Skip to comments.Rep. Ryan’s warning
Posted on 08/07/2011 12:14:05 PM PDT by americanophile
Standard & Poors downgrade of the nations credit rating gives House Budget Committee Chairman Paul Ryan every right to say I told you so.
Even earlier this week when President Obama was taking his victory lap for the debt-ceiling compromise, Ryan was disclosing the cold, hard truths of the economic troubles that lie ahead truths that a jittery Wall Street has been more than aware of.
In an oped column in Wednesdays Wall Street Journal, the Wisconsin Republican reiterated, of course, that the president really has no budget plan.
The presidents February budget, he wrote, deliberately dodged the tough choices necessary to confront the threat of runaway federal spending. It was rejected unanimously in a Senate controlled by his own party.
Well, so much for that auspicious beginning.
The president knew then and knows now that his health care and welfare state agenda demand new and higher taxes, that the costs of Medicare and Medicaid will continue to rise at unsustainable levels and that he has no plan for dealing with that.
In fact, when presented with options by his own debt commission appointees, Obama continued to be in denial.
Not so, Ryan. And he has a lot of help in the truth-telling department from the Congressional Budget Office, whose numbers he cites in the Journal oped.
(Excerpt) Read more at bostonherald.com ...
Paul Ryan Ping List!
Rep. Ryan would be my top choice for POTUS
Sorry, but this guy was out their pushing the Boehner plan knowing it was a joke. Hard to take you serious Paul. We’re looking for “Conservative’s” who stick to their principles, not the Leadership Platform.
I’m completely disappointed in what Ryan did pushing to give the Kenyan 2.4 Trillion with No strings attached.
Committee heads are obligated to support thier leadership. I don’t like I any better than you, but it is what it is. Notice he had this opinion piece in the WSJ not 24 hours after the deal was signed.
It was much easier to admire Mr. Ryan before he voted for that debt deal.
It’s like when your favorite actor appears in a real stink-bomb of a movie. You just want to say: Couldn’t you tell how putrid that film was going to be when you read the script??
Then why did he push and vote for a bad deal that plunged our nation TRILLIONS of dollars deeper into debt?
Muli-TRILLIONS!! What were they thinking!!
HOLD THE LINE, DAMN IT!!
If not now, when?
The Wisdom of Calvin Coolidge
“Committee heads are obligated to support thier leadership.”
Funny, I thought it was to their constituents. Sorry, but this just makes him look duplistic because it contradicts his very own Ryan Plan. Sorry, our country is in Dire Straits...his first obligation was to the country.
"When I began entering into the give and take of legislative bargaining in Sacramento, a lot of the most radical conservatives who had supported me during the election didn't like it. "Compromise" was a dirty word to them and they wouldn't face the fact that we couldn't get all of what we wanted today. They wanted all or nothing and they wanted it all at once. If you don't get it all, some said, don't take anything. I'd learned while negotiating union contracts that you seldom got everything you asked for. And I agreed with FDR, who said in 1933: 'I have no expectations of making a hit every time I come to bat. What I seek is the highest possible batting average.' If you got seventy-five or eighty percent of what you were asking for, I say, you take it and fight for the rest later, and that's what I told these radical conservatives who never got used to it." - Ronald Reagan, An American Life
Me as well.
Be smart. You can’t get meaningful chance with 1/3 of the government.
The downgrading of our debt was not a sudden cataclysm, but the result of a pattern of behavior over an extended periond of time.
Up to WW II any creditable currency was pegged to a gold/silver standard, which would have included the money of Washingtons time as President. During the Revolution the Continental Congress tried printing paper currency not backed by real assets to pay for the war, and hence the term not worth a Continental. Then during the Civil War, both the Union and Confederacy issued paper currency unsupported by real assets. Depending on Union fortunes, the paper traded as low as 40% in relation to gold coins. By 1864 Confederate currency had a gold value of five cents on the dollar. The U.S. didn’t try anything like that again until FDR confiscated gold coins during the Depression, but silver coins were still minted and still freely circulated.
While WWII destroyed most economies of the world, the United States prospered. The only way to restart international economic activity was for the U.S. to take the lead, which it did with the Bretton Woods Agreement. Every currency had a fixed value in relation to the dollar, and the U.S. kept everything functioning by buying and selling gold at $35 an ounce. Therefore, once again there was a U.S. gold standard and the dollar became the worlds reserve currency. However, Americans could not take their Federal Reserve Notes to a Fed bank and trade them for gold.
The U.S. unilaterally abrogated the agreement in August 1971, allowed the dollar to float in relation to the trading whims involving all paper currencies. Until about 1968 people could still trade their Federal Reserve notes for Silver Certificates and trade those for packets of silver from a Federal Reserve Bank. When the government renounced that option, silver coins quickly disappeared from circulation. At this time the working careers of a single generation comprise the totality of comprehension for how the international community was to function economically without currencies emerging from things people can touch and see.
The problem at the present moment is that the dollar is backed by the full faith and credit of the government. When much of the world looses faith in the U.S. as a reliable engine driving the world economy because of its incredible behavior, then the dollars status as a reserve currency is jeopardized. The memory of the United States as The Arsenal of Democracy fades to be replaced by the realization of the United States as A Gulag of Dependency.
At the margin, the country expects the rest of the world to buy our long term bonds issued in ever increasing amounts to finance current government expenditures dedicated over 60% to social welfare programs and interest. The world also perceives the awful specter of media, politician, and academician feeble dithering before the looming catastrophe of $61.6 trillion of unfunded social welfare obligations. Without any real assets backing the dollar, people are decidedly troubled by this countrys behavior and can decide the dollar is not worth a Continental. Such contemplation is already widespread, because through Quantitative Easing (QE) programs the Federal Reserve already had to buy $100s of billions of bonds the world would not purchase.
