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
“Ryan helped push the best deal we could get and kept us alive to fight another day.”
Hey imbecil; this deal is one of the reasons our credit score was lowered! It did nothing to fix the problem! Good grief...you and Laura Ingraham cannot be this stupid!
Great, thanks for the post!
Indeed. Time is of the essence.
As much as I admire Reagan, you have to admit all we’ve done for the 100 years is compromise with progressives, statists, leftists, marxists, social democrats — you name it. And look where we are today. Frankly, compromise has totally failed us. They have gotten everything they want right up the the demise of America. One more “compromise” and the whole nation is lost.
Not analogous; the parent and child are one in this country.
Yes, if not now but if not now it won’t matter. Without reverting to panic... if we don’t get this mess changed now it will not recover in most of our lifetimes.
The link to Ryan’s oped is here: http://online.wsj.com/article/SB10001424052748703806304576242612172357504.html
Pretty words but too many and too complex for the mouth breathing masses to understand. Heck, they will never see or hear this. They don’t read the WSJ and they sure don’t read the oped page of that, what is becoming just another rag. The message has got to go out to the masses in a way they can understand and it has to go out bluntly. We are broke and unless you want to eat the cow that provides the milk we have got to stop spending and take care of the cow.
Most mouth-breathers wouldn’t understand that because they have never seen a cow and think the milk comes from the grocery store and Uncle Sugar.
Ryan is beating a dead horse if he thinks that the takers can be encouraged to become producers by training them. What will convince them to work is an empty feeling in their bellies, a cold night or a very hot day in their apartments. They don’t want to work people! They make more by not working and have gotten used to it and they LIKE IT!!!!
What Mr. Ryan and other political hacks keep missing is that we MUST eliminate BASELINE BUDGETING. It encourages waste. (for definition see here: http://en.wikipedia.org/wiki/Baseline_%28budgeting%29). Carter tried to implement Zero Base Budgeting but like most of what he did it was a cluster fluck. Baseline Budgets are sinister and allow political hacks to argue over how they are going to spend the automatic increases to what they have already wasted and will continue to waste. Google this discussion, Taxpayer’s Against Govt. Waste get it.
If Mr. Ryan and his gang of hacks are serious and unafraid of losing their fat cat contributors they should clearly state that many corporations, BIG ONES, pay essentially NO TAX AT ALL. They don’t pay the 35% highest corporate tax rate in the world at all. Lower the corporate tax rate to 25% and make it payable on all C corporations. Hell, S corporations pay it already. Share the sacrifice. Be honest about it. On the other hand, encouraging reinvestment so the stockholder doesn’t pay double taxes on both profits, dividends and capital gains is a pretty good idea. The whole thing is screwed up... Ryan is right, can the tax code but then again, starting over opens the door for lots of politics and handouts and graft and corruption.
Nobody likes it but repeal the Bush tax cuts. Yes, that is what I said. Give the masses what they want. Return of the Bush tax cuts will raise taxes on those who pay almost no tax at all by a larger percentage increase than they do on the “wealthy”. If that is what the lefties want to promote, that it taxes the “wealthy” “fairly” let ‘er rip so long as the return to pre-Bush is uniformly applied.
Medicare is a sticky mess. It is a blank check for extension of life when death is inevitable. My father died over the course of 5 days. I never saw a bill. Poppa was going to die anyway. We spent a lot of taxpayer money, enriched the hospital to subsidize others and provided some good fees to a large group of doctors... all to let Pop suffer and think longer about he inevitable. He would have been better off at home on the farm with his last sight across the valley and the fields and of his family.
Limit Medicare lifetime expenses. Let persons decide how they want to use them. Subsidize the premiums for private health care premiums as a transition and let Medicare disappear. Deep six Medicade at the same time... another blank check spending disaster facilitated by the taking class.
As for health care reform, it is another cluster fluck, go back to the drawing board but first repeal oblabla care. Fix the real problems with health care, too much cost, no portability, selective purchasing by consumers with no risk management allowed, no transportability across state lines.
Making work pay didn’t work out. Maybe making hunger motivate would. Maybe we could help people but also make them understand that a $10 an hour job doesn’t look too bad at all.
FAT CHANCE. NONE OF THIS WILL EVER HAPPEN. WE ARE HEADED FOR THE WASTE BASKET OF HISTORY and I am wasting my time here today. We all are aren’t we?
No thanks. For all his budget cutting talk, Ryan appears to be a business as usual kick the can down the road RINO. These guys are not grasping the anger of we the people. We want action against the spending and we want it now!! Not empty promises. These guys failed in their fiduciary duty to HOLD THE LINE!!
Trillions! TRILLIONS!! This is unmitigated mind-boggling bullshit!!
And the idiotic Super Congress diluting our tea party representation is nothing less than treason!! Tyranny!! Stupidity!!
Taxation without representation!!
McConnell, Boehner, Ryan, et al, should be tossed out on their backstabbing backsides!!
They joined the treasonous democrats in plunging us trillions of dollars deeper into bankrupting debt when all they had to do was vote no and HOLD THE LINE!!
Ryan for president? That’s a freaking JOKE!! He can KMA!!
Rebellion is brewing!!
DON’T TREAD ON ME!!
Our government was designed such that the House, Senate President or Court could check the actions of the other. We don’t have a parliament after all.
