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Archive for Sunday, January 16, 2011

Record $14 trillion-plus deficit weighs on Congress

January 16, 2011

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— The United States just passed a dubious milestone: Government debt surged to an all-time high, topping $14 trillion — $45,300 for each and everyone in the country.

That means Congress soon will have to lift the legal debt limit to give the nearly maxed-out government an even higher credit limit or dramatically cut spending to stay within the current cap. Either way, a fight is ahead on Capitol Hill, inflamed by the passions of tea party activists and deficit hawks.

Already, both sides are blaming each other for an approaching economic train wreck as Washington wrestles over how to keep the government in business and avoid default on global financial obligations.

Treasury Secretary Timothy Geithner testifies Dec. 16, 2010, on Capitol Hill in Washington before the Congressional Oversight Panel hearing on TARP. The United States just passed a dubious milestone: Government debt surged to an all-time high, more than $14 trillion. Geithner says failure to increase borrowing authority would be “a catastrophe,” perhaps rivaling the financial meltdown of 2008-2009.

Treasury Secretary Timothy Geithner testifies Dec. 16, 2010, on Capitol Hill in Washington before the Congressional Oversight Panel hearing on TARP. The United States just passed a dubious milestone: Government debt surged to an all-time high, more than $14 trillion. Geithner says failure to increase borrowing authority would be “a catastrophe,” perhaps rivaling the financial meltdown of 2008-2009.

Bills increasing the debt limit are among the most unpopular to come before Congress, serving as pawns for decades in high-stakes bargaining games. Every time until now, the ending has been the same: We go to the brink before raising the ceiling.

All bets may be off, however, in this charged political environment, despite some signs the partisan rhetoric is softening after the Arizona shootings.

Treasury Secretary Timothy Geithner says failure to increase borrowing authority would be “a catastrophe,” perhaps rivaling the financial meltdown of 2008-2009.

Congressional Republicans, flexing muscle after November’s victories, say the election results show that people are weary of big government and deficit spending, and that it’s time to draw the line against more borrowing.

Defeating a new debt limit increase has become a priority for the tea party movement and other small-government conservatives.

So far, the new GOP majority has proved accommodating. Republicans are moving to make good on their promise to cut $100 billion from domestic spending this year. They adopted a rules change by House Speaker John Boehner that should make it easier to block a debt-limit increase.

The national debt is the accumulation of years of deficit spending going back to the days of George Washington. The debt usually advances in times of war and retreats in peace.

Remarkably, nearly half of today’s national debt was run up in just the past six years. It soared from $7.6 trillion in January 2005 as President George W. Bush began his second term to $10.6 trillion the day Obama was inaugurated and to $14.02 trillion now. The period has seen two major wars and the deepest economic downturn since the 1930s.

With a $1.7 trillion deficit in budget year 2010 alone, and the government on track to spend $1.3 trillion more this year than it takes in, annual budget deficits are adding roughly $4 billion a day to the national debt. Put another way, the government is borrowing 41 cents for every dollar it spends.

In a letter to Congress, Geithner said the current statutory debt ceiling of $14.3 trillion, set just last year, may be reached by the end of March — and hit no later than May 16. He warned that holding it hostage to skirmishes over spending could lead the country to default on its obligations, “an event that has no precedent in American history.”

Debt-level brinkmanship doesn’t wear a party label.

Here’s what then-Sen. Barack Obama said on the Senate floor in 2006: “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance the government’s reckless fiscal policies.”

It was a blast by the freshman lawmaker against a Bush request to raise the debt limit to $8.96 trillion.

Bush won on a 52-48 party-line vote. Not a single Senate Democrat voted to raise the limit, opposition that’s now complicating White House efforts to rally bipartisan support for a higher ceiling.

Democrats have use doomsday rhetoric about a looming government shutdown and comparing the U.S. plight to financial crises in Greece and Portugal. It’s all a bit of a stretch.

“We can’t do as the Gingrich crowd did a few years ago, close the government,” said Senate Majority Leader Harry Reid, D-Nev., referring to government shutdowns in 1995 when Georgia Republican Newt Gingrich was House speaker.

But those shutdowns had nothing to do with the debt limit. They were caused by failure of Congress to appropriate funds to keep federal agencies running.

