Greece's New Trojan Horse, And What It Means To America

The Greeks, faced with what amounted to an ultimatum from the EU rejected further austerity measures and decided yesterday not to accept the EU's proposal by a whopping 61%. It's not hard to see why.

Greece's debt now exceeds 177% of their GDP.They owe massive amounts to their bondholders and other creditors, whom already took a huge haircut for the last bailout. In order to pay the next payment due on what they already owe, they needed yet another bailout and what Greek's left wing PM Alexis Tsipras called 'debt relief.' That essentially means they want EU nations like Germany to pay off part of Greece's debt.

In response,the EU, led by German Chancellor Angela Merkel offered a take or leave it proposal that would have given Greece enough money to pay off the IMF, which will then give them the money to pay the European Central Bank, and so on and so on. But the EU also demanded severe austerity measures to do it, including spending cuts, reforms to Greece's expansive pension and social welfare system and 'labor reform', which means more cuts in civil service jobs. That's what the EU wanted in exchange for yet another 240 billion euro ($262.7 billion) bailout.

To add an additional bit of arm twisting,the European Central Bank (ECB)took the step of cutting of all cash to Greece's banks, which are dependent on it since they were connected to the system. The banks are now closed, with ATM deposits limited to 60 euros (about $66) per day if you can find an ATM that still dispenses cash. Greeks are reverting to barter to purchase food and ordinary household supplies, and Greek banks are forecast to run out of money totally sometime this week.

What's really going on is sheer politics. Greece's debt is never going to be paid off, ever. And the EU knows it. What they're really after is damage control, AKA a modicum of control over Greek fiscal policy to limit the fallout.

The EU is in something of a bind. If they cut Greece some slack, other countries with major debt problems like Portugal, Spain and Italy who received bail outs but are making their payments and coping with austerity are very likely to reconsider making their own payments. After all, if Greece can get away with this, why not them? And there's also the factor of someone like Merkel having to face angry German taxpayers if Greece slides away from its obligation and they have to pick up the slack once more.

By the same token, if Greece is forced out of the Eurozone, it sets a precedent for others to do the same thing and have the whole over-leveraged structure topple over.

So the result of this Sunday's referendum means there's going to be one of two outcomes.

Either the EU will cave in and make a better offer, which is exactly the argument PM Alexis Tsipras used to urge Greeks to vote no. Or the EU will decide it's had enough of Greece, and Greece exits the euro.

From Greece's point of view, either way works, really.Again, here's why, in a nutshell..



Whatever happens, Greece is in for some pain, but I think they'd probably be better off simply dropping the Euro, which is exactly what I wrote in 2012.

Dumping the euro and adopting the Greek drachma, which would of course devalue naturally would have several salutary effects once the initial chaos subsided. Greece would no longer be locked into a fixed exchange rate, which would make its exports more affordable and undoubtedly create a boom in tourism, one of Greece's chief industries. Plus, let's face it, no one is going to lend the Greeks money or buy their debt for some time to come at anything like decent rates, so they might be better off just wiping the slate clean with a bankruptcy and starting fresh.

Not only that, but if the Greeks are smart, they will institute their own form of austerity reforms. The costs of government is nearly half of Greece's GDP right now (49.3%). A great deal of money could be saved simply be revaluing civil service salaries and pensions in drachmas instead of euros at a government set exchange rate that could be far less than the actual market rate.

There's an interesting lesson to be learned here, with an example from the other side of the Mediterranean.

In 2004, Israel was faced with a similar financial debacle, made even worse by the high cost of Israel's defense needs. At that time, Greece actually had a higher per capita GDP than Israel did and was arguably in much better financial shape overall.

Over the last ten years, the story has changed considerably.Greece's per capita GDP has actually shrunk in terms of 2004 dollars, while Israel's has grown by a whopping 50%. Unemployment in Greece more than tripled, from 8.4% in 2002 to 26.5% in 2014, while unemployment in Israel dropped by more than half from 12.8% in 2002 to 5% in 2015.

In 2004, both countries had a similar proportion of their GDP needed to service their debts, around 94%. Since then, however, Greece's has shot up to 177.2%, while Israel's fell to 68.8% and dropping in the same period of time. Israel's current credit rating is A+ with S&P, with no credit rating company rating them below A. Investors are flocking to invest in Israel, and the country's economy is projected to grow this year by over 3%.

Greece's credit is rated by all credit rating companies at CCC- by Standard and Poors, the lowest possible rating, with no credit rating higher than CCC. Foreign investment is negligible, and the economy is actually shrinking.

So what happened? It's simple, really.

Between 2002-2007, Greece borrowed lavishly on its EU credit card and used the money to increase government size and expenditures (at one point, it seemed like almost everybody worked for the government). They 'invested' in building projects fronted by the well connected and bought votes in the form of more social welfare "benefits" for the public they couldn't afford, like those famous pensions from the age of 57. Meanwhile, raising taxes and producing red tape to try and match expenditures with income and add more revenue made Greece a poor place to invest and do business in. Greece was rated 84th in the world in the most recent Economic Freedom of the World Index. Greece, to put it bluntly, is a prime example of why the EU is eventually going to come apart at the seams.

Without access to rich Uncle IMF or the ECB, Israel solved its situation by doing exactly the opposite Greece did, with self-imposed austerity programs, privatization, cutting government red tape to encourage Israeli entrepreneurs and cuts in government spending.Many of these reforms were carried out under the present Prime Minister, Benyamin Netanyahu when he was Israel's finance minister. Essentially, these reforms got Israel out of its financial mess by weaning Israelis away from the quasi-socialist system that created the mess in the first place.

So how is what's going on in Greece relevant to America? As a warning.

The United States isn't in Greece's position, at least not yet. But we're traveling on the same road...just give us time. Right now, our debt to GDP ratio is 101% and increasing. Growth is stagnant, inspite of thefairy tales being spun in Washington. Moreover, we also have a metastasizing government, and billions in unfunded social welfare mandates and pension obligations...and to the aggravate the situation, the Obama Administration no longer enforces our borders and is allowing millions of people to come here and stay illegally to add to those unfunded, budget busting social welfare mandates. As Europe has discovered, the majority of these migrants will be tax dollar recipients rather than tax paying contributors.

Like Greece, we also have a government that likewise strangles entrepreneurship with high taxation, arcane and costly regulations, red tape and diktats.

And the reckoning could be closer than we think. What if foreigners stop buying our debt, or demand a higher interest rates because our debt lowers our credit rating again? Suppose China or the Arabs decide they need a few billion to spend at home or that America simply isn't the investment they thought it was and engage in a massive sell off? What if a major American bank goes under because a Chinese or EU bank whose paper they hold had a major stake in Greece or derivatives based on those securities? Given what's been going on lately with the Chinese stock market, that's hardly an unlikely scenario.

Even if nothing like this happens, one thing is certain. It's only a matter of time until we run out of running room and other people's money. We're not too big to fail, and if we continue on this road, we will eventually get into Greek territory.And there's no one to bail America out, at any price.

The old saying from Homer's Odyssey is 'Beware of Greeks bearing gifts.' In this case,the warning we ought to take from Greece is no Trojan Horse, but a gift we shouldn't refuse.

Roundup OnThe New 'Cromnibus' Spending Bill...'

The new 'Cromibus' spending bill passed the House yesterday and went to the Democrat dominated Senate. It essentially funds everything through September of 2015, even Michelle Obama's lunch program.

This essentially is an attempt to undercut the incoming GOP congress by removing its main weapon..the power of the purse.

The sole exception is the Department of Homeland Security which is funded until Feb. 27, 2015. That's a bone thrown at GOP conservatives to give the new congress something to work with to try and fight the president amnesty by executive diktat.Expect Boehner and his cronies to fight any attempts to rein in President Obama's amnesty order tooth and nail.

Sarah Palin:It stinks to high heaven. Did arrogant politicians not get the memo that Obama’s agenda was decisively defeated in last month’s historic midterm landslide? Good Lord, America said loud and clear not just “no” but “hell no” to Obama’s failed policies. Americans who pay attention said absolutely no to Obama’s amnesty for illegal aliens.

