US Credit rating cut! – Tea Party Nation

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US Credit rating cut! – Tea Party Nation.

Posted by Judson Phillips on July 21, 2011 at 8:51am in Tea Party Nation Forum

America’s credit rating has been cut.  One credit rating agency has downgraded America’s credit rating.  This is the nightmare scenario the left has been screaming about. 

 And you have not heard about this?  There is a reason why you may not have heard about it.  What is that reason? 

 Because this credit downgrade does not fit the story the drive by media is pushing.

 Credit rating agency Egan Jones has downgraded America’s credit rating.  Why?  Because of our high debt load and the seeming inability of the country to reduce spending.   Egan Jones in its announcement specifically said the credit rating reduction had nothing to do with the fears the United States would not increase the debt ceiling. 

 In cutting the credit rating Egan Jones noted that America’s debt now exceeds 100% of GDP.  Canada’s debt is only about 35% of GDP. 

 Most of the credit rating agencies have placed America’s credit rating on notice based on the idea that America needs to raise its debt ceiling.   If America raises its debt ceiling, it means America will borrow more and that is what credit reporting agencies exist for.

 Egan Jones simply has this one right.  America has accumulated too much debt and has no realistic plan for cutting spending or our debt. 

 Many people are familiar with finance guru Dave Ramsey.  Ramsey has a simple formula for success.  Get out of debt.   Ramsey was speaking on the radio a while back and was discussing FICO ratings.   FICO is of course, individual credit scores.  Ramsey announced he had no idea what his FICO score was but it was probably near the bottom because he did not borrow money. 

 Debt is a nightmare.  It is a great racket for the lenders, but for the borrower it is a nightmare.  From Shakespeare came the famous words, “neither a borrower nor a lender be.”  The full quote, from Hamlet, is even more interesting:

 Neither a borrower nor a lender be; 
For loan oft loses both itself and friend, 
And borrowing dulls the edge of husbandry.

 What has borrowing done for America?  It has enslaved us with massive debt payments.  It has allowed politicians to create massive programs, which subsidize unemployment and incentivize not working.    Many of these programs have been used to bribe special interest groups to help keep liberals in the halls of power. 

 The lending of money is advantageous for the lender, not the borrower.  If you borrow $25,000 to buy a new car, by the time you pay the loan off, you have paid $50,000 for a $25,000 car.   

 There is a word for that.  Insanity.  

 The same is true for our government.   The lenders to our government do not do so out of the goodness of their hearts.  They want interest payments in exchange.   Even though those interest payments are low, we are still paying interest on a debt.    Not only are we using borrowed money for things we cannot afford, because of the interest payments, the costs of these nonessentials is inflated.   Now, we are not paying a dollar for a dollar’s worth of goods or services, we are now paying two dollars for a dollar’s worth of goods or services.

 America is at the crossroads and the current debt ceiling and budget debate will decide the future of America.  If we do not stop the spending and begin to seriously reduce our debt, America will collapse. 

 Given that Obama and his regime are hard core socialists who believe America is the greatest force for evil in the world today, they are probably engaging in this policy intentionally, to reduce America from a superpower to a second rate state.

 Real Americans love America and want to see America as the greatest country in the world.  The only way we are going to recover from this disaster and move forward is to stop the spending, stop the borrowing and to being paying the debt down. 

The choice is ours and we must let our elected officials know.   Stop the spending and borrowing now.  This is our last chance.

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GOP: Please Do Call His Bluff and Man Your Battle Stations – David Limbaugh – Townhall Conservative

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GOP: Please Do Call His Bluff and Man Your Battle Stations – David Limbaugh – Townhall Conservative.

Ordinarily, I’d have difficulty grasping the magnitude of arrogance driving President Obama in budget negotiations that could determine the survival of our nation, but after several painful years of observation, I’ve come to expect it from him.

Obama’s personality type does not well handle opposition, so when House Majority Leader Eric Cantor refused to budge on Obama’s unreasonable demand that the GOP agree to raise taxes during these economic hard times, which would not raise revenues, Obama blew up and “stormed out of the room.”

Cantor suggested that the parties opt for a short-term deal to avert the debt ceiling deadline, but Obama adamantly refused. “Enough is enough,” said Obama. “I’ve reached my limit. This may bring my presidency down, but I will not yield on this.”

