Skip to comments.The Debt Deal's Three Biggest Winners and Losers
Posted on 08/02/2011 11:11:19 AM PDT by JohnRLott
With a debt ceiling agreement finally in place and the Senate on track to approve it today congratulations are being handed out all around. Armageddon and catastrophe has supposedly been averted. And politicians are rushing to put the best face on the deal.
Unfortunately, the new agreement does not accomplish as much as many had hoped, or as much as it should have, in terms of curbing spending and continued deficits. This explains why stock markets continued to fall despite the supposedly "good" news. The reason is because, once again, politicians are continuing to push the problem to the future.
Here's a look at the winners and losers in the aftermath of the "catastrophe" that's just been averted:
1. Stimulus Recipients and Big Government: President Obamas Stimulus was supposed to just be temporary. Alas, the debt agreement locks in big government and the extra spending President Obama initiated will continue. . . .
(Excerpt) Read more at foxnews.com ...
Bullshit! Both are now assured and the dates of both have been moved up exponentamently.
And why should we believe this guy???
No, I’m kidding. If you’re THE John Lott, I love your work. As a former liberal Democrat turned “right wing fanatic,” your economic analyses of gun control helped me embrace the second amendment. (I always supported the second amendment, but formerly merely out of a sense that it was constitutional law, not actually a *good* thing.)
He NOW has a bottomless pit of money to fund his reelection.
What’s to say any new debt bill would be adhered to any way?
Congressional Budget and Impoundment Control Act of 1974
Balanced Budget and Emergency Deficit Control Act of 1985
Budget Enforcement Act of 1990
Balanced Budget Act of 1997.
“Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999”
Restoring Fiscal Discipline Act of 2007
Yep, just one more bill ought to do it.
The American people and our once great nation, the USA. Piss on the Repukes like Boner & McConnell & establishment elitist Repukes who sold & betrayed the election of 2010 and the people who voted for these bastards. They have just handed a $2.4 TRILLION gift to the RAT bastard commie pic 0dumb0 and ensured his election in 2012. Plus they have killed any likelihood of retaining the House or recapturing the Senate. Boner, McConnell, Cantor, et al, should be thrown out of office & tried for treason. They just divided & destroyed the Republican party in one swoop, which at least GW Bush took 8 years to destroy the Repub party. Thanks RINO & CINO bastards!
Times a million millions.
You forgot the Gramm-RudmanHollings Act. This act, was passed on December 11, 1985. It set a series of targets for eliminating the federal budget deficit by October 1, 1990. If Congress and the president failed to agree on voluntary spending reductions, the law called for automatic cuts of the necessary percentage from each item in the budget. One-half of the cuts were to come from domestic spending and one-half from defense spending.
Now for the good part
On July 7, 1986, the Supreme Court struck down the automatic-cut provision, on the ground that the act improperly delegated authority to the controller-general, an agent of Congress designated to implement the cuts.
Congress restored the automatic cuts in 1987, avoiding constitutional problems by assigning the power to make the cuts to the president and the director of the Office of Management and Budget.
I hope they did it correct this time.
Progress is in made in increments. We don’t yet have the votes to achieve what we want and it’s foolish to believe we could have got any better deal than what we did. In order to really change things, we must win in 2012.
i’m far from an expert, but Rush, Mark Levin, Club for Growth, Heritage Foundation, Jim DeMint, and many others, say you are wrong.
doing NOTHING, would have been better, than giving Obama another 2 TRILLION to spend.
instead of forcing HIM to cut freebies to HIS base,
all this did was dishearted the people who literally sent money they couldn’t afford, to send Tea Party candidates like Alan West to DC, who then betrayed them.
and funny, but the Democrats seem to do VERY well, with 1/3.
and look at the spending increase they got in 2007, when the GOP still had the WH.
and if we DO win, in 2013 there will be a 17 TRILLION debt, downgraded AAA rating, double digit unemployment and inflation.
Holding the line NOW, for REAL spending cuts, like the Coburn plan (9 trillion in REAL cuts) would have SAVED the economy, and sparked a REAL recovery!
Obama has increased spending by 40%. and we cut it back by 2%.
wow. great victory.
cutting an increase, is NOT a decrease.
and this bill passes the 2012 and 2013 budgets by “deeming”,
and has BUILT IN increases of 5%, and allow the Bush tax cuts to expire.
wow. great victory.
another such victory, and the war will be lost...
thanks! I will add it to the list of BS worthless bills.
Balanced Budget and Emergency Deficit Control Act” and “Gramm-Rudman-Hollings Act” are the same thing...
Well said, Elendur.
You sound like Hugh Hewitt on KRLA-870AM.
