I’ve posted several articles to argue the case that the membership of the US House should “do nothing” and refuse to increase the debt ceiling.
An assumption of this action is acknowledgement that the general government must shrink over time, and not be allowed to expand on some ‘lesser growth trajectory’.
The logic of this proposition accepts the fact that such action would be painful. However the pain is necessary for us to return these united States to fiscal solvency.
The alternative is dramatically stated in the case presented by the National Inflation Association:
“By the end of 2011, we are confident that not only will we see QE3 under a new name, but the Fed will act to force banks to lend their $1.6 trillion in excess reserves. It is a joke that we are debating spending cuts of $70 billion over the next two years, when only very dramatic across the board spending cuts of 50% or more of the total budget will give the U.S. any hope of balancing the budget and avoiding hyperinflation. Best case scenario, if the U.S. government cuts spending by 50% or more in all areas of the budget including entitlement programs and is able to prevent hyperinflation, NIA still believes we will see the U.S. dollar lose 90% of its purchasing power this decade with the price of gold rising to above $16,000 per ounce.”
Source: National Inflation Association
Look at this carefully … the options are to continue to spend, and ruin the country by hyper-inflation, or immediately reduce the US budget and accept an awful but lesser destruction of the value of the dollar.
So what do we anticipate from John Boehner and Harry Reid? A compromise that will allow the government to continue to grow, but on some lesser trajectory. Wonderful !
This is exactly what the guest host of the Neil Boortz show described earlier this week when he made a comment which I will paraphrase as:
“When Evil forces a compromise with Stupid, all you get is Stupid Evil.”
An example of one possible Stupid-Evil outcome of the proposed Reid-Boehner compromise has been identified:
Some advocate that the BBA should require only that federal outlays cannot exceed federal tax revenues. They see it as two numbers, where the former must be less than the latter.
But this misses one critical point. If BBA only requires government to spend less than it collects, there are two ways to fix it. The first is cutting spending, and the second is raising taxes.
Many supporters of a clean BBA are not too worried. Although acknowledging the risk, they’re willing to take it on the grounds that they can use the prospect of electoral defeat to exert political pressure on members of Congress to ensure they don’t vote for tax increases.
But what about the courts? What if a judge orders a tax increase?
A judge could, if the BBA only says that spending must be less than revenues.
Putting the power to tax in the hands of the Judicial …
That, my friends, is STUPID-EVIL.
A Republican in the headlights, not recognizing the oncoming car as danger…
UPDATE – 1 August 2011
The “Boehner Compromise”:
Lie once again about “cutting spending.” It does no such thing. It increases spending – every year. Bogus and outright-fraudulent “baseline budgeting” means that if they intended to boost spending $300 billion but only increase it $200, that’s a $100 billion “cut.” If you ran your household like this you’d be broke in a week. For the US, it will take a bit longer.
No tax increases. That’s nice, but let’s not forget that while the Democrats scream about the “Bush Tax Cuts” the FICA tax cut was theirs. Obama signed it. You cannot keep reducing income and increasing spending forever.
The cuts, fraudulent though they are, aren’t even real anyway – and not binding either. There’s nothing before 2013, which means a downgrade is almost certain. Further, raising the debt ceiling now for the whole among but allegedly finding the “cuts” over 10 years is an outright fraud by a ratio of 10:1.
A 2013 timeline for actual changes means nothing, since the next Congress is not bound by what this one does. Period.
Sequesterization didn’t work in 1997. It won’t work in 2011 either.
We failed to get to $4 trillion. That’s what S&P said they needed, and they said they needed to see that within the next three years. Now we find out if S&P has any balls.
We also get to find out if the so-called “Tea Party” is worthy of the name.
Source: Market Ticker
This deal is a complete and total sham, and will do nothing to prevent hyperinflation. In no way will these spending cuts be mandated and nothing will force future Congresses to abide by them. Even with these cuts, government spending is going to increase every single year for the next decade. As price inflation spirals out of control in the years ahead causing the purchasing power of the dollar to plummet, all government employees will demand higher salaries and it will cost more to run all parts of the government. Future Congresses will raise spending and make the spending cuts proposed in this deal meaningless.
NIA believes that all of the events that took place in Washington this weekend were scripted in advance. It is likely that both parties knew from the beginning what deal they would ultimately agree to, but came out with these other proposed bills in order to satisfy tea party supporters and make them think that their efforts are making a difference. The reality is, although the tea party movement helped Republicans take over the House of Representatives so that Democrats didn’t have free rein in Washington, most of the new Republicans elected to Congress haven’t followed through with their promises and have failed to make any kind of a positive difference.
Source: email “Important Debt Ceiling Update”, from National Inflation Association