Why is it acceptable for Obama to be overtly uncompromising but express outrage that his GOP opposition is unyielding? It’s as if he’s saying, “How dare you be as intransigent as I’m being.”

Obama also warned Cantor, “Don’t call my bluff.” Notice all the I’s and my’s in Obama’s threatening language. Did anyone ever tell this narcissistic man “no” before he became president?

He acts as though the United States is his personal chattel to do with as he pleases, and no one (including members of the coequal legislative branch) and nothing (including the Constitution) dare get in his way. He masquerades as a mere bystander in all this instead of the primary mover in accelerating this financial catastrophe and the primary obstructer of the reforms necessary to avert it.

Such petulance isn’t Obama’s only unbecoming conduct concerning these negotiations. He recently attempted to horrify seniors that their Social Security payments would be withheld if Republicans didn’t compromise.

Obama knows better than that. Reaching the debt ceiling wouldn’t prevent the government from spending money, only from spending more than it takes in, which means it could decide which payments to honor and which to forgo. There are plenty of expenditures less urgent than benefits to seniors. But Obama chooses to scare seniors anyway.

This same principle applies to Obama’s refusal to exercise calming presidential leadership at Wednesday’s announcement by Moody’s that the government’s credit rating is under review for a potential downgrade. Moody’s said the ongoing debt limit stalemate increases the risk of the government’s default on its debt.

But that is clearly untrue, and a president fulfilling his fiduciary duty to the nation would say so in unambiguous terms. What is true is that if we don’t radically reduce our overall spending and structurally reform our entitlement programs at some point in the near future, we will be unable to honor our obligations. But it is the exploding national debt that is the enemy, not the debt ceiling, without which there’s no telling how much worse off we’d already be.

Obama should have immediately assured Moody’s and the rest of the world that no matter what happens in these negotiations, the United States will honor its debts. But just as he does with seniors, he prefers to ruthlessly leverage international fear as a negotiating weapon in his mission to remake America.

I repeat: It is past time that Republicans take the gloves off and man their offensive battle stations. Obama’s constant assumption of the offense and the Republicans’ deferential defensive positioning create the illusion that Obama has more power than Congress and that he is not mainly culpable in the events giving rise to this impasse.

Whether or not he accepts this reality, Obama owns this economy and the alarming explosion of the debt in recent years. He is the one whose reckless policies have greatly exacerbated our dire financial condition. He is the one whose unconscionably wasteful and irresponsible economic policies have tanked the economy and suppressed employment. He is the one who, along with his party, has not presented a budget in 800 days. He is the one who formed a bipartisan deficit commission and then ignored its findings. He is the one who hasn’t presented a concrete budgetary plan. He is the one who refuses to reform entitlements despite objective evidence that if we don’t, the nation will go belly up. Yet he is the one who is pointing all the fingers of blame against the Republicans as if they were the culprits.

Republicans, choose your spokesman (Rep. Paul Ryan would be a good choice), and call daily pressers to make your case instead of always ceding that turf to Obama. In charge of the purse, you have every bit as much right to speak out on fiscal matters as does Obama. Then begin passing your reform bills over and over again, forcing the Democratic Senate and Obama to reject them. It’s time that the president and party who are “creating the mess” were put back on their heels and exposed for their wanton fiscal destruction.

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KUHNER: Obama’s Waterloo – Washington Times

KUHNER: Obama’s Waterloo – Washington Times.

Republicans have a golden opportunity to break Barack Obama’s presidency, ensuring he will be a one-termer. Mr. Obama has backed himself into a corner on the debt-limit talks; the GOP can smash his re-election prospectsif they have the will – and intelligence – to do it.

Mr. Obama has asked that the nation’s $14.3 trillion debt ceiling be raised, and he knows that cannot be done without support from House Republicans. Moreover, along with Treasury Secretary Timothy F. Geithner, Mr. Obama warns that fiscal Armageddon is coming unless the ceiling is lifted before Aug. 2 – the date Mr. Geithner claims the United States begins defaulting to its debtors.