We also said no to the mother-of-all unfunded mandates, Obamacare, and voters believed promises that they would ratchet down the $18 trillion debt. Well, our bad for apathetically trusting politicians. No, on second thought, it’s not “our bad.” Some of us warned and worked hard to elect candidates who would buck the status quo. Many conscientious Americans did all they could to open the eyes of low-information voters. It was tough going up against Obama’s lapdogs in the media and the power liberals have to play their politics of personal destruction against commonsense conservatives.

But really how out-of-touch do these politicians have to be to misunderstand our recent mandate to stop Barack Obama's fundamental transformation of the greatest nation on earth?

The Republican Leadership in the House just flipped American voters the bird by sidelining the new Congress we just elected.

GOP Rep: House Leaders Made False Promise to Get My Crucial Vote :Representative Marlin Stutzman (R., Ind.) accused House Republican leadership of reneging on a deal made with him to get his support on a crucial procedural vote that almost killed the $1.1 trillion cromnibus funding bill.

“I was very surprised and even more disappointed to see the cromnibus back on the floor,” Stutzman said in a Thursday evening statement. “The American people deserve better.” [...]

“I supported the rule because I was informed by leadership that the cromnibus was dead and a short term CR would take its place,” Stutzman said.

After President Obama came out in favor of the funding bill, Republican leaders spent the day whipping their members and hoping that Democrats would deliver the requisite number of votes.

“The cromnibus bill, over 1,600 pages long, does many things but what is most important is what it does not do,” he said. “It fails to directly address President Obama’s dangerous executive action on immigration and fails to include many of the solutions that could have been passed in January with a Republican House and Senate in an open process.”

Dave Brat (R-VA) in a statement:“I had two opportunities to try to prevent the omnibus bill from becoming law, and I exercised both of them. Regardless of the many policy disagreements I had with the bill, this vote ultimately wasn’t about policy for me. This bill funds an illegal act. Above all, this vote was about following the law and the Constitution.

“Without the amendment that my House colleagues and I proposed yesterday, this omnibus bill allows funding for President Obama’s unconstitutional executive amnesty for approximately five million illegal immigrants.

“Despite having claimed several times that he didn’t have the authority to enact amnesty without Congress, President Obama acted anyway. Under our Constitution, the president can’t create the law; the president has to follow the law.

“I cannot vote to allow an agency of this government to commit an act that the president and the House leadership on both sides have previously agreed is illegal. Allowing the funding of executive amnesty, even just until the end of February, allows the program to be implemented and amnesty to be enacted.”


John Hayward, Human Events: Anyone who raises the slightest objection to this panicky spending bonanza is denounced as a penny-pinching extremist monster who just wants to kill children, puppies, and kittens for fun, by shutting down the government that keeps them alive. You don’t want Obama to throw up barricades around your national parks and memorials again, do you? No? Then shut up and spend.

The sole reservation in the winder spending festival is the Department of Homeland Security – which, as Fox News explains, is only funded through February, so the GOP leadership can pretend it’s going to stage a huge fight over Obama’s illegal amnesty orders next year. This is supposed to mollify the starchy citizens who still care about antiquated notions like the rule of law, the separation of powers, the value of citizenship, and national security long enough for the Establishment to enjoy its holiday vacation:

The bill finances the day-to-day operations of every Cabinet department except Homeland Security through Sept. 30, 2015, with $521 billion for defense and $492 billion tied to non-defense. Another $64 billion is provided for overseas military operations.

However, the plan would only fund the Department of Homeland Security through Feb. 27, 2015. That is a move by House GOP leaders to tee up a debate in early 2015 over the president’s recent executive action that could suspend deportation for as many as 5 million illegal immigrants.

Some conservatives nevertheless want to wage that battle now, and use the current spending bill as leverage. Though the House voted last week against Obama’s immigration plan, these lawmakers want to do more.

Strong opposition to the House budget plan from the Republicans’ conservative wing could force GOP chamber leaders to rely on Democratic votes to avert a government shutdown. House Speaker John Boehner can afford to lose only 17 caucus votes before he must turn to support from House Democratic Leader Nancy Pelosi.

Pelosi, D-Calif., has said her party would be willing to help but has signaled she may make some demands.

Wonderful. Let’s have a big round of applause for the GOP Establishment, ladies and gentlemen! They managed to throw away the most remarkable electoral victory in a generation in only one month, maneuvering themselves into a position where the losers who got crushed will be making demands to win their support for a bill that effectively ratifies their will through half of their sojourn in electoral exile.

There was no reason to give the defeated Democrats anything except a stop-gap bill to fund the government through January, at which point the incoming Republican majorities should have exercised control over everything. If the Democrats don’t like that deal, let them shut down the government in a fit of pique, and tell voters how they party they just threw out of power should be allowed to control their lives for an extra year. Not only would that be smart politics – giving the Republicans more fiscal leverage to stand up for America against Obama’s amnesty, instead of just funding for the Department of Homeland Security – but it would represent more sensible and responsible government. All of this multi-trillion-dollar monstrosity is linked together; all of it should be on the table; the flab should be liposuctioned out of every agency at once in a comprehensive plan for fiscal sanity and increased American liberty.

Drew At Ace of Spades HQ: What we should be focusing on is that the establishment of the GOP was far more interested in cutting deals with the Democrats than they were in exercising the power of their new majorities come January.

Look at the provisions that the GOP included in CrOmnibus that set off the Democratic progressives and some TEA types...

First was an increase the limits donors can give to political parties.

The provision would increase the amount of money a single donor could give to national party committees each year from $97,200 to as much as $777,600 by allowing them to set up different funds for certain expenses. The change would be a huge boost for party committees that have faced steep challenges in recent years from well-funded outside groups.

...

“Conservatives support the First Amendment and believe there should be no limits on political speech,” said Ken Cuccinelli, president of the Senate Conservatives Fund. “Unfortunately, the new limits included in the omnibus only increase political speech for party insiders while silencing the majority of Americans who are fed up with Washington.”

The second was a 'reform" of Dodd-Frank. Republicans have been running against Dodd-Frank for years. Normally their critique is that it hurts small businesses that can't afford to comply with a maze of regulations. The reform the GOP stood fast on? A provision literally written by Citigroup.

The derivatives provision would let JPMorgan, Citigroup Inc. (C:US), Bank of America Corp. (BAC:US) and other banks trade almost all swaps in divisions that have government backstops like deposit insurance. It would repeal a requirement that some of the trades be pushed out to separate units, which Wall Street argued would drive up costs for clients and increase risk in the financial system by moving the trades to firms less regulated than banks.

So thanks to the brave leadership of John Boehner, Harry Reid and Barack Obama we made it easier for political parties to fend off outside interest groups and make sure banks can trade derivatives again with the knowledge that if things go south, the taxpayers will foot the bill. The chairman of Citigroup certainly must be pleased with his personal lobbying efforts.

I'm not one to say there's no difference between the GOP and Democrats, that's silly. But it's not nearly enough or as much as they like to pretend.

The story isn't that a minority of the GOP found common cause with some Democrats to oppose these deals, it's that after facing a populist backlash after the failed GOP administration of 2001-2007, the party has successfully weathered the storm and returned to business as usual. Big donors and big business get theirs. Meanwhile voters who thought they voted for spending cuts and opposition to amnesty just six weeks or so ago are told, sorry can't do it. Good luck ever collecting.

Rush Limbaugh: The news is that the Republican Speaker of the House has thrown in with Barack Obama. I don't care what the Democrats are doing. What does that matter? Holy smokes. John Boehner has just squandered the election results before the Republicans even are sworn in to run the Senate, along with the House, if I've got this right.

Yeah, we're supposed to look the other way while our Speaker of the House gets in bed with Obama and advances the Obama agenda, takes care of it, amnesty, Obamacare, fully funded, done deal. The election must not have mattered.