When you're in a minority position, as we are on the Hill, you take the best deal you can get to minimize the damage to the country (unquestionably our first priority), and try to avoid being politically eviscerated, which is what would have happened to us if we didnt compromise at this juncture. The result of holding the line would have been either a partial government shutdown or a default, and as weve seen, the market has already made a large correction and weve been downgraded on our credit both occurrences which would have happened in any event, but would have provided irresistible political fodder for our opponents. We already fought the shutdown fight with Clinton and lost. The Obama economy is a nightmare, and this shutdown would have allowed him to blame his continued poor performance on the alleged uncertainty wrought by the intransigence of the GOP. Rather than allow Obama to shoot himself in the foot, you would have placed the economic millstone around our necks and doomed our chances in 2012, for nothing. Had there been a partial shutdown, Republicans would have been blamed for every negative ramification - from delayed Social Security checks and Medicare reimbursements to closed national parks to endangering our troops and mistreating our veterans. It would have been a nightmare for us, and the result would have dramatically increased the likelihood of a a return of Obama in 2013 with a strengthened hand. Moreover, since the real budget issue is entitlement reform, and there is ABSOLUTELY NO hope of passing major entitlement reform while this president is in office, and the Dems control the Senate, its purely destructive there is no benefit to this kamikaze approach.
2012 is perhaps the last big chance to fundamentally reverse what Obama and generations of liberal policies have wrought, generic Republicans are out-polling him; we were wise not to sacrifice the enormous opportunity to do good then, with what would have been a largely symbolic, and ultimately destructive one now.
I think one of the reasons is the S & P. The politicians knew this was coming, and I think they HOPED that it would delay the downgrade. Ed Morissey made this point...that Republicans would have been blamed for the downgrade (which would have happened on Wed) if nothing had been done. As it is now, my hope is that the debate on REAL spending cuts can begin because ultimately S & P have said it’s all about the debt and entitlements...and tax increases won’t make a dent in that. I DO believe that the if Cut, Cap and Balance had passed, we wouldn’t have been downgraded...and that’s something that the republicans should NOW try to get off the table and passed in the Senate.
He gets it. “One of those provisions is to fix this baseline joke. I mean, the baseline. So Louie is completely right about baseline. We’re going to be doing budget process reforms, line item veto, more spending caps, [INAUDIBLE] budgeting, and fixing this baseline issue.” - Paul Ryan on Hannity
When? It had better be soon. How? Not with this Spinate and presentdent.
Like I said at other times. I think that we are well and truly screwed until obla is out of the picture, most of the rinos are gone and the spinate is in the hands of the tea party.
IF that happens, and I think it is a very very long shot. A response to necessary change will be bloodshed.
We are well and truly screwed.
How can anyone in his right mind hope that adding trillions more to the already nation crushing debt would enhance our credit rating? Sheer lunacy.
Needs to be tattooed to their foreheads:
IT’S THE SPENDING, STUPID!!
And the Republicans are already being blamed. So friggin what? They’re going to get blamed anyway, no matter what!
They had a chance to HOLD THE LINE!! They punted. Worse, they surrendered our tea party power in the House!!
RINOS are going to PAY for their cowardly treason!!
Rebellion is brewing!!
Our time for change is November 2012.
Ryan talks big, but when he had the opportunity to stick it to the big spenders, he dropped the ball. He punted!! All mouth, no balls!!
Maybe but will it be too late and it is no sure thing. That battle is certainly not a dead fall proposition. In fact, I have my doubts.
Nothing looks good to me now.
You are right, of course. But we are all sick of the non-stop ratchet toward totalitarianism that has been going on for 100 years. I hope 2012 is the watershed we think it may be. If it isn’t and the Tea Party faction doesn’t gain the upper hand, we are finished. We have reached the last tooth on the ratchet.
Every time some Republican happens to get good press because they are close to being right, we see people flock to propose them for president.
Have we learned nothing from Brown, Cristi, Spector, or for that matter GW?
We need someone that does not go along in order to keep their power. Personally I would have had more respect if he resigned before voting for the Cr@p sandwich he voted for. I read the reports of Boehner threatening his collegues with all sorts of evil, so why did they not go public with this stuff and overturn Boehner’s power. Logical reason of course, it is their tun next to move up, it is an inherited power structure, just like Royalty of old.
April 14, 2011, The Hill: "White House officials maintained Friday that the administration wants to see a "clean" increase to the federal debt limit "
How would S&P, Moodys, et al. have reacted if Obama got his "clean" increase?
Aug 4, 2006, WA Post editorial criticizes Pelosi for refusing to work on entitlement reform
Oct 6, 2006, AP reports on Pelosi's plans if she becomes speaker among them "Pay as you go," meaning no increasing the deficit, whether the issue is middle class tax relief, health care or some other priority..."
How's that compare to her record as Speaker?
The Commie model three steps forward and one step back, it is not possible to fix that with half measures. We have compromised ourselves into a Marxist dream team.
Maybe if you learned to stop addressing your intellectual opponents with “hey imbecile,” your arguments would get more respect.
Republicans are going to be blamed no matter what happens. That is not a measure of what they should do.
They’ve had several chances to cut spending. They’ve decided not to. The CR, the Debt limit increase, the individual appropriations bills (yeah, I follow those), etc. etc. What you are talking about may be true or not true. You don’t know. I don’t think it is but I can’t prove you wrong. What you can know is that in every instance since November when the Republicans could have cut spending, they decided not to.
At some point the excuses need to stop. The easiest way to stop excuse making is to just say, “You are responsible for what you do and no one else.” Republicans are responsible for voting for more spending.
Truth. Ryan’s budget plan put off balancing the budget so far in the future that a child born today could be done with their PhD in economics before reelecting a congress that actually voted for a balanced budget.