Congressman Gohmert blasts the budget deal and 'emergency spending'

[sandorski]

Well, genius, you better get started on your time machine.

For the rest of us who prefer to live within the confines of reality...

Reality? Really?

 

[sandorski]

there's no political will for cuts when the economy is doing well.

That much is true.

 

[Fern]

Is it worth considering that this whole "crisis" is being a little overly dramatized? After decades of deficit spending, we suddenly decide that deficit spending is literally going to destroy America, right away. I think it's a problem we should solve, but it kind of feels like people are getting way too worked up about it.

Personally, I feel we're a little late with this realization.

But why now? Well. for one thing the threat of a credit down-grade by credit rating agencies grabs peoples' attention. I think this is to be expected, people are trained to be concerned about their credit rating, so I see it as natural they're concerned about the USA's credit rating.

I think the rapid increase in sheer size of the debt is also attention getting. Yeah, we're used to the country running a deficit. Most Americans carry some debt on their credit cards; it's normal. But it can get so high it's cause for alarm in our personal lives; like when you can't make your monthly minimum payment or reach your credit limit; that's panic inducing. I suspect many feel this is where we are about to be as a country.

I have heard Barney Frank was on TV talking about a credit downgrade and said if/when it happens many will no longer be able to lend us money. I believe he was referring to various bond funds and similar investment vehicles that have internal rules preventing them from purchasing bonds with less than a AAA rating.

There's plenty of news out there about this situation. Here's an example. Many of these type articles carry reports by economists that a debt-to-GDP ratio of 90% or worse has a negative LT effect on an economy. We passes that ratio last year, and it's getting worse, much worse and faster too.

http://www.bloomberg.com/news/2010-...-to-overtake-weigh-down-gdp-chart-of-day.html

Then there's Greece, a real world example of 'crash & burn' unfolding right before our eyes.

Now add in our economy, which seems to be going no where fast. Employment sucks and homes values aren't really improving, neither are expected to improve substantially any time soon either.

So, I'm not surprised in the least by the growing concern. This hasn't happened overnight either. In 2006 Pelosi and the Democrats made this a BIG campaign issue. By around 2008, the end of GWB's term we saw the TEA Party forming. Then the big stimulus that, by most peoples' account, got nowhere. Etc.

If you aren't awake to this now, chances are you never will be.

But I think most importantly, a look at the numbers shows we're well past 'a little tweek here or there' to fix this. We're already at some hard choices that will changes lives for the worse at some level. To make matter worse, it looks like Congress still wants to just 'kick the can the road' and avoid those hard choices for now. Making those choices later just means they will be all the harder.

I'm not sure the big picture is over dramatized. I kinda lean toward the view that full realization of our situation has not yet occurred. Too many think we can still keep borrowing and 'somehow' we'll get out of this as we have in the past. I may be wrong, but I no longer think that's possible.

Fern

 

[werepossum]

I don't know, I'm not sure the line in the sand approach is the best way to handle it. The problem came about due to long term, cumulative deficit spending that was never checked. I'm not sure trying to reverse our spending history all at once isn't going to have just as much of a negative impact than not doing anything at all.

A dedication to many smaller steps over time, slowing and then reversing the rate of deficit growth seems reasonable to me. The problem is that there's much less incentive to do that, since I think both sides are just all about the next election.

Considering that not doing anything at all rapidly makes us Greece without an EU to bail us out, no series of cuts can be worse. Another stimulus plan, adding more to our debt even more quickly and thereby making the situation even worse, is about the only way to make things worse. I suppose though it's arguable whether honest austerity now, with all the pain that entails, is worse than these make-believe cuts and miniscule cuts in spending growth, but only because if the economy really came roaring back, we could solve some of our problem just by growing more slowly. It would have to be real wealth-producing growth though, not merely a boom in moving money from one pocket to the other.