August 5, 2011
It’s official. Ratings agency Standard & Poor’s has downgraded their long-term credit rating for the U.S., noting in their report the following reasons:
… we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.
Hard to argue with. Even the party dubbed as deficit hawks, Republicans, have voiced skittishness over the possibility of defense spending cuts should the plan potentially emanating from the so-called “super” committee not pass.
The sad reality is that very few politicians are willing to make the cuts that are necessary to correct our ever-increasing path toward staggering debt (not that we aren’t already there). And if they’re not willing to make those cuts, the only other option is to “increase revenues,” which is code for raising taxes – something that is even less politically palatable. Yet even raising taxes on the “rich” isn’t enough to put the government in the black.
It’s easy to point the finger at our politicians. But they are just doing what they think will get them reelected, which means in most cases avoiding making tough decisions that might offend their constituents. Truth be told, it’s the electorate that is to blame for our mounting debt and near refusal to seriously deal with it (note: part of the S&P reasoning was that the amounts agreed on in the recent debt-ceiling deal are not anywhere near enough to tackle our long-term debt problems). As long as we the voters are unwilling to give up our particular piece(s) of the pie the government spending-machine cooks up, we will continue to face mounting debt and further credit worries.
“But what about cutting waste, fraud and abuse?” you might ask. One man’s “waste” is another man’s “investment.” One man’s “fraud” is another man’s “tax credit.” And one man’s “abuse” is another man’s “grant” or “entitlement” or whatever other euphemism he may choose at any given moment to justify his looting of other people’s money.
We are all part of the problem. The sooner we realize that the better.
November 11, 2010
More outcries from the ‘entitled’ in Europe:
This time it is students lamenting the fact that they may have to actually pay for more of their own college tuition instead of relying on the government for support. The horror!
November 7, 2010
With the House of Representatives soon to be under Republican control, the government will be divided. The two parties, divergent as they are on ideological grounds, will likely not compromise on much. Such leads to a situation often derided as “gridlock.”
Those on the left, right and in the middle opposed to such gridlock say it is not good for our country. They argue that it means nothing will get done. But given the amount of things done over the years that have added to our massive debt, there may be something to be said for government not doing anything.
Republicans may argue that this gridlock is not acceptable. Their argument is that they must gain the Senate and the presidency in 2012. Then, they can go through with their agenda. It’s an agenda they claim, as they have done before with no significant results, will mean an end to wasteful government spending and a reduction in both the size of our government and its debt. But many of those same Republicans, when asked over the last week since the elections, have been hard pressed to spell out what they specifically would cut to make a significant dent in the debt. All too often they have resorted to the old “cut discretionary spending” mantra. The problem with that is, discretionary spending only makes up a small portion of overall federal spending.
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