However typical of all central bankers, Ben Bernanke believes he can overcome these international fears by applying his intellect to macro-economic models providing dubious information to achieve precisely timed money supply changes, which allow timely adjustments for identification and reaction to increases in money velocity. Supposedly he would sell bonds and reduce the money supply with a precision that prevents inflation from taking hold or a recession from occurring. He would proceed in such a manner as to concurrently allay any fears of a Congress and an Administration in an election year. This result has probably not been achieved since the seven years of plenty and famine in Egypt when Joseph obeyed the word of God from his dreams.
To carry the Jewish/Christian analogy further compare the character of God to the enormity of the hubris committed by the Federal Reserve and the Treasury Department as they style themselves after the Creature. The new money is not printed, but spoken into existence in exactly the same manner as God created the heavens and the earth in Genesis.
However unlike Gods creation, money has no substance at any time. In spite of that people do exchange items of real value such as labor, cars, and food for words spoken over a phone by a twenty something Fed bond trader. This person calls a company such as Goldman Sachs that has an inventory of securities brokered for the Treasury Department, and pays lets say $1 billion for securities. Until the trader speaks $1billion, the money to pay for the notes or bonds does not exist. Anyone else purchasing the bonds does so with dollars already in circulation.
One analogy to explain the looming inflation might be to consider a flood control dam. The water that builds up behind it during the winter and spring could be considered QE1, QE2, QE3, etc. The face of the dam would be the current moribund economic activity indicating a very low velocity of money as exampled by such questions as Why do I want to borrow if no one wants to buy? or Why do I want to buy when I dont have a job? Now stagflation happens when the reservoir gets so full with QEs that some water just has to go over the top, even though economic activity remains anemic.
But when the economy picks up money begins to actively circulate. Now the increased velocity of money exponentially multiplies the QEs, and the increased pressure shatters the face of the dam. Just as a wall of water scours out the stream bed and washes all before it, inflation now rages through the economy and destroys peoples financial asset values and their purchasing power.
Now all this seems fairly insane, until you realize that every member of the G-20 behaves in much the same way, and do understand their precarious situation. The national debt now exceeds GDP joining that of Iceland and Ireland. By 2037 the CBO reports national debt will become 200% of GDP to reach that of Japan. Since all currencies have about this same connection to reality, finding one or several of sufficient magnitude and viability to replace the dollar as a worldwide medium of exchange and store of value becomes perplexing. An individual country might think they have a solution, but they know they must also survive during the resulting chaos as all countries seek similar solutions. They see the daunting specter of disaffected holders sending trillions of dollar denominated bonds to the marketplace when there are no buyers unless prices are severely discounted. They are also frightened by the image of a devastated U.S. economy, because feeding the insatiable desires of U.S. consumers has been a mainstay of their prosperity. I imagine something like the final scene in The Good The Bad and The Ugly. The members of the G-20 are standing in a circle with open graves behind them. They are all contemplating how they are going to successfully outdraw the other nineteen members and survive the resulting mayhem, which Lee Van Cleefs character did not.
The Good, The Bad and the Ugly: http://www.youtube.com/watch?v=sXldafIl5DQ
Tax Rate to Balance Budget: http://www.taxfoundation.org/research/show/25985.html
Fy2010 Spending by Category/Department: http://en.wikipedia.org/wiki/File:Fy2010_spending_by_category.jpg
FY2010 Spending by Function: http://en.wikipedia.org/wiki/United_States_federal_budget
Policy Basics: Where Do Our Federal Tax Dollars Go? http://www.cbpp.org/cms/index.cfm?fa=view&id=1258
U.S. Funding for Future Promises Lags by Trillions http://www.usatoday.com/news/washington/2011-06-06-us-owes-62-trillion-in-debt_n.htm
What if the Treasury Defaults: http://online.wsj.com/article/SB10001424052748703864204576317612323790964.html?mod=WSJ_Opinion_LEADTop
CBO outlook on long-term debt worsens: http://thehill.com/blogs/on-the-money/budget/167781-cbo-outlook-on-long-term-debt-worsens
U.S. Debt Clock: http://usdebtclock.org/
Understanding the Budget Control Act: http://keithhennessey.com/2011/08/01/bca-understanding/
Ryan stands about #4 in the House leadership. He’s feeling his way. Even in the House, there is Cohen to consider. Cohen wants to be Speaker. I don’t know what Ryan wants. He might have run for the Senate in 2012 if the way had been clear. As for Governor, Scott Walker is there. He is young but not charismatic like Rubio. If I were any of the people now running for the nomination, I would pick him as VP.
I can understand his pessimism, but I don’t agree. There is simply no alternative to the U.S. dollar, and until there is, we’ll retain our ‘super power’ status...for whatever that’s worth.
“Be smart. You cant get meaningful chance with 1/3 of the government.”
Thank you for indentifying yourself as a troll!
Good grief, you sound like Laura Ingraham, John Boehner, Mitch McConnell all rolled up into one idiot.
So tell us, they had more votes with CCB than they did this Boehner POS. Wouldn’t it have been more prudent to push somehting that had more votes, and WOULD’VE SOLVED OUR DEBT PROBLEM PERMANENTLY?
People like you are why there’s a TEA PARTY, and why this country is in the shape it’s in. Libs must salivate knowing they have “fighters” like you out there.
Sounds reasonable. My guess is that if he went for pres, the MSM would label him as “inexperienced”. Not that it mattered when O was running.
No one is taking the dollars
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