I prefer Mark Levin on KABC-790AM. He, & me are tired of ‘your way’ -— it is time to act.
I recommend taking a hand gun self-defense course, and purchasing firearms as soon as possible.
When our government refuses to listen, we will have to make them listen.
And, if you do not understand what point I am trying to make, you are part of the problem. What I am saying is, we will defend our God-given rights, those rights carefully and thoughtfully listed in the Declaration of Independence and the U.S. Constitution. The ideas that became the Bill of Rights, were discussed thoroughly by our Founding Fathers in the Federalist Papers.
Seccession by the States from the “Federal entity” is a solution. The States will retake the power assigned to themselves, which was stolen from them by the Fed.
Do you understand?
Read our founding documents, and think about what is discussed therein.
OK... please explain why it always seems to be the Republicans who take the best deal the Democrats are willing to offer and not the other way around... The American people are getting what they wanted and deserve.
For God and Country... Geronimo, Geronimo, Geronimo!
[I’d like to know just what you would have done IF you only control one branch of government. Just what would you have done?]
I would have refused to raise the debt limit. There you go, mission accomplished, balanced budget. That is what the House should have done.
A sudden, forced 45% reduction in federal spending in one fell swoop would have caused the Dow to plummet, unemployment to increase to 11 - 14% (federal and contractor layoffs), etc., etc.
Now, some Cloward-Piven types say “let it crash, it has to...” but let me ask you a question...
If all the above happened, what would happen in November 2012? The GOP House would be squarely blamed for the chaos, and thrown out of office, along with Obama’s re-election.
Then, the new Dem Congress just raises the debt ceiling anyway, but this time, the revenues are even lower due to higher unemployment and lower GDP than we have now.
I don’t think the Tea Party is a big loser. If it wasn’t for the Tea Party then our Reps would have signed the increase with not even a discussion of cuts.
Taking on the old establishment was never going to be easy and I hope no one thought it would but what was established is that they can be beat.
We had the votes in the House, if only Boehner & Cantor & the spineless Repukes would have exercised it. There were 2 CR's (Continuing Resolutions) in Dec 2010 and April 2011, in which the House Repubs simply kicked the can down the road to avoid dealing with increasing the debt ceiling or submitting a budget for 2012. Finally when they could not delay any further at this time, they wilted like flowers in a scorching heat, and gave 0dumb0 the crown jewels, namely a $2.4 TRILLION increase to the debt limit till after the Nov 2012 elections. Boehner, McConnell & the Repub weenies just gave the 2012 election back to 0dumb0 and to the House & Senate demoRATs, along with a $2.4 TRILLION war chest. The House will flip back to the demoRATs in 2012 and the Senate will see more DemoRATs rather than fewer.
Funding originates in the House. If Boehner & the Repubs had any balls, they should have done the following immediately 2 months ago.
All Boehner & the Repukes had to do was to set the stage right at the very beginning and to declare emphatically with no hesitation.....
1) Not one penny increase to the debt limit
2) Mandatory spending cuts of $1 Trillion in 2012, including defunding Odumb0Care entirely.
3) To hell with "spending cuts" that reach out for 10 years. It is totally false & bogus & will be overturned with the next socialist (and socialist lite) Congress.
They did none of the above and instead gave 0dumb0 what he was really after, the $2.4 TRILLION increase to the debt ceiling. Now 0dumb0 can spend & bankrupt us like crazy with or without tax hikes, because he will either simply borrow more or print more money.
Boehner & the Repukes blew it in huge way.
When bonehead sent up the bill with the cut and balance provision and immediately said he had an alternate plan he telegraphed for all to see this was a sham, period. He gave those who needed some cover the opportunity to say the voted for the bill which did these things while telling the world, including the dimbulb in the oval office, don’t worry, you will never see this bill on your desk. Surprise, it never got out of the senate. I lost all respect for him at that point because I could see the drill, a charade. Then they send up another bill knowing full well the senate was going to shred it and dictate a bill back which is exactly what happened.
I noted to my sham congressman who voted for the first bill and widely noted his vote and then voted to approve the final bill he is through as far as I am concerned. I hope there is a primary challenge and he loses. A dem will never win in this district and he knows it.
Wow, you really are clueless.
What does the US Constitution do for/to the citizenry, and for/to the government, in your opinion?
45% reduction would cause the Dow to plumment?
Where’s your reasoning?
The almighty DOW dropped 266 today, trending downwards, on this latest “clueless action” by the Fed representatives.
I believe the correction would “rock the world” — but in a ‘stings a little, but now I am innoculated’ kinda way ....
Actually, a 45% reduction in federal spending equates to a 45% reduction on the burden imposed on the private sector and financial markets. A balanced budget would necessarily force a lot of regulatory and enforcement agencies to close.
The effect of this upon the markets and private sector would be staggering. No longer would industry be hampered by endless, conflicting, heavy-handed bureaucratic oversight and confiscation of profits. The financial markets would be assured of the stability of the USD and viability of US Treasury bills.
When a TEA party congress and president implements a balanced budget and shuts down a large sector of the bureaucracy the economy will take off. Until then the affliction is inescapable.
You really don’t think the markets would react negatively, at least in the short-term, to 15 million people either losing their jobs (Fed workers) or not getting paid for an unspecified period of time?
The short-term effects would still be very current in Nov. 2012.
Over time, yeah, you’re right, but short term?? Chaos.
Absolutely not! The markets would make a direct correlation -and correctly so- that the loss of that much of government bureaucracy will reduce government oversight, free up economic activity while also providing additional capital available for investing.
It would be a sharp re-bound because the stock market and bond market would jump immediately. This would make substantial funds available to corporations to take advantage of the now freed-up marketplace to expand production and take market share.
It’s how free markets operate. When we return to one the economy will recover very rapidly.
“It’s unpredictable what a default would have done. But I’m betting it wouldn’t be good. And I’m willing to bet Obama is totally willing to destroy the US economy if given a chance. And I can assure you that the Mainstream News Media would have blamed it on the Republicans not compromising. This would have led to a disaster in 2012.”
This is the kind of attitude that assures that the spineless Repubs will NEVER tackle the tough issues and instead be content to let us go over a cliff. The GOP leadership acted completely out of fear and did NOTHING to counter the false narrative of a default-as is evidenced by people right here on FR buying into that notion. The math is pretty simple:
1. The govn’t takes in roughly $200 billion monthly in revenue.
2. The govn’t spends roughly $300 billion each month.
3. It costs the govn’t roughly $20 billion to pay the bondholders and service the debt each month.
Therefore, all that is needed is to take the first $20 billion in revenue and pay the bondholders, and you have no default, pure and simple. Take the remaining $180 billion and prioritize spending, obviously making some tough choices along the way.
This is what households have to do when they can no longer borrow any more money to support their spending levels. It’s called living within your means.
The GOP was holding all the cards AND 65-70% of the American people were against raising the debt ceiling until the media started screaming “Armageddon!” This is a situation the American people could have understood and gotten behind us on if we’d bothered to educate them. But instead, our gutless leaders decided to cut and run and take the “best deal we can get” and get out of town. Our leadership is a total disgrace.
As bad as this option was, it would have been far better to give Obama a clean debt ceiling increase then this pile of crap they call a compromise.
I'm not going to 'blame' anyone. In view of the nationally coordinated and likely fraudulent campaigns against Angle and O'Donnell with incredible press attacks, I don't believe any other candidate would ahve fared much better, just maybe had more dirt to dig.
Regardless, I think when the sh*tfitting is done, everyone should pull their skivvies out of their cracks and get down to business.
We are in this for the long haul. This isn't some one-day-picnic in the park deal, although those are nice.
If we have the sense to take a page from their playbook, we make progress where we can. We run a couple of outrageous candidates--outrageously Conservative candidates--especially in districts we do not expect to take anyway, and let the media paint them as "extremists" so everyone else of ours on the ballot looks more mainstream, even to them. Let the tide shift. Let's move the middle of the road back to the middle and get it off the left shoulder.
The biggest and most consistent mistake the Republican Party has made over the last three decades is to let the media paint someone as an "extremist" and then shrink away from that person, the truth, and being right to avoid being painted as "extremists" too.
Instead of throwing ANYONE on our side under the bus, let's embrace them, and let them lead the way like an icebreaker.
The Left has used their extremists this way, with great success, while the Republicans have painted themselves into the Liberal corner trying to seem "Moderate" the whole time they have let the Left redefine the term.
This isn't happening overnight. A minimum of three Senate elections, and maybe five, to turn the tide, and we have to build enough of a group in the House to hold the line. If only half the Freshmen got Beltway Fever, that's far better than business as usual.
The ones who forgot how they got to DC should face primary challenges.
We won't get ahead by voting against RINOs in the general, but we can toss them there. In the meantime, they are placeholders who might not vote Democrat every time while we make progress on other fronts and in other districts.
It will take time. THe MSM will to continue to attack us every step of the way, revile us as "extremists" and keep hyping the "terrorist" meme even as the Government arms criminals and excuses 'flash mobs' and the obviously violent and terrorist of other groups of people who are not us.
Expect as much, they have been doing this, they are just getting more shrill. I really don't think any more people believe this than did swallow that dung sandwich in the first place.
I pray the Republic can survive this crap.
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