Are The Republicans Sort Of Right About The Debt Ceiling?

No, this is not a Robbie Republican post. And I'm not saying that holding the economy hostage in order to destroy Obamacare is a sound strategy or a goal we should be striving towards. But at the very heart of things, when you get down to it, there is an aggravating factor that's led us down this path, one that nobody has done anything about since the Clinton administration: the insane growth of the national debt and our horribly unbalanced federal budget.

Now, let me be clear. Refusing to raise the debt ceiling does not reduce the national debt. In fact, if the debt ceiling isn't raised, and we default (can't pay our bondholders), then the national debt will actually increase. You don't reduce your credit card debt by refusing to pay your bills, and the government can't reduce it's debt by refusing to pay its bills. We need to borrow, because we have bills to pay, and not enough tax revenue comes in to cover them. If we didn't borrow money, bills don't get paid, our bonds are worth trash, the dollar loses value, and suddenly, the economy takes a tailspin, reducing tax revenues further, because suddenly everyone's out of a job. It's a crazy mess.

This is why we haven't defaulted. This is why we won't EVER default. This is why Boehner and co. are going to agree to raise the debt ceiling again, despite their whole stink about it. Because they realize a default won't do a thing to reduce our debt, and will leave us far, far worse off.

So why the stink every few months? Why the "hostage taking"? Well, at the very least, it's sparking a conversation. And so far, what's come out of that conversation has been positive for Republicans.

As I said back in December, forecasting our nation's future after falling over the "fiscal cliff":

Yes, taxes go up. Yes, defense spending is cut drastically. But both of these issues are temporary, and everyone knows it. It's very, very easy to cut taxes. It's very, very easy to justify defense spending with the global threats America faces. If no deal is struck by January 2nd, taxes will rise and defense budgets will be cut, sure. But by next January 2nd, it's very likely that taxes and defense spending will be restored to somewhere near their current levels.

The other programs? Programs for the poor and middle class? Programs for the arts and sciences? Programs for education? The Democratic desire to restore funding to these initiatives will be met with fierce resistance from the Republican caucus, and the public support behind them will not be strong enough to overcome it.

 Well, folks, we did fall over the fiscal cliff. The sequester did come into effect. And what happened? Exactly what I said would come to pass.  Military and security budgets have slowly been restored, but the other deep cuts, to programs on the Democratic side of the ledger, remain in place.

The debt ceiling threat is not intended to be a threat, because a threat can actually be carried out. What is it then? A protest. A demonstration. It's intended to rally their side in a battle for more cuts to government programs that Republicans hate. One of those programs is Obamacare.

The Republicans are right to protest increasing government debt. In that sense, the debt ceiling holdout, repeated, again and again, keeps the national conversation coming back to the budget. And that alone is not a bad thing. We need a balanced budget. We need to stop owing so much elsewhere. It is time to get something done on that front, after George W. Bush ignored it for 8 years.

Of course, that's where the Republican high ground ends. Because they're unwilling to tackle both sides of the issue--spending AND revenue. You can't just cut government programs suddenly and completely. It'll create a humanitarian disaster within our borders. A single parent family on food stamps won't immediately be able to pick themselves up by their bootstraps-- its not that easy. If it was, they would have done it already. Corporate taxes and the amount millionaires squirrel away are a joke. The rich enjoy enormous benefits of our free, safe, capitalistic society, and unfettered access to the halls of power-- they should pay for that. And I don't mean in the form of campaign contributions. You can't solve the national debt by cutting alone-- the math doesn't add up. It's just like how corporations can't improve their fortunes solely by firing workers or fixing inefficiencies.... eventually, they have to bring in money. The government can't invent the next iPhone... the only way to bring in more money is by raising taxes, preferably on people who will feel the "pain" the least.

So, yay to the Republicans for keeping an eye on the ball, the long term fiscal health of our nation. But unless they start getting realistic, instead of idealistic, we're not going to get anywhere.