Mr. Obama seeks a “grand bargain”: a debt-reduction package that includes $1 trillion in tax increases to accompany entitlement spending cuts, including Social Security and Medicare. He wants to go big. His target is to slash $4 trillion over 10 years. He has repeatedly vowed to veto any “small” debt-limit increase – one that allows America to keep paying its bills until a more comprehensive agreement is ratified. In other words, Mr. Obama has issued an ultimatum to congressional Republicans: Either break your 2010 campaign pledge not to raise taxes or else be blamed for the debt-limit debacle. As he put it, it’s time to “eat our peas.” The president is playing Russian roulette with the economy and our nation’s future.

Yet he has badly played his weak hand. Like the dictator Napoleon Bonaparte, who sought to spread the radical French Revolution across Europe, Mr. Obama has committed a fatal mistake: overreach. The president has issued a public ultimatum that either must be upheld or he must back down from. Either way, it is Mr. Obama’s political credibility that threatens to be shattered.

In fact, the debt-limit talks represent the culmination of a Machiavellian strategy that Mr. Obama has been pursuing since he entered the Oval Office. The president’s goal has been to erect a Franco-German welfare state. Mr. Obama is primarily responsible for America’s debt crisis. He is the one who rammed through Congress the nearly $1 trillion failed economic stimulus. He is the one who has approved successive budget deficits of $1.5 trillion. He is the one who has saddled us with Obamacare, which will cost trillions of dollars and add more than 30 million Americans to the rolls of Medicaid – already the nation’s fastest-growing entitlement program. In short, he has buried America under a mountain of debt. Hence, it is the height of hypocrisy – not to mention chutzpah – for him to be grandstanding about the need for fiscal responsibility.

However, he understands one fundamental reality: European-style spending eventually requires European-style taxation. His aim has been to pile up such high deficits and debt so he can force America to accept massive permanent tax increases. Mr. Obama is using primitive class-warfare rhetoric, insisting on soaking “the rich.” He is not serious about confronting our debt bomb; rather, he seeks to consolidate his socialist revolution, paying for the expansion of the entitlement society.

Mr. Obama is cynically seeking to position himself as a centrist, the only adult in Washington willing to tackle the country’s real problems. Hence, he claims that “everything must be on the table” and that both parties need to confront “sacred cows.” For Democrats, that includes entitlements; for Republicans, it refers to tax hikes. Yet the details emerging from the backdoor discussions tell a different story. Mr. Obama is looking for GOP political cover on huge tax increases in exchange for promises of entitlement reform. Much of the $1 trillion that Democrats have allocated purportedly to reduce domestic spending over 10 years comes from money that was supposed to fund the wars in Iraq and Afghanistan, as well as $500 billion in interest on those outlays. In other words, the supposed “spending cuts” are nothing more than smoke and mirrors – futuristic, imaginary money being shuffled from one budgetary category to another. Yet the taxes are very real. If Mr. Obama has his way, the rates on capital gains, dividends and upper-income earners will skyrocket, especially after the George W. Bush-era tax cuts expire in 2012.

The president is trying to lure House Speaker John A. Boehner into a trap. Should the Ohio Republican capitulate, this would violate the GOP’s promise to voters, enrage its base and give Mr. Obama a historic victory. Mr. Boehner, however, rightly wants nothing of it. He has definitively ruled out any tax increases. He is holding all the cards.

Mr. Boehner should insist on a small deal – lifting the debt ceiling along with corresponding spending reductions. Every debt dollar raised should be coupled with a spending dollar cut. That way, the package pays for itself. More important, it places Mr. Obama in a no-win situation. House Republicans will pass legislation that raises the debt limit. Therefore, they cannot be blamed for any economic fallout should America default. Mr. Obama can veto it, which means he will be solely responsible for the fiscal calamity. Or he can sign it – publicly standing down from his earlier threats. Thus, he will be denuded among his liberal supporters and the larger electorate, and shown to be a weak leader whose words mean nothing.

Either way, it will be his Waterloo – the effective end of his presidency. Ambition cost Napoleon his empire. For Mr. Obama, the “big package” strategy is the moment of colossal overreach. He wanted too much, too soon. Now comes the long, humiliating and fatal retreat.

Jeffrey T. Kuhner is a columnist at The Washington Times and president of the Edmund Burke Institute.

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CBO report: Debt will rise to 90% of GDP – Washington Times

CBO report: Debt will rise to 90% of GDP – Washington Times.