Some straight talking about the economic situation

A quick warning before anyone watches this video. The language is definitely a little offensive but I think he gets the point across. Don't know what this guy really believes in but I can second the frustration... What is so hard about not spending more than we take in?? And no, the solution is not to just take in more because that ends at some point.

Credit Downgrade... Is anyone concerned!?!?

I can't believe our leadership in this country. Yes this means Democrats AND Republicans. With the exception of a small segment of the Republican party (yes the Tea Party) everyone is in denial. On Friday evening our debt was downgraded for the first time in the history of the country and all I have heard is it's the Repulican's fault, it's the Democrats fault and on and on... Now I just received a CNN Breaking News alert that says the following:

President Barack Obama presented a reassuring assessment of the U.S. economic situation Monday, calling the country's problems "imminently solvable."

Obama spoke as the Dow continued its day-long slide, falling below 11,000 at one point for the first time since November.

"No matter what some agency may say, we've always been and always will be a triple-A country," Obama said.

Investors are reacting to Friday's downgrade of the U.S. credit rating from AAA to AA+ by Standard & Poor's. S&P on Monday downgraded mortgage lenders Freddie Mac and Fannie Mae.

When do you think they are going to wake up and say "maybe spending more won't solve all of our problems?" By saying "No matter what some agency may say, we've always been and always will be a triple-A country" we are clearly in denial. If they, and we as a general public, don't wake up soon this will only be the start of our troubles! We can't continually spend and not expect their to be a negative impact.

One other thing... How can people actually blame the Tea Party for this? The only reason they held off on downgrading the credit rating for as long as they did was because there was hope that the Tea Party would be able to push Washington to make substantial cuts. In the end all that we end up with a symbolic cuts that will do nothing and S&P finally called it out. It is time for change...

Debt Ceiling Raise Good or Bad? - Part 2

There it is, the debt ceiling deal is official passing both the Senate and the House and I have lost some respect for a number of people who I thought I backed. The first of those is Paul Ryan and the second is Reid Ribble.

Two that I can throw my complete support behind are Rand Paul and Wisconsin's very own Ron Johnson. You can see Rand's open letter below:

http://paul.senate.gov/?p=press_release&id=280

Overall I am disappointed and fear this was a big mistake by our federal government. This has done nothing to shore up our debt situation, the United States was at zero risk of defaulting (you don't think we would have just printed the money??) and our credit will be downgraded anyway! Nothing accomplished except allowing the government to continue spending at an unprecedented rate.

Debt Ceiling Raise Good or Bad?

Should I be happy that congress may have reached an agreement on raising the debt ceiling?

The case for Yes:

• The Tea Party stood their ground and was successfully able to get the talk of "increased revenue" (aka tax increases) off the board.
• US will not default on loans which would send our economy into a tailspin.
• There will be spending cuts equal to the amount the debt ceiling is raised.
• Our credit rating may not be downgraded.

The case for No:

• We have just allowed even more spending to happen and not improved our debt position in anyway.
• Congress has essentially kicked the can beyond the end of their terms and no action (besides spending) will happen before then.
• There is still a very good chance our debt rating will be decreased.

It is my belief, and many others, that a downgrade in our credit rating would have a disastrous effect on our economy. So what would cause a downgrade in our credit? Sure a default would certainly cause it. I don't think there is any question there. I also feel that a lack of a real solution to lower our total debt would also cause a downgrade. Our credit rating is determined by our ability to repay our creditors and they are not stupid. It couldn't be more clear that we have a serious debt problem with no proposal to fix it. Kicking the can further down the road and allowing us to borrow more is not a solution!

So do I support the agreement that has been made. Absolutely not... Do I support doing nothing at all? Of course not. It is my belief that what is required is a much smaller debt ceiling increase, an IMMEDIATE decrease in spending, and a balanced budget amendment going forward. I also have no problem letting this happen well past August 2nd with the passage of a bill that prioritizes what we WILL pay first. The first of those is the interest on our debt followed by liabilities such as social security, military wages, medicare, etc... The bill would require each and every expense to be prioritized with the "saving turtles in CA fund" and similar being at the bottom.

Finally, the ever popular question, why can't we just "enhance our revenue"? First, studies show that increasing taxes on the rich does not generate additional revenues. The richest Americans will simply invest their money elsewhere. When they invest elsewhere they move the jobs from the US to other countries. When jobs get moved elsewhere unemployment increases and thus the base of tax payers is further depleted while the base of those who receive benefits increases. That is why tax increases are not reasonable...

This issue is one that I have gone back and forth on. On one hand I know that the 2012 elections are going to be critical to the future of the this country. If CONSERVATIVE republicans hold out and there is a credit downgrade they would be blamed. If conservatives come to an agreement and the debt it downgraded they will also be blamed. We have already seen the media saying the tea party is responsible for the agreement and that couldn't be further from the truth. If you look at the members of congress that are supporting it, the TRUE tea party members are holding strong. I believe that if they continue to stand their ground and be honest with the public, that is the best outcome they can have at this point. Because our debt it likely to be downgraded regardless of what happens at this point, the best fiscal and political move is to stand their ground and have faith that Americans will see through the blame game and support them in the 2012 elections.