fears of the nation and sending a message to all of the world markets that we were going to make amends.

A true leader would have been on television leading with a plan. But Obama doesn't have a plan, or does he? Perhaps he's dumb like a fox.

You want my opinion? I actually feel like he's doing everything possible to destroy America's financial system. Bring everyone to their knees so they feel the only hope is the government. All you have to do is look back in history at other socialistic takeovers of other countries around the world. Economic bedlam almost always preceded such a change in government.

Have you really gotten your head around the National Debt and how serious the issue really is? When you start hearing numbers all the time, they sort of lose their impact. I feel it's best to show them graphically.

You look at the graph below and tell me if you think we're in trouble. Imagine instead of the graph being titled National Debt Since 1940 it said, "Your Monthly Bills Since 2000".

Do you think you'd be in a little trouble? If you think debt is good and we need to spend more, tell me where the money is going to come from to pay all the money back?

Oh, sure, tax the rich. Tax the evil corporations. Hey? Who passed all those laws? Wow, let's go look at the Congressional Record to see who voted for all those loopholes.

We're in deep trouble. We need to get the 50% of the people who pay no taxes to start to do their fair share. Everyone needs to pitch in to start to pay down the debt.

Oh, and the absolute BIGGEST thing to do is to cut spending. Freeze spending now and start to cut back 2 percent per year across the board. That's not draconian. It's a start.

If you have an idea on how to save the nation, share it below in the comments.

NationalDebtGraph.jpg

Remember, comment below. Show the world how you feel. Comments are like votes. But unlike voter fraud, just comment once. Get to the point and move on.

Comments

Tim,
There is so much that could be done. I wish I were smart enough to come up with all the correct answers.

I do have some thoughts, but I could be completely off base with them.

1. Do away with the Dept. of Energy
2. Do away with the Dept. of Education
3. Have agencies make recommendations to congress for rules and enforcement instead of them having the power to regulate.
4. Make the tax code simple, or get rid of it with a flat tax or a national sales tax.
5. Make our corporate tax competitive with the rest of the world.
6. Stop being the world's policeman (damn I hate to agree with Barney Frank) and get rid of our military presence in Western Europe. It is past time for them to take care of their own defense.
7. Foreign aid is something that should be eased out. If a country is deserving to be a country, they should be able to provide for themselves.
8. Make it more expensive for a company to move offshore. (don't know how to get this done, but it sounds nice.)
9. Give massive breaks to manufacturing (ie, the steel industry) so they would return.
10. Term limits.

These few come to mind. I am sure I am trying to simplify a number of things, but, in my opinion, the problem is government, not business.

As for taxing the rich, a myth. Fix the tax code.

Bob in VA on August 8, 2011 11:24 AM

They (white house and their pocket media) have the unmitigated gall to blame the Tea Party Republicans. Of course they are scared of them, so they have to try to assassinate them with and in the media.
All of the credit cards that the "little guy" has will see interest rate increases, thanks to an ill-prepared White House inhabitant and the morons who voted him into office.

Dr. George Ellwanger on August 8, 2011 11:41 AM

I forgot to include the biggest farce pulled by Washington:
11. Repeal Obamacare!!!!!!!!

Bob in VA on August 10, 2011 11:29 AM

The Clinton administration ran deficits every year.
The FY ending 9/30/1993 the debt was 4.4 trillion. The deficit for the FY ending 9/30/1994 was 281 billion and the debt was 4.7 trillion.
Instead of listing them all, I will skip to the FY ending 9/30/2000. The debt was 5.67 trillion and the deficit was 17.9 billion.
The debt on 9/30/2001 was 5.8 trillion.
In 1998 and 1999, Government lock boxes loaned the government around 800 billion. This is inter-government debt which was not counted in the deficit.

Bob in VA on August 11, 2011 7:03 PM

Lou, these are some links that show there was no surplus. You have to look at both links to see beyond 1999 into 2000 and 2001, since these were from the Clinton years.
http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm
http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm
This link shows how the inter government debt plays a part in the http://www.ohiomm.com/blogs/da_kings_men/2009/11/30/the-myth-of-the-clinton-surplus/deficit
I just picked one, there are many out there.
Our debt is based on outstanding Treasury bonds. While countries like China hold a very large amount, Social Security (which is still not part of the general fund) holds quite a portion.
The interest from these bonds is going to go lower, so it would seem that putting the "social security trust fund", LOL into a place that could get better return would be logical.
I am no economist, but have taken some econ in college. Just a simple guy here trying to make heads and tails out of what is going on.


Bob in VA on August 12, 2011 11:27 AM

Lou, I was not saying it hasn't been done before or since, and not going to argue either side. I was pointing out the myth of the Clinton surplus.

I came across this and think it is rather funny.


2011 Federal Budget Deal

Federal Budget: $3,820,000,000,000 (3.82 Trillion)
Income: $2,170,000,000,000 (2.17 Trillion)
New Debt: $1,650,000,000,000 (1.65 Trillion)
Amount Cut: $38,500,000,000 (38.5 Billion), about 1% of
the total budget

Harry Reid is calling this a “historic amount“.

The President said it is a “historic deal”.

John Boehner simply said, “We’ve come to an agreement”.

Let’s Put This Into Perspective. It helps me to think about these
numbers in terms that I can relate to.

Let’s remove nine zeroes from those numbers and pretend this is a
monthly household budget for the fictitious Jones family.

Amount of money the “Jones" family spent this month: $3,820

Total income for the “Jones" family this month: $2,170

Amount of new debt added to the credit card this month: $1,650

Outstanding balance on the credit card: $14,271
(This represents our national debt).


So last week, the “Jones" sat down at the kitchen table and agreed to
CUT: $38 from their monthly budget. A historic amount ?

R U Impressed?

Bob in VA on August 12, 2011 1:27 PM

Reading Krugman (past and present articles), it is no wonder that we are in such bad shape. I would suggest you go to the library and pick up William Baker's "Endless Money: The Moral Hazards of Socialism".

And no, a slow-witted person cannot always understand difficult subjects and ideas no matter how good the explanation. And, a truly intelligent person already knows that he doesn't know everything and usually has an open mind.
One can go and find silly quotes anytime. Using one of Tolstoy's, an extreme radical in his latter years, was not a good idea. One of my favorite quotes "You can't fix stupid" applies. Ron White (2006).

The government spending is about the same thing as a family spending money. There are certain necessities (defense, infrastructure, etc) and then the feel good items (obamacare comes to mind). I could go on with analogies.

Back to Krugman for a moment. First, he has never held a "real" job. Ivy league educated, (I suppose he never had to worry about where his next dollar was coming from) and a academic. If someone is going to write, I would prefer reading a person that has had some real life experience.

No, the tea party does not go around pissing on other people's ideas or opinions. As a tea party member, I can say that the people I associate with at our meetings are from all walks of life. No, that is not quite true. We have no one there on welfare, but people that are concerned about the direction the country is taking. We have speakers at our meetings, and yes, some are liberals that give their take on various subjects.

It seems to me that liberals piss on anything that comes from the tea party.

Bob in VA on September 11, 2011 11:22 AM
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