And then we got Elizabeth Warren out there who's staking her claim to the presidency while Mrs. Clinton isn't looking. To show you how out of whack things are, Elizabeth Warren of, "You didn't build that. You didn't make that happen" fame, well known communist socialist Elizabeth Warren is now being credited as practically the only person in Washington standing up for the little guy via her opposition to some of the relaxation of regulations in Dodd-Frank and some of the campaign finance.  By the way, about that campaign finance stuff, that everybody's upset about in the omnibus bill, I'm gonna tell you exactly what that is. 

We had a caller about it yesterday. The lady was fit to be tied. She was angry and she was right to be, because the limits have practically been obliterated, which means that corporate donors can just start giving left and right. It used to be a limit of $37,000. Now it's $737,000, something.  It's incredible.  But the point of it, do you know why it's in there?  You know why?  The Republicans put it in.  You know why it's in there, folks?  This is how corporate America's gonna defeat the Tea Party.  By allowing limitless donations from that crowd under the rubric that it's campaign finance and money is speech and freedom of speech and First Amendment. The theory is that Main Street, Tea Party people can't come close to competing with corporate money. 

So it is a Republican establishment ploy that kind of dovetails nicely with Obama sicking the IRS on the Tea Party to basically eliminate them as a viable threat by relaxing a registration in Dodd-Frank that pretty much permits corporations to spend any kind of money they want on politics.  It's kind of a dichotomy.  It's a dilemma, in terms of figuring out what to think about it. 

Let me tell you about a congressman named Marlin Stutzman.  Marlin Stutzman is a Republican from Indiana, and he is claiming, he's put out a press release on this now.  He's admitting to this publicly. He's not relying on a publication to say it, he's saying it himself that he was lied to; that he was lied to by the Republican leadership; that the Republican leadership reneged on a deal they made with him to get his support for the omnibus bill.  Want the details?  He said, "I was very surprised and even more disappointed to see the cromnibus back on the floor. The American people deserve better."

 Elizabeth Warren, is, for all intents and purposes, threatening to shut down the government.  Now, where this thing is in the Senate's kind of up in the air, but she's threatening to shut down the government.  And the media is praising her.  The media is praising her for principled opposition.  And, as you know, Republican shutdown, why, it's the end of the world, it's the end of everything as we know it.  [...]

 The media is reporting this as, for all intents and purposes, a done deal.  They are reporting that all the action was in the House, and once the House voted for the $1.1 trillion omnibus, since the Democrats run the Senate it's a fait accompli that it's gonna get done.

That's not the case because there's a flamethrower over there named Elizabeth Warren, and she's not happy with what's in the Republican bill -- and neither, for that matter, is Nancy Pelosi.  So the Senate's not done on this.  They did a couple-of-days spending bill, and the Senate's gonna take its time and still argue about it, debate this.  Now, the consensus is that the Senate will ultimately pass it, because that's what Obama wants, and the Democrat Party's still loyal to him

But that's not a fait accompli.[...]

President Obama and John Boehner want a bill that the bases of their respective parties reject.  Boehner is enabling (or did enable) the passage of a bill in the House that the Republican base wants no part of.  They don't want Obamacare fully implemented or funded, and they do not want Obama to get away with this executive amnesty.  Boehner has worked with Obama

And the Republican version of the bill in the House flies in the face of what both the Democrat base and the Republican base want.  The Democrat base doesn't like the relaxation of regulations in Dodd-Frank, which is campaign finance, basically. There's some things the unions don't like about pensions as well, because their pensions are gonna end up being devalued.

There are a couple other things in it that the Democrat base is not happy about.  Another thing being reported is that Elizabeth Warren is taking a stand on an issue that, if successful, would embarrass Obama.  This is being reported.  This is not my opinion.  You can find this story somewhere in the Drive-By Media stash today. The stand that she is taking on the issue is a very populist stand.  It is a stance against Wall Street. 

Wall Street has been given a great gift in the omnibus spending bill: Relaxation of regulations on Dodd-Frank.  Opposing Wall Street... Remember Occupy Wall Street?  Opposing Wall Street is a huge ticket item for Elizabeth Warren, particularly if she wants to run for president.  The presumptive nominee, of course, is Mrs. Clinton.  We're right back where we were 2007 and 2008 with the Washington establishment of both parties concluding that Hillary Clinton will be the nominee.

We've been there. 

We've done that. 

And out of the blue, in 2007, came Barack Hussein Obama.  Out of the blue this year is coming Elizabeth Warren, and she's got a ready-made entry and a ready-made ticket with her populist opposition to the Wall Street favors that are in the omnibus bill.  Obama is in favor of relaxing those regulations on Wall Street because Obama is in bed with Wall Street and has been from the get-go, but his base is not really aware of that. 

The Democrat Party base has been driven insane with hatred for Wall Street. They've been driven insane with hatred for the US military. They've been driven insane with hatred for the CIA.  The Democrat Party base has been driven insane by the radical nature of what everybody thinks are mainstream Democrats.  Obama is as closely tied and in bed with Wall Street as anybody is, and Elizabeth Warren is not.

And she is distancing herself from the Democrats and particularly from Obama in a major way by taking a stand on that issue regarding Dodd-Frank.  If this bill goes down to smithereens because of this, it would be an embarrassment to Obama.  Again, this is what's being reported.  It is also being reported that Barack Obama is being abandoned by Democrats by the score on this because the Democrats are not happy with a couple of provisions. 

See, the Democrats are not invested in Obamacare to the degree that you would believe.  Remember, Obamacare is why they lost, in their minds -- and you've heard by now the old stat that half the Democrat senators remaining in the Senate who voted for Obamacare, for one reason or another, are gone.  We've had Chuck-U Schumer and Tom Harkin and a number of other Democrats publicly throw Obamacare under the bus claiming it was bad bill.

(summarized) "It was a mistake timing-wise. We shouldn't have done it before we shored up the economy." There are Democrats running away from Obamacare.  It's John Boehner who's in bed with Obama on Obamacare, not the Democrats.  And one of the things we're supposed to be taking great satisfaction from watching is the Democrat fallout over Obamacare. 

But Boehner has picked up the slack there with the Republican omnibus bill, which fully funds it.  So now the Democrats are free to walk away from it, which they wanted to do and have.  So when you see it reported that Democrats are abandoning Obama by the score, one of the things they're abandoning him on is Obamacare.  Look, they have lost big in the last two midterm elections.

This is still... The scope of this defeat is still not accurately reported in the Drive-By Media, although if you keep your radio tuned to this station, you will soon hear that the Washington Post has a story today which fulfills a prophecy of mine back in 2008, 2009. I wasn't the only one, but I might have led the pack on this, as referring to Barack Obama's presidency as Jimmy Carter's second term. 

Today's Washington Post pretty much says that, and they do it with polling data.  They do it on the basis that there is a nationwide malaise among the American people, that they are despondent and depressed and feeling hopeless. There's no opportunity for the American dream. There's no opportunity for economic advancement.  It's not a pretty picture, and it's being painted in the Washington Post.  Jimmy Carter's second term. 

Lisa Lerer, Bloomberg: On one side of the debate are strategists and officials, including some aligned with Clinton, who believe their path to the White House in the post-Obama era rests with wooing centrist, working class voters.  To progressive activists, union members, and other parts of the "professional left," as an Obama aide once called them, victory lies in running on an aggressive, populist economic message.

"Some of the jockeying now is trying to strategically make sure Hillary understands that she can't be an economic moderate without generating pushback," said Andy Stern, the former head of the Service Employees International Union. "Progressives are anxious that her policies, not her heart, will be too generous toward Wall Street."

 With the Senate soon to be in Republican control, progressives aspire to become their own power center that can force Democrats to stand strong on economic issues. By aligning themselves with Warren, who’s an outspoken advocate of Wall Street regulation, groups like MoveOn not only grow membership lists and bank accounts, they also raise their profile.