Comments

Richard Heckler 3 years, 11 months ago

"The U.S. health care system is typically characterized as a largely private-sector system, so it may come as a surprise that more than 60% of the $2 trillion annual U.S. health care bill is paid through taxes, according to a 2002 analysis published in Health Affairs by Harvard Medical School associate professors Steffie Woolhandler and David Himmelstein." http://www.healthcare-now.org/

How to reduce the cost of the federal government in a large way?

Mandate that all federal government employees including all elected officials use IMPROVED Medicare Insurance for All. Instead of using the most expensive medical insurance industry in the world. YES!

This would be having our government insure itself as many corporations and wealthy individuals do. This would be a frugal step in the right direction.

Let's encourage the President and Congress to get on with this cost cutting program.

Let's reduce health care costs by getting rid of the medical insurance industry. Why? Because the medical insurance industry does not provide health care. But they are a whopping expense. And most consumers do not spend what is paid out annually per policy.

Improved Medicare Insurance for All would provide real medical insurance reform!

The United States spends twice as much as other industrialized nations on healthcare – $8160 per capita – yet performs poorly in comparison and leaves over 46 million people without health coverage and millions more inadequately covered.

Let’s direct OUR tax dollars to fund OUR medical insurance. What’s good for elected officials is good for WE taxpayers!

Flap Doodle 3 years, 11 months ago

I've realized that merrill is actually on of the South Park underpants gnomes. His program of 1. Give everybody free healthcare 2. ? 3. Save gazillions of dollars is right out of their book.

Richard Heckler 3 years, 11 months ago

Expanded and Improved Medicare Insurance for All is one of the solutions.

  • Easy to Implement: Medicare has been in existence since 1966, it provides healthcare to those 65 and older, and satisfaction levels are high. The structure is already in place and can be easily expanded to cover everyone.

  • Simple: One entity – established by the government – would handle billing and payment at a cost significantly lower than private insurance companies. Private insurance companies spend about 31% of every healthcare dollar on administration. Medicare now spends about 3%.

  • Real Choice: An expanded and improved Medicare for All would provide personal choice of doctors and other healthcare providers. While financing would be public, providers would remain private. As with Medicare, you choose your doctor, your hospital, and other healthcare providers.

  • State and Local Tax Relief: Medicare for All would assume the costs of healthcare delivery, thus relieving the states and local governments of the cost of healthcare, including Medicaid, and as a result reduce State and local tax burdens.

  • Expanded coverage: Would cover all medically necessary healthcare services – no more rationing by private insurance companies. There would be no limits on coverage, no co-pays or deductibles, and services would include not only primary and specialized care but also prescription drugs, dental, vision, mental health services, and long-term care.

  • Everyone In, Nobody Out: Everyone would be eligible and covered. No longer would doctors ask what insurance you have before they treat you.

  • No More Overpriced Private Health Insurance: Medicare for All would eliminate the need for private health insurance companies who put profit before healthcare, unfairly limit choice, restrict who gets coverage, and force people into bankruptcy.

  • Lower Costs: Most people will pay significantly less for healthcare. Savings will be achieved in reduced administrative costs and in negotiated prices for prescription drugs.

http://www.healthcare-now.org/

jayhawklawrence 3 years, 11 months ago

We need to look at the overall cost of living and study how the average American can survive in this world.

I think there is an opportunity for Americans to be more self reliant when it comes to their energy needs. We need to study other alternatives to achieving sustainability.

It looks like the government is putting all their eggs either into wall street or entitlement programs, but these are dead ends for sure.

I think the young engineers of today can develop better solutions than what Goldman Sacs or AIG or General Motors is working on. I don't think Exxon or BP gives a rat's behind about what you and I are going to be doing 20 years from now to survive in this world.

Otherwise we are not going to make it to the next century. Politicians are focused on the short term. Other countries, such as China and Japan, are looking farther down the road.

America is about the importance of each individual citizen. We can't lose that. How we design for sustainability in regards to water, soil, food production, energy, transportation, security, etc., should be centered on the individual American and not on who has the most money.

We are not far past the time when a guy in a wagon could go out and homestead a piece of land to grow his food and survive. We cannot let big corporations and big government control our lives. We should design a future where we can live cheaper, better and longer. We should be able to do this with better technology and better research, planning and product development.

We need to have that vision so we don't lose what made us unique as Americans.

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