The Debt Ceiling: Who’s Holding Whom Hostage?

April 27, 2011 04:28

Forking over another trillion-dollar blank check to this spendthrift administration would be a huge failure.  If the debt ceiling were not raised, Obama would have to “live within his means.”  That might be very salubrious for the tanking U.S. dollar.

By Jon N. Hall at American Thinker


Moore, Krugman et al. are “debt crisis deniers.”  An effective antidote for these deniers is Harvard don Niall Ferguson.  In “Today’s Keynesians have learnt nothing” at The Financial Times, Ferguson writes:

The anti-Keynesians point out that bond market sell-offs are seldom gradual. All it takes is one piece of bad news — a credit rating downgrade, for example — to trigger a sell-off. And it is not just inflation that bond investors fear. Foreign holders of US debt — and they account for 47 per cent of the federal debt in public hands — worry about some kind of future default.

Rep. Paul Ryan (R-WI) is a leader of the second group: those who believe we do in fact have a deficit problem but think we can fix it if we start soon.

Sterner stuff comes from Sen. Rand Paul, who proposes cutting $500 billion right away.  Do that for three consecutive years and we’re close to the deficit Democrats inherited in 2007.  But Rand Paul’s plans don’t stand much of a chance of getting through the Democrat Senate and being signed by the president.

If America truly demands all this spending by the feds, then let’s pay for it now.  Let’s raise taxes to cover it all.  But to pay for our current spending with current revenue would require hiking taxes by around $1.645 trillion.  That’s the projected deficit for 2011, and it dwarfs this year’s Individual Income Tax receipts, estimated to be $956B.

Regarding how much time America has, there’s a fourth group: those who think it’s already too late.  They believe America can’t avoid disaster nor save her currency, and there’s one hugely painful adjustment coming.  If one is truly in this camp, then it’s past time to spend one’s remaining dollars stockpiling ammo, canned goods, gold, non-hybrid seeds, etc.


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