Point of No Return

"Just as a consumer with a lower credit score has to pay higher interest rates on their credit card, a downgrade of the Treasury's debt rating would raise the cost of borrowing. That would increase the nation's interest payments on fresh debt, driving the government even deeper into deficit." -MSNBC

Keeping the debt ceiling the way it is won't reduce debt. It will increase it. All Congress needs to do is do what they've always done for every other president since the beginning of time, including President Bush I and II and President Reagan. The Republicans refuse. Because?

Well, two theories.

One, they really are that stupid. They really do think that debt ceiling and debt are the same thing, and by refusing to raise the ceiling, they're somehow magically reducing debt.

Two, they really want this disaster. They hope for it. With the economy finally starting to recover, they see their chances of power slipping away. If the country crashes, they can play the blame game and convince people it's somehow all the democrats fault.

Anyone have a reason that actually makes the Republicans look smart and not evil? Let me know. I'd love to hear it.

Apocalypse Now

Obama walked out on Eric Cantor yesterday. Good for him.

Keeping the debt ceiling the same will not reduce the national debt. It will not create jobs or end welfare once and for all. The only thing it will do is cause the United States to lose it's position of power in the world, most likely permanently.

Why? Well, lets put it this way. Having debt is bad. Not paying your debts... that's worse.

Unless the debt ceiling is raised, the U.S. will not have enough cash to meet it's financial obligations. Which, yes, includes entitlements and checks for government workers (republicans don't really give a crap about that), but which also includes people who hold American bonds. Bonds are the things the United States sells when they need to borrow... they're like an IOU. People buy those IOUs because they know the United States is good for it. The U.S. is good for it because they can always issue more bonds to raise money to pay off those cashing in their bonds. Yes, the U.S. borrows money to pay it's debts. Maybe you've done the same thing, asking your parents for some money to pay off your credit card bill.

If the U.S. can no longer borrow money to pay its workers or impoverished people, the thinking goes, they will also not be able to pay bondholders. Those IOUs become worthless slips of paper. And that's when everybody stops buying U.S. bonds. And that's when the people who own U.S. bonds get mad that they're never getting their money back. And most of those bond holders are other countries with only friendly-because-its-financially-prudent ties to us.

Do you see where I'm going with this? We don't raise the debt ceiling, suddenly our government doesn't get paid. And while it's nice to pretend the people who help run this country would gladly work for free... that's not the case. Social services, protective services, everything we rely on to keep us safe begins to fall apart. The impoverished people of this country suddenly lose their homes. Families starve. Inevitable backlash ensues. Violence. Chaos.

Then the other countries who hold our bonds, China, Saudi Arabia, no longer have any financial incentive to help us in any way. Terrorism efforts fall by the wayside. Even our soldiers don't get paid.

America falls to pieces. And the pieces are so worthless nobody wants to pick them up.

Maybe anarchy sounds pretty good to Eric Cantor. But it sounds damn scary to me. Let's reduce the national debt... not destroy our nation.

How Republicans Are Holding You, And America, Hostage

Debt is bad. We all know that, right? That's why your parents always tell you to pay down your credit cards, why Free Credit Score Dot Com commercials warn you won't get that car of your dreams. Debt leads to losing everything you own, ending only in suicide or starvation.

So it stands to reason that debt is also bad for America. If the deficit grows, the future of America should be just as bleak, ending in the break-up of the United States into tiny, feudal kingdoms, ruled by armed thugs wearing spike studded football shoulder pads driving around in flame-throwing motorcycles.

So why, good Americans, would we raise the "debt ceiling" without first cutting spending? Republicans, good stewards of our economy who have never, ever increased the national debt, ever, ever ever, are asking that question. And they're also answering that question, refusing to raise the debt ceiling unless austere measures are taken by those out-of-control Democrats.

There's just one problem.

The debt ceiling is not the same thing as the national debt.

Let that marinate for a moment. "National Debt" and "Debt Ceiling" both have the word "Debt" in it, so to an unintelligent person, they may look the same. But they're not.

"National Debt" is how much we're in the hole. "Debt Ceiling" is how much we're allowed to borrow.

While a higher debt ceiling means more borrowing, and therefore, a higher national debt, this DOES NOT MEAN THAT KEEPING THE DEBT CEILING AS IT IS REDUCES THE NATIONAL DEBT OR KEEPS IT THE SAME.

In fact, it actually causes the opposite to happen.

The U.S. is at the debt limit now. And that means it can no longer borrow money. We've established that the government now runs a deficit, and has very large debt. So if it can no longer borrow money, that means it can no longer pay its bills.

According to Slate:

The Treasury would no longer be able to issue new bonds, meaning that the United States would eventually start failing to pay its bills (like Social Security payments) and to service its outstanding debt (paying bondholders interest). The world bond market would likely panic, raising borrowing costs for all individuals and businesses. Moreover, the United States' borrowing costs would never fall as low again—investors would never fully trust the United States to pay back what it promises.

That's just the first stage. Then the stock market collapses to Great Depression levels. Millions are laid off overnight. The U.S. is no longer the world's superpower. We're Greece.

In other words, the apocalypse happens now.

With businesses failing and millions out of work, the U.S. tax base shrinks. Not only can the government not afford to pay anybody, now, it doesn't even have the money to keep the lights on in the Capitol building.

The United States breaks up into tiny, feudal kingdoms, ruled by armed thugs wearing spike studded football shoulder pads driving around in flame-throwing motorcycles.

This is reality. It's undisputed. Failing to raise the debt ceiling will be a catastrophe that will permanently end America as we know it.

And the Republicans are threatening to do it.

Hmm. Maybe these guys are on to something.

It's the equivalent to threatening a bank robber with a nuclear detonation if he doesn't put down the gun. Sure, a nuke would stop the bank from being robbed, but... you know... the bank's kind of a moot point after the mushroom cloud.

Debt is bad. We all know it is. But there are better ways to force the government to take it seriously other than threatening the extinction of the United States. There's better ways to reduce the national debt than reducing our country to ashes.

It's time to tell the Republicans to put down the nukes already.

Nation in Debt? Time For A Little Bit Of Luck



The national debt is approaching 11 trillion dollars, and with all the money Congress is giving out during this economic crisis to just about any rich guy who asks for it, that figure is bound to skyrocket. With our government’s finances in worse shape than Jessica Simpson, how can we find the money to improve our nation’s crumbling infrastructure and fund the programs that are vital to a healthy, non-George-Bushy America? One solution is surprisingly simple.

It’s time to get lucky.

To be more specific, it’s time the United States joins the UK, Mexico, South Africa and a slew of other countries in creating a National Lottery.

Currently, forty-two states bring in millions upon millions each year by taking advantage of one of humanity’s oldest vices, gambling. That money is typically earmarked for education and other important state initiatives. A National Lottery could be used to shore up an ailing social security program, fix our country’s crumbling electrical lines, roads and water mains, or bribe Sarah Palin to simply disappear.

The United States first experimented with a National Lottery back in 1776, when the Continental Congress approved the sale of one million $10 to $40 tickets in order to raise money for the American Revolution. Unfortunately, at that time, the only people who could afford tickets at those prices were the wealthy… who were more likely to be Tories, British supporters. Not surprisingly, the lottery idea was scrapped.

The main problem these days would be political in nature. First, the religious right likes gambling as much as they like a cross made out of cocks. Second, states with existing lotteries may feel threatened. And third, in order to establish a National Lottery, funds must be established to create a federal bureau that would administer the game. None of these challenges is insurmountable, however.

Presumably, promises that the lotto funds would go partially to charitable institutions could placate large portions of the religious right (for instance, the UK lotto has provided 20 billion pounds to “good causes” since 1994). Prices on tickets could be set higher than those offered by state lottos, aiming at a different demographic of ticket buyers. And since we’re already providing private jets and lavish vacations for failed CEOs, what’s a few more bucks to create the Bureau of Who Wants To Be A Millionaire?

And there’s evidence that in these tough times, people are buying lottery tickets more than ever. According to Scientific Games, maker of scratch-off tickets, revenue is up for scratch-off and daily tickets in 25 states with lotteries

Now, I’m not good with math, but I’ll attempt to give you a rough idea of the money we’re talking here. According to a study of Texas lotto players conducted by the University of Houston's Center for Public Policy, 36% of Texans bought at least one lottery ticket last year. Extrapolate that 36% figure across the country, and that’s 109,376,871 people buying lotto tickets.

Charge those guys $10 a ticket…and, uh…

Hold on…

You got more than a trillion dollars. $1,093,768,710 to be exact. You think the U.S. can’t use that money? Couldn’t you? Maybe you’d be the lucky sucker who becomes the first government-made millionaire. Maybe the country’s debt won’t be the only one eased by this.

Hey, you never know.

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[You can read this and other fascinating random combinations of words and letters at Slow Century Magazine, a place where I will hopefully contribute to more often in the future.]

A Changing Landscape

While the whole world focuses on President (elect) Obama, and speculates on what changes he will bring to this country, the new president of the Maldives has just announced concrete plans to change some things about his tiny island nation.

He wants to change the size of it.

Much of the Maldives is a mere 3 feet above sea level, which means that if a polar bear living in the Arctic Circle accidentally spills his glass bottle of Coca Cola into the ocean, the nation will be inundated with floods.


The Real Cause Of Global Warming

Unlike previous rulers seeking to expand their territory, President Mohamed Nasheed is looking to make a purchase, not an invasion.

From the BBC:

Mr Nasheed's plan is to create a "sovereign wealth fund" using tourism revenues to buy land so that future generations will have somewhere to rebuild their lives if they have to leave.

He wants somewhere within the region, where the culture is similar - possibly India or Sri Lanka.

Unfortunately for Mohammed, it's unlikely that India or Sri Lanka is looking to sell. India's so against giving up territory that they're fighting tooth and nuke with Pakistan over a tiny remote mountainous region, and Sri Lanka is a pretty tiny nation to begin with.

Is there any nation in desperate need of cash that can grant the Maldivians a bigger homeland? Yes.

The U.S.A.

Let's face it. We're going through a recession. We owe so much money to China that George W. Bush has agreed to wash president Hu Jintao's car every other weekend. The national debt is climbing everyday, thanks to an endless war. At the rate we're burning up money, it won't be long before we become like Worm in the movie Rounders, depending on Matt Damon to win big in a poker game and save our ass.

And the U.S. has plenty of worthless properties in the South Pacific:


The Northern Mariana Islands are not too far from the Maldives, and it's highest peak is 3,166 feet above sea level, high enough to avoid drowning in the event of a global meltdown. Plus, Maldivian men would be happy-- the islands boast the lowest male to female sex ratio in the world: an average of 76 men to every 100 women (according to wikipedia).

But yeah, those islands have people that might not be happy joining the Maldives. So what about Jarvis Island? It once held the town of Millersville, which was abandoned during the second world war. Sure, its a bleak place with no fresh water, but this bargain-bin island may be just what the Maldives ordered:


Jarvis Even Comes With Its Own Bird-Doo-Lined Walking Path!!

Perhaps the Maldivians want a place with more history? Look no further than Palmyra Atoll, which boasts the Pacific's largest collection of unexploded World War II ordinance. It was also home to a notorious murder on the high seas. It's also got a lovely bunch of coconuts, so the inhabitants won't starve:


One Of The Least A-Bombed Atolls In The Pacific!

But I'm sure that after all these years on an island, some Maldivians might be cravin a little mainland. That's why I propose something a bit radical:

Sell Alaska.

Let's face it. Sure, it's a beautiful place, but how many of us will ever visit it? Yeah, it's got oil, but we can work out a deal when the Maldivians make the purchase. Alaska is like the appendix of America, a fine but superfluous part of our country that has the potential at any given moment to flare-up and spew poisonous Sarah Palin into our 49 other states.

We bought Alaska for $7,200,000 back in 1867. Accounting for inflation, rising land values, and significant because-the-Maldives-is-desperate markup, I think we can easily get 7 BILLION.


Motivated Seller?

Yes, the Maldivians would have to get used to the cold, but hey, when your nation is about to be under the sea with Sebastian the Crab, you have to make trade-offs.

Think about it, President Nasheed. You could use the land, and we could use the money. Make an offer.

And remember, as broker, I take 20%.