While Warren is their billboard, the real target is likely Clinton. A history of pro-business economic policies and a roster of rich Wall Street donors make progressive and union activists anxious about the direction of her leadership and political loyalties. Though she has yet to announce a campaign, they're trying to send the message that their concerns should not be taken for granted.  "I think the fact that people are encouraging a person who probably isn't going to run may just be a manifestation of wanting to make clear that Secretary Clinton is not going to walk in and assume there's a coronation," said Stern. "She's going to have to work it policy-wise, particularly on the economy"

The Hill- Warren Makes Her Mark:Sen. Elizabeth Warren’s crusade against the $1.1 trillion spending bill backed by the White House firmly establishes the Massachusetts populist as a powerful player in Washington.

The freshman Democrat took on President Obama and her party’s leadership, and appeared to inspire an uprising in the House.

The fight earned her comparisons to Texas firebrand Republican Sen. Ted Cruz, another relative newcomer to the Senate who has shown outsized clout in his party.  

Warren lost the battle in the House when the spending bill was approved in a late-night 219-206 vote, and the fight is now moving to Warren’s turf in the Senate.

If she continues to fight hard against the bill, it will pull her into a deeper clash with Senate Majority Leader Harry Reid (D-Nev.), who backed the spending deal and has just named Warren to his leadership team.

 “I have to assume Elizabeth Warren is running for president. That’s what you do when you run for president. You get out front,” said Rep. Jim Moran (D-Va.), a senior member of the House Appropriations Committee who backed the spending bill opposed by Warren.

Epic Fail -Boehner And RINOs Cave, Join Dems to Push Through 'Clean' Debt Ceiling Increase

 


Republican Speaker John Boehner, and his allies in the House have made an astonishing and disgraceful retreat. After President Obama and congressional Democrats had said they weren't even open to discussing spending cuts in exchange for Republicans in the House agreeing to  raise the debt ceiling, Boehner  caved in and presented a 'clean' debt ceiling increase to the House for a vote.

Boehner and his allies in the GOP caucus originally were thinking about tacking on something modest like approval of the Keystone pipeline in exchange for the debt ceiling increase, but conservatives in the House appear to be tired of this game and wanted Boehner to insist that the White give up a lot more in exchange for raising the limits on the federal credit card.

So instead, the Speaker decided to throw in the towel, and he and Only 18 Republicans, many of them retiring after this term voted with the 200 House Democrats to push this through  and raise the debt ceiling without any quid pro quo.That essentially destroys the so-called 'Boehner rule' that pledged to quash any bills that didn't have the support of the majority of the Republican caucus. It also destroys his speakership, for all intents and purposes.

As a contrast, when the disgraceful House bill went to the Senate, it was Senator Ted Cruz who forced a vote to end cloture  by 60 votes before voting on  approval of the bill, thus forcing a lot of gutless GOP senators, some facing primary challenges out into the open. Once the vote for cloture was passed, approval was automatic since the Democrats control the Senate. And of course, some of the same Republican senators who voted to end cloture tried their usual trick and cast a cosmetic vote against the bill. But thanks to Ted Cruz, they were forced to out themselves.

President Obama and the Democrats weren't even willing to allow the GOP to add on a provision to reverse the veterans' benefits cuts that were in the Ryan-Murray budget deal. Remember that the next time our commander-in-chief mouths all those fine sounding platitudes in one of his interminable speeches about vets and the military.

Instead, the House will hold a largely cosmetic vote on this item separately, and will have to bargain hard with the White House to even have a chance of getting it through. Speaker Boehner is proposing
additional sequester cuts in 2024 as an opening gambit..otherwise know,  for those whom remember the old Popeye cartoons, an offer to pay Thursday for a hamburger today.

This really is the end of an era, when a GOP-led House would abdicate its constitutionally mandated power in such a craven fashion.It really is all about leadership and strategy, and Republican leadership that understood that  would have been bringing relevant bills  out almost weekly and forcing Democrats to vote against it, ready made campaign fodder for November. Instead, we get this cowardly, clueless headlong retreat.

As for John Boehner, it's the end of his speakership as well. The Obama Administration has no respect for him whatsoever, and neither does the majority of his caucus. If he had any real regard for the country and his party, he'd either resign as Speaker right now or at least announce his intention to resign, so the House could begin vetting someone to replace him. 

The reason Boehner even became Speaker in the first place  is because Republican conservatives and the Tea Party elected a House majority that they had every right to expect to represent those views.Instead, the man who began his tenure as Speaker by reading the Constitution on the House floor betrayed them, as well as the basic precepts of that document. Whether he did it intentionally or out of weakness and fear doesn't matter at this point.

Get you gone, Cataline, get you gone.

The House Passes The Budget, 332-94

The budget deal crafted by Paul Ryan and Democrat Senator Patty Murray passed the house with both parties split on the matter.Republicans were split 169-62, while Democrats divided themselves 163-32.

Oddly enough, many Tea Party conservatives were joined in voting no by a number of far Left Democrats, who were upset because they felt the deal didn't create enough new spending, and was not tied to an extension of emergency unemployment insurance aid, set to expire before the end of the year.

In the end,party leadership in both parties shoved this through, with as Ryan counseled “not to let the perfect be the enemy of the good,” and Minority Leader Nancy Pelosi, D-Calif., telling Democrats to “embrace the suck” of the agreement.

I think I've already been pretty clear about what I think of this budget deal...I think it stinks to high heaven. It allows a large increase more discretionary spending now in exchange for a paltry $23 billion in cuts much later...maybe.

I especially like what David Stockman, President Reagan's former budget director had to say about this nonsense:



The political rationale for the GOP in crafting our first budget in five years is that they want to avoid a government shutdown becoming the main topic of conversation rather than the failure of ObamaCare. I reject that utterly... first of all because it says implicitly that there isn't a Republican in the house or senate capable of explaining to the American people what kind of road to ruin we're on, and why they threat of a shutdown is necessary to make President Obama and his party institute some kind of fiscal sanity, and second because ObamaCare is going to continue to be the gift that keeps on giving as employer offered plans are targeted starting January 2014.

 Even if that wasn't true, it is no excuse for congressmen and congresswomen to totally abandon their responsibility because of what the consultant class is telling them. They are, after all, there to govern. Here, by the way are the names of those in the house who voted against this, with the Republicans in the non-italicized print.

I have no idea at this point what to make of Paul Ryan. He's obviously a smart guy, but what are we to make of someone who claims to champion fiscal responsibility on the one hand while endorsing budget busting amnesty for illegal aliens on the other?

As for John Boehner and the rest of the GOP leadership, the sooner they're gone, the better.

The New Budget Deal - Spitting In The Wind

 

Paul Ryan and Democrat Senator Patty Murray have completed budget negotiations to avoid another government shutdown.

It isn't pretty.

It amounts to a two-year deal that would reduce the deficit by a piddling $23 billion over ten years without raising taxes. It would also increase discretionary spending ( the money not on autopilot for entitlements like ObamaCare) to $1.012 trillion for fiscal year 2014 and $1.014 trillion for fiscal year 2015.To put this in context , our deficit is now $17 trillion. $2.3 billion per year doesn't even cover the annual interest on that money at current rates.

The money to replace the actual cuts of the sequester, $63 billion, would be raised by 'new revenues', known to normal humans as increased taxes and fees and by "future cuts," dependent on the Democrats actually going along with them. Again, in the real world, this is known as 'hey, lend me $20 until the end of the month and I swear, pinky promise that this time I really will pay you back.'

Oh, and that $63 billion? It comes, among other things, from vastly increased airline 'security fees' which won't go to the TSA but into general revenues, cuts to federal and military pensions and higher payments for federal insurance of private pensions. Hey, the little people won't miss it!

Oh, and just for giggles..there a little provision stuck deep inside that limit's the GOP's ability to block future tax increases:

The bill includes language from the Senate Democrats’ budget that voids senators’ ability to raise a budget “point of order” against replacing the sequester cuts with tax increases.

The process is quite complicated, but in practice it grants Harry Reid the authority to send tax increases to the House with a bare majority, rather than the 60-vote threshold that would be required under a point of order.

The provision has angered key Republican senators. Reeling from Harry Reid’s unprecedented use of the “nuclear option” to end the filibuster on executive-branch nominations, they are dismayed that Paul Ryan would have backed another limit to their power.

“This is an appalling power grab that should never have been allowed to be in a final agreement. It’s essentially the ‘nuclear option’ part two, eroding minority rights in the Senate even further. Harry Reid must be very happy,” a Senate GOP aide says.

Here's Paul Ryan trying to sell this on Mark Levin's radio show:



I give Ryan props for appearing here and taking a shot at selling this to an avowed fiscal conservative like Levin.But essentially, I think Levin has it right...it's increased spending today in exchange for cuts, maybe,tomorrow. Remember, after the last budget deal, the House only passed appropriation bills that increased spending and not the ones that actually cut spending once the deal was cut.

As Ryan mentions several times, the club the Democrats are using is concentrating the sequester cuts on our already badly affected military. And the fact that the House GOP leadership apparently has no one whom can explain to the American people in real terms what this ongoing Ponzi scheme means, how it will affect them and their children and why a government shutdown to force some fiscal sanity on President Obama and his minions might be necessary.

As an aside, I have to admit that given his support for amnesty for illegal aliens, something that will vastly increase the deficit because of chain migration and the government benefits that entails, Ryan's talk about balanced budgets rings mockingly hollow.

However, Ryan is quite correct that minus the threat of a shutdown as an incentive, President Obama and his fellow Democrats are never going to fix the problem, and that this was probably the best deal he could make. Whether that's an adequate excuse for collaborating in the mess and sharing the blame in exchange for minor concessions is one I'll let you decide for yourself.

Certainly GOP House Speaker John Boehner thinks it a grand idea.

Mitch McConnell, Rand Paul, Ted Cruz and virtually every conservative think tank think it's not.

Eventually this sort of nonsense becomes unsustainable and corrects itself. But when it gets to that point, the pain and suffering are a lot more intense than it would be otherwise.

Unfortunately, our Ruling Class in Washington with access to Other People's Money they did nothing to earn will be just fine, thank you. That's the even bigger tragedy.

Financial Expert Stuart Varney Explains The Shutdown 'Obama Wants The Market To Go Down...'

FOX business channel's Stuart Varney explains the shutdown, the debt ceiling, and what it means to average Americans in easily understandable terms. (H/t, The Noisy Room)

Obama Gets Ready To Engineer A Government Shutdown - And Blame The GOP

 

Having proven himself (again) a miserable failure at foreign policy, President Obama's next gambit is going to be to return to class warfare territory.

Aside from having his media worshipers revive the old 'blame Bush' song to try and cover Obama's foreign policy debacles, the next step will be to force a shutdown of the government and blame the Republicans for it.

Look for our Dear Leader to make the coming debt ceiling debate to be about food stamps, 'inequality', entitlement programs, the Evil Rich (translation: non-Obama donors grossing over $250K per year before taxes) and the even more Evil Republicans that represent them.The president and the usual suspects will almost certainly throw out a few dog whistle phrases that translate as racism.

Now, the House Republicans don't have to put up with this.Especially since even a blind man can see what's coming.

They can make the debate about cutting off spending on ObamaCare, legislation that is unpopular with 75% of Americans according to the latest polls.Even the unions want off that particular bus.

The GOP can literally marry these constituents politically. And yes, no matter what nonsense you hear from the timid, both the mandatory and the discretionary funding can be cut off. Congress does exactly that with the Hyde Amendment, which prevents funds going to MedicAid from paying for abortions with exceptions for incest and rape. It is a rider that is attached to the annual appropriations bill for the Department of Health and Human Services and has passed every year since 1976.Congress did the same thing when it came to aid to Nicaragua's contras, attaching a rider to defense allocations.

The GOP could even call for a national referendum on ObamaCare. After all, since the president has illegally delayed implementation of parts of it for partisan political purposes and Americans now have a much better idea of what's in it, to channel Nancy Pelosi, shouldn't they be able to vote on it?

They can make the debate about taxation, calling for cuts for America's besieged taxpayers.

And they can make the debate about ending the very selectively implied sequester, especially when it come to our military. Americans need to know about the defunding of Tricare and the arbitrary firings of military personnel to deny them pension rights and contrast that with the money spent on the president and his wife's multi-million dollar vacations and White House galas.

In short, instead of going into defense mode, they can go on the attack, let Americans know that they oppose a government shutdown but that in exchange, they want to hold this president to some common sense measures, particularly on ObamaCare.

Will they do it? Will they begin challenging the narrative that's being advanced? They will if they want to win elections.

So far, though, crickets. But we'll see.

The New Egypt - Starving For The Muslim Brotherhood

 

The new Islamist Egypt has a number of problems, but the biggest one is that it's starving to death, because it has a population of $80 million it can't feed.

As I reported earlier, Egypt is being forced into a choice of starvation or bankruptcy:


In Egypt, in Syria, in Jordan, in Tunisia, the Arab autocrats survived by providing subsidies to their populations for food, cooking oil and other staples.Last year, when the price of cereal grains and other staples almost doubled, the subsidies simply weren't affordable any more.

When this happened in the past, the brunt was born by Asians in places like India and China. Now, with those economies expanding rapidly, the Arabs are simply being outbid and are the lowest on the food chain.{...}

Tourism, once a major source of income is severely curtailed after the reports on rapes and assaults of both locals and foreigners in places like Tahrir Square.The new Egyptian law that allows 'citizen's arrests' of foreigners is killing most of what's left.

The only part of the tourist trade that survives is sex tourism from the Arab world. That's not an attraction for westerners in view of the other risks involved in simply visiting a country that the World Economic Forum ranked lowest out of 140 countries for safety and security.Nor does it provide anything like the old revenues.

Egyptian cotton is being underbid on the world markets by countries in Central, South and East Asia, foreign investment is almost non-existent, and the gas Israel used to buy from Egypt is no longer in the picture because of sabotage of the pipeline and public outrage in Egypt against any trade at all with the Jews. Foreign aid and the fees Egypt gets from use of the Suez Canal aren't enough to make the nut.

The Islamist government had been basing its hopes on a desperately needed International Monetary Fund (IMF)loan, which would allow the Muslim Brotherhood government to pay subsidies again and give it some breathing space to get from point A to point B. Unfortunately, the IMF has other fish to fry at the moment, and is insisting on austerity cuts including cuts in the subsidies. At a time when EU countries are chafing under austerity cuts, it's politically difficult for the IMF to do anything else. And if Egypt agrees to that, they'll be facing massive civil disorder, as well as a major loss in credibility.

The Egyptian pound is in worse straits than the Iranian Rial, and no one wants it. It  has lost 60% of its 2012 exchange value against the dollar, and Egypt's supply of foreign currency is down to about three months.

Egypt, once one of the richest countries in the world agriculturally is now the world's largest importer of whea,t which accounts for an estimated $32 billion trade deficit.
The price of fava beans has skyrocketed 40% this year. The average Egyptian lives on government subsidized bread, sugar and oil. And those subsidies are in jeopardy.

The Egyptian government is expected to be short by as much as 4 million tons of wheat imports this year. Essentially they've slashed orders because they simply don't have the hard currency needed to purchase them, and instead are overestimating the coming crop.

Last week, Libya and Qatar announced that they might be prepared to lend the Egyptian Muslim Brotherhood government around $5 billion. Unfortunately, Egypt already owes that amount to the foreign companies that produce its oil and gas, and the amount it owes already for oil and wheat imports almost certainly exceeds its cash reserves. Egypt is not a major player in gas or oil, and its doubtful production will continue unless the arrears are paid up.

Even if Libya and Qatar actually produced the money(especially doubtful in Libya's case)the money would probably only cover a month or two.

Another problem in Egypt is capital flight. Anyone who actually has any money is spiriting it out of the country, usually to the EU or the Emirates.

The Morsi government likely has about three months, tops before the country goes bankrupt. What they're likely doing is playing for time to try and get better terms from th eIMF and their creditors.

The Obama Administration's contribution to all this was $1 billion in debt forgiveness, and about $3 billion in military aid to Egypt over the last year and half in spite of congress' objections and a formal hold.Oh yes, and a shipment of 140,000 teargas canisters to help the Islamist government retain power when the inevitable protests start.

President Obama has a vested interest in seeing the Muslim Brotherhood regime he helped take power stay in power.Where that ends is anyone's guess.

Obama Administration Pushes Banks To Make Home Loans To Borrowers With Weaker Credit

The Obama Administration is involved in a major effort to push banks to make home loans to people with weak credit and in the case of purchases, with little or no down payment.

According to the administration, this is going to help 'fuel recovery' and promote 'fairness, because, in the words of the linked WAPO article, "the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession."

So the administration is using the Justice Department and the Inspector General's office of HUD, (who are in charge of investigating claims of fraud and wrongdoing in the mortgage industry) to get lenders to grant home loans to riskier borrowers. They're especially leaning towards the idea of steer borrowers towards FHA, Fannie Mae and similar taxpayer guaranteed programs.

This seems like a good idea. I only wish we had some real life experience on how well it would work.

Oh...wait a minute..

Now that you've stopped laughing, here's a few facts to ponder.

First of all, there is no 'housing recovery', because the demand isn't there. People don't ordinarily take on large debt like a home purchase in uncertain economic times. New home starts are at historic lows, and I can take you to a dozen construction sites locally where someone started to do exactly that, and realized that finishing the construction would involve a new 'take out' loan to the bank and leave them seriously underwater with a property that was in the red.So the job sites are just sitting there, while the owners wait for the market to improve or for a sucker to come along and take the property off their hands.

What you're seeing instead, (because the rental market is strong) is private investors. property management companies and Real Estate Investment Trusts (REIT's)buying up homes at today's low interest rates, putting a little basic maintenance into them and renting them out at a profit.

Needless to say, the Obama Administration doesn't like this vestige of private enterprise. So they're leaning on lenders to make loans to riskier borrowers, promising them that if they go along, they won't be subject to investigation or penalties if the loans default.

I can tell you from personal experience that those guarantees are worthless. It's exactly what lenders were told during the last orgy, when they were pushed to do exactly the same thing.

Well connected Democrats like Fannie Mae and Freddie Mac executives Franklin Raines and Jamie Gorelick, among others, made millions in bonuses for pushing these bogus loans and the derivatives based on them through the system that brought on the last crash in 2008.

They were protected. It was the lenders who were used as political targets and vilified merely for doing what the feds demanded they do.It cost them billions, and in some cases saw profitable companies destroyed, along with thousands of jobs. Anyone remember Washington Mutual?

At this point, the taxpayers are already eating most of these toxic loans. Rather than let the market absorb these properties and gradually recover, the Obama Administration simply raised the dollar amount of the FHA refinance limits to over $800,000 and severely loosened the underwriting requirements to allow the banks to unload them onto the shoulders of the taxpayers.

What the Obama Administration is doing now is exactly what was done before and led to the meltdown. And the banks will go along, because they have little choice.

President Not Me: 'I Had Nothing To Do With Stopping Those White House Tours'

 

Yes...to bowdlerize Prissy's famous quote in "Gone With The Wind"...'I don't know nuthin' about cancelling no White House tours!'

You see, it wasn't our president having a major hissy fit and making the American people suffer for his own dark political purposes because Congress wouldn't raise his credit card limit again.Just like with turning loose all those illegal aliens, it was some underling.

President Obama said his administration was looking at ways to resume White House tours for school groups.

“This was not a decision that went up to the White House,” noted Obama in an ABC News interview aired on Wednesday, saying the directive came from the Secret Service.

“What I’m asking them is: are there ways, for example, for us to accommodate school groups who may have traveled here with some bake sales? Can we make sure that kids potentially can still come to tour?” Obama added.

The president said that the Secret Service had faced a difficult decision over whether to suspend the tours after sequester cuts took effect.

“What the Secret Service explained to us was that they were going to furlough some folks,” said Obama. “What furloughs mean is people are going to lose a day of work and a day of pay, and the question for them is how deeply do they have to furlough their staff and is it worth it to make sure that we got White House tours if it means you have a whole bunch of families who are depending on a paycheck who are suddenly seeing a 5 or 10 percent reduction in their pay?”

The decision to shut down the White House tours has drawn criticism from GOP lawmakers who said it was a political maneuver to rally public support for Obama’s stance in the debate over the $85 billion in across-the-board spending cuts that hit the federal government earlier this month. Speaker John Boehner (R-Ohio) said the Capitol would remain open for tours despite cuts, and has made a point of meeting with visiting groups.

Who exactly is this president trying to con, anyway? Does he think we're all stupid?Is simply announcing that the tours will continue and maybe cutting back on his and the First Lady's lavish separate vacations or furloughing some of their inflated personal staffs instead beyond President Obama's pay grade? How much of the taxpayer's money is going to be wasted on the First Lady's birthday party? Could the president maybe play a little less golf, or cut back a bit on the $100 per pound wagyu steak he likes so much?

He.Is.The.President. What exactly is he getting paid for, anyway?

What irritates me more than anything is the way the press handles this. They will absolutely not report anything remotely critical of this president, will never write anything without manufacturing plausible deniability for him and shielding him from any blame for anything.Six trillion in debt, Keystone, Solyndra,Benghazi, Fast and Furious..it absolutely doesn't matter to these folks.

Is it any wonder he never takes the blame for anything that happens? Would anyone put up with this behavior in their own home from anyone above age seven?

When my kids were very small and there was a mishap that no one wanted to admit to, it was always credited to Not Me.

That's what we have now. President Not Me.

I know I have readers on the Left who voted for President Obama. Forget, for a moment if you can, the agenda, the politics, everything else. Just ask yourself these questions: do you really admire how President Obama behaves on a human level? Do you find it admirable the way he never takes responsibility for anything? Would you put up with it from a family member, a spouse, an employee, a co-worker or a friend?

Update; This gets e4ven more putrid as it goes on. Now Jay Carney is contradicting the president, saying that yes, the White House did cancel the tours. I have to believe Carney has a shower built into his office to cleanse himself after these affairs.

Sequestration Blues...

Well, President Obama's Sequestration is going into effect.

As I said at the time, it was a stupid deal for Republicans or anyone in either party who actually cared about any notion of fiscal responsibility.

To get the obvious ObamaLie ™ out of the way, yes, as Bob Woodward has documented, it was President Obama who torpedoed a budget deal  at the last minute by hitting Speaker John Boehner with a huge additional $400 billion tax  increase after Boehner stupidly thought he and  the GOP caucus had a deal.

If it was me, I would have called a press conference, hammered the president for his duplicity and bad faith and let the government shut down. But John Boehner is, um, different. He agreed to a temporary increase in Obama's credit card limit  and a plan the president put forward for automatic cuts in the Federal budget. Again, as I pointed out at the time, it was a deal only  someone with the testicles and common sense of a gnat would have agreed to .

 it's important to remember that there's no incentive for President Obama to make any compromises. He wants to raise taxes anyway, many of the mandated cuts will come out of our military budget which he also wants to slash to the bone and best of all, he feels he can blame Republicans for it. This makes absolutely no common sense but the way the president sees it, it makes political sense and he sees it as a win-win situation: either they'll knuckle under and give him what he wants, or they won't, and he'll make political capital out of while getting some things he wants anyway.

Simple truth. This president and his minions were always going to raise taxes and refuse to cut any spending except when it comes to strangling the defense budget. It's who they are.

Just to show you how wacked out this is, here's an example from Los Angeles,but it could just as easily be your town, and when I describe it, I'm positive you'll recognize the same scam having been pulled locally.

The city elections are tomorrow and on the ballot is Proposition A,yet another half per cent sales tax increase. And how is it being sold? Constant scare ads, paid for of course by the Democrats and the public employee unions. According to them, if Prop A doesn't pass,the police and Fire Departments won't be able to respond to emergencies, school teachers will be laid off by the busload, school lunch programs will be cut, street maintenance will suffer, the sky will fall...

If this sounds familiar, it's because it's a tried and tested formula that's always used when 'progressives' want more of your money. It's always 'pay up, or else' and the cuts are always targeted at things designed to frighten the average person into giving up the money. They're never targeted at things government could make cuts in without affecting public welfare, quality of life or safety.

For instance, this citywide sales tax hike is the brainchild of City Council President Herb Wesson, who makes $178,789 per year in salary, more than a member of the U.S. Congress. Given that he also gets a free car, a driver, excellent health care, pension benefits and other perks the average citizen wouldn't even get within spitting distance of, could he and the other Council members manage to struggle by with a 15% or 20% salary cut? Could they make do with a couple less staff members, or at least furlough them a couple of days each month? How many police officers would that keep on the job?

Instead of furloughing teachers, could we furlough or even eliminate some of the top heavy administrative positions in th escholl district? Could we privatize the L.A. Zoo, the convention center, or some of the other city-owned facilities? Could we eliminate some of the wasteful 'cultural affairs' and other frivolous and frequently duplicated city programs?

Needless to say, this isn't what's being discussed.Instead, the Fear is being shoved down people's throats 24-7. Recognize it now?

That's exactly the sort of protection racket President Obama is running now. It's the same old dishonest political ploy, just targeted towards a bigger audience. Rather than cut spending on wasteful government programs, he's deliberately taking it out on border patrol agents,social welfare programs for people who really need them, Pentagon and Defense Department employees, and members of the active duty military...and blaming the GOP House members for a scenario he engineered!

How many of these people could avoid being thrown out of the service or 'furloughed' for what it cost the country for the separate vacations the president and his wife just took? Would it have been better to spend that money elsewhere rather than on the President's lavish golf weekend and the First Lady's skiing jaunt at an exclusive Aspen Resort?

Oh yes, I forgot. They're the defenders of the middle class.

The reality is that the sequester is barely a slow down in out of control spending. We borrow that much every 28 days.

Federal spending has gone from a $2 trillion budget in 2002 to a $3.5 trillion budget in 2012, and there's no sign of a slowdown...not with this president. He's run up over $6 trillion in new debt. Any wonder that it's been almost four years since the Democrat run Senate has passed a budget?

That's the Sequestration Blues, folks. We've got a hard driven' free spending big legged guv'mint hellhound on our trail that eats money, and the harder we work, the faster our money goes and the more we go under.

Muddy, Memphis Slim, Willie Dixon or Robert Johnson could have made a song out of it.

Soccer Dad: "How I learned To Stop Worrying And Love The Sequester"

My pal David Gerstman, AKA Soccer Dad has a new gig blogging at the esteemed site Le·gal In·sur·rec·tion, and his opening salvo there is out today. Here's a slice:


A recent Washington Post editorial, The blame game over sequestration concludes:

Meanwhile, Mr. Obama seems content to warn of dire cutbacks in everything from naval operations to firefighters and to accuse the GOP of risking them to protect the wealthy. The Republicans denounce the sequester as Mr. Obama’s brainchild (though they accepted it as part of a 2011 budget deal) and say they won’t vote for any more tax increases. Both sides are obviously playing a political blame game, which must give way to serious bargaining soon — or the country will be the loser.

Yesterday Washington Post op-ed columnist Ruth Marcus wrote Republicans rewrite history on the sequester:

The tax debate is now closed,” House Speaker John Boehner proclaimed in The Wall Street Journal.

But why? The deal that Boehner asserts closed the tax debate involved less revenue than the $800 billion he was willing to ante up as part of the debt-ceiling negotiations in 2011. It involved less revenue than the $1 trillion he was offering last December in the cliff talks. By way of comparison, the original Simpson-Bowles plan called for more than $2 trillion in new revenue.
…
The Republican argument — we gave on taxes, now it’s time for spending cuts — also ignores the full history of spending cuts. The debt-ceiling deal — the one that created the supercommittee and sequester — also locked in $917 billion in spending cuts.

There’s one little detail that both accounts leave out. A previous deal was reached in 2011. Earlier this week John Boehner wrote in the Wall Street Journal:

During the summer of 2011, as Washington worked toward a plan to reduce the deficit to allow for an increase in the federal debt limit, President Obama and I very nearly came to a historic agreement. Unfortunately our deal fell apart at the last minute when the president demanded an extra $400 billion in new tax revenue—50% more than we had shaken hands on just days before.

It was a disappointing decision by the president, but with just days until a breach of the debt limit, a solution was still required—and fast. I immediately got together with Senate leaders Harry Reid and Mitch McConnell to forge a bipartisan congressional plan. It would be called the Budget Control Act.

The plan called for immediate caps on discretionary spending (to save $917 billion) and the creation of a special House-Senate “super committee” to find an additional $1.2 trillion in savings. The deal also included a simple but powerful mechanism to ensure that the committee met its deficit-reduction target: If it didn’t, the debt limit would not be increased again in a few months.

Boehner added that sequestration was more or less forced onto Congress by the President as part of a mechanism to avoid another debt ceiling fight prior to his re-election campaign. What’s important here is that it was the President who scuttled an earlier deal. Neither the Washington Post nor Ruth Marcus acknowledge this. Boehner isn’t making this up.

Read the rest here.

Greece, Italy, Portugal, Ireland Who? EU Gifts Egypt's Islamist Regime $6.5 Billion In Grants

Believe or not, fiscal crisis or not, the EU is itching to fund the Islamist government in Egypt:

European Council President Herman Van Rompuy, visiting Cairo, said on Sunday the European Union and other financial institutions had offered Egypt over 5 billion euros to support Egypt's democratic transition.

"The European Union and associated financial institutions have offered an amount of more than 5 billion euros, or more than $6.5 bln, in grants, concessional loans and loans for a period of 2012 and 2013 to support Egypt's democratic transition," Rompuy told reporters

Well, I'm sure that makes the Greeks, Italians, Irish, Spaniards and Portuguese feel all warm and cozy inside...as well as the citizens of the other EU countries now suffering under harsh austerity budgets.

Unbelievable.

The Media Isn't Talking, But Europe Continues To Implode Economically

 

The media hasn't been talking much about the European financial crisis, and is giving the impression that all's well. It isn't.

The ever prolific Tyler Durden over at Zero Hedge has a must read piece on the subject...must read because it's a red flag alert as to where America is headed if we continue on the path we're on:

The economic situation in Europe is far worse than it was a year ago, and it is going to continue to get worse as austerity continues to take a huge toll on the economies of the eurozone.

It would be hard to understate how bad things have gotten – particularly in southern Europe. The truth is that most of southern Europe is experiencing a full-blown economic depression right now. Sadly, most Americans are paying very little attention to what is going on across the Atlantic. But they should be watching, because this is what happens when nations accumulate too much debt. The United States has the biggest debt burden of all, and eventually what is happening over in Spain, France, Italy, Portugal and Greece is going to happen over here as well.

The following are 20 facts about the collapse of Europe that everyone should know...

#1 10 Months: Manufacturing activity in both France and Germany has contracted for 10 months in a row.

#2 11.8 Percent: The unemployment rate in the eurozone has now risen to 11.8 percent – a brand new all-time high.

#3 17 Months: In November, Italy experienced the sharpest decline in retail sales that it had experienced in 17 months.

#4 20 Months: Manufacturing activity in Spain has contracted for 20 months in a row.

#5 20 Percent: It is estimated that bad loans now make up approximately 20 percent of all domestic loans in the Greek banking system at this point.

#6 22 Percent: A whopping 22 percent of the entire population of Ireland lives in jobless households.

#7 26 Percent: The unemployment rate in Greece is now 26 percent. A year ago it was only 18.9 percent.

#8 26.6 Percent: The unemployment rate in Spain has risen to an astounding 26.6 percent.

#9 27.0 Percent: The unemployment rate for workers under the age of 25 in Cyprus. Back in 2008, this number was well below 10 percent.

#10 28 Percent: Sales of French-made vehicles in November were down 28 percent compared to a year earlier.

#11 36 Percent: Today, the poverty rate in Greece is 36 percent. Back in 2009 it was only about 20 percent.

#12 37.1 Percent: The unemployment rate for workers under the age of 25 in Italy – a brand new all-time high.

#13 44 Percent: An astounding 44 percent of the entire population of Bulgaria is facing “severe material deprivation”.

#14 56.5 Percent: The unemployment rate for workers under the age of 25 in Spain – a brand new all-time high.

#15 57.6 Percent: The unemployment rate for workers under the age of 25 in Greece – a brand new all-time high.

The problems with the entire EU project stemmed from a number of really bad ideas.

The idea that you could cram people from very diverse cultures into a common financial union was flawed from the start, as was the idea that you can have a welfare society and an immigration society at the same time. As America is also starting to find out, you can have one or the other, but not both for very obvious reasons.

Another problem with a socialist nanny state nirvana that ultimately dooms it is the fact that people don't have children. After all, if you're essentially secular or even agnostic and your entire society is focused on cradle to grave management of all your affairs, children really just become a drain on your own hedonistic lifestyle, so why bother? In that kind of society, there's no point unless you love being a parent for its own sake. Certainly you likely won't have the pleasure of seeing them grow up to attain more than you did in life.

Lest you think this is strictly a European problem, keep in mind that one of the hallmarks of the age of Obama is a sharply lowered U.S. birth rate,coupled with an abortion rate of 337,000 last year by Planned Parenthood alone - about one every 94 seconds.

The European leftist elite figured that Muslim immigration would pick up the slack and pay for the party but as it turned out most of those immigrants ended up costing more in social welfare benefits than they provided in tax revenues. And the culture they brought with them involved incurring a number of uncomfortable and costly side effects as well.

The Europeans, especially countries in southern Europe then tried to finesse the gap between what they were spending and what was coming in by simply running huge deficits, with the obvious end results.

The sheer misery many of the people in Europe are suffering today amounts to more than just mere numbers and will effect them deeply for a long time to come. But they have one advantage over us.

Europe still has NATO and an American commitment to defend them - for now.Since the beginning of the Cold War, they have been able to avoid spending much on defending themselves because America cheerfully picked up the bill, not that we got much gratitude for it.

If America continues along the path we're headed on, we will eventually experience what Europe is going through now..except there's no one to farm out America's defense to.

Meltdown - Boehner's 'Plan B' Implodes As Conservatives Say No

In spite of Majority Leader Reid essentially flipping him the middle digit yesterday, Republican Speaker John Boehner still didn't get the message.

He insisted on getting his 'Plan B' passed by the House, a rehash of former Democrat Speaker Nancy Pelosi's plan from last May - tax increases on gross incomes of $1 million and up, no mention of spending or the debt ceiling.

His idea was that this was somehow going to force President Obama and the Democrats to deal.

But to his surprise, the Republican caucus refused to go along:

At a quarter to 8 p.m. on Thursday night, House Republicans gathered in the Capitol basement for an urgent, closed-door conference meeting. The scene was hushed and confused. Instead of huddling in a windowless room, members thought they’d spend the evening on the House floor, voting on “Plan B,” Speaker John Boehner’s fiscal-cliff proposal. But as they took their seats and looked at Boehner’s face, the reason for the gathering became clear: The speaker didn’t have the votes. The whipping was over. “Plan B” was dead.

Boehner’s speech to the group was short and curt: He said his plan didn’t have enough support, and that the House would adjourn until after Christmas, perhaps even later. But it was Boehner’s tone and body language that caught most Republicans off guard. The speaker looked defeated, unhappy, and exhausted after hours of wrangling. He didn’t want to fight. There was no name-calling. As a devout Roman Catholic, Boehner wanted to pray. “God grant me the serenity to accept the things I cannot change,” he told the crowd, according to attendees.

The Serenity Prayer is about all Boehner has left.

He and his friends in the GOP establishment have spent the last few weeks dissing the Tea party and conservatives in general, kicking members associated with those movements off committee seats, and threatening suspected dissidents with similar retaliation.

Did Boehner think that would go unnoticed? Is he really that clueless?

Plan B was a stunningly futile and bad idea anyway. Most of the GOP caucus obviously didn't like the idea of going home and explaining it to the constituents who elected them.

Harry Reid has said he's not going to consider any plan that comes out of the House and already sent the Senate home for Christmas, and the president is already preparing for his $4 million Hawaiian vacay at the taxpayer's expense, so even if it had passed it would have been meaningless.

And the Plan itself was ridiculous.

Boehner and anyone else that thinks like him need to get a clue - President Obama and the Democrats have no intention of negotiating anything. Why should they?

Taxes are going to go up, there will be no meaningful spending cuts and our defense budget is going to be scaled back to pre WWI levels. That's what this president and the Democrats wanted all along, and they'll get it, either by doing nothing and letting sequestration take effect or by making Boehner and the House cave on everything they want. And the men who put them in this comfortable position were none other than Speaker John Boehner and Minority Leader Mitch McConnell.

He champions them now, but President Obama has constantly demonized the Bush tax cuts since 2008, something no Republican of any stature has had the stones to remark on publicly. They were supposed to sunset on January 1st, 2012, but they were extended for an additional year because of the ridiculous deal Boehner and McConnell made with the president last year in exchange for raising the debt ceiling and giving the president a higher credit card limit.They could have refused to increase the debt limit and forced the president to live within a 2.3 trillion dollar budget. Instead, they expected the president to negotiate with them in good faith a year down the road to pass meaningful spending cuts.

Now, how bad a deal that was is finally starting to become readily apparent to them.I use the word 'starting' advisedly, based on Boehner's recent antics.Having been screwed once, he's apparently anxious for a repeat performance.

Again some simple truth. This president and his minions were always going to raise taxes and strangle the defense budget. The Bush Era Tax Cuts are going up on people making more than $250K, and that number will be go south fairly quickly, using the AMT calculation, bogus stimulus programs, and more 'reforms' in Congress to $100,000 and lower. It's open season on the Kulaks, because elections do matter. And as the American people are going to discover, who is labelled as 'the rich is going to be a lot more elastic and inclusive then they imagined.

What Boehner could do, providing he gets someone to help him find his lost testicles is to use the power of the House to prevent the worst of the excesses. Congress holds the purse strings.There's nothing stopping them from simply refusing to raise the debt ceiling past its already obscene limits.If that involves shutting the government down, fine.

There's nothing stopping them from refusing to fund President Obama's agenda and making it clear that any spending he does will come with a price tag of spending cuts attached.There's nothing stopping them from addressing the country and explaining clearly and eloquently that this poresident has no intention of negotiasting anything in good faith, exactly why President Obama's fiscal policies are leading us to ruin, and why they oppose them. And there's nothing stopping them from attacking this president and his policies forcefully.

They're going to be demonized either way by the president and his media lackeys, but at least they're providing an honest, principled alternative, and one more and more people will understand as the Obama economy unravels.

Will they do it? I doubt it. Especially with John Boehner in charge.

But it needs to be done, and if the Republicans can't or won't, someone else will. Depend on it.

The Fiscal Cliff Farce - Time To Fire John Boehner, Seriously

 

I say this with regret, because I actually think that GOP House Speaker John Boehner is, in his own way, a dedicated public servant.

But it's apparent that he has no idea whom he's dealing with in negotiations with this president and the Democrats, and even less courage. It's like watching someone take a stroll in New York's Central Park at 2 AM and seeing him react with surprise and shock when he gets mugged and beaten to a bloody pulp.

In the latest from the saga of the fiscal cliff, Boehner advanced what he thought was at least a reasonable starting point - he took any talk of a debt ceiling limit off the table and essentially endorsed the exact proposal Democrat House Minority Leader Nancy Pelosi put out back in May of this year, for tax hikes on gross incomes over $1 million.

No sooner did he do that when the Democrats (laughing hysterically among themselves I'm sure) responded that it simply wasn't good enough, and that it was all just a 'political ploy' anyway by Pelosi.

The White House quickly agreed, saying it doesn't go far enough and wouldn't pass the Democrat majority Senate anyway.

The truth is that President Obama and the Democrats don't need or want a deal. The President has no problem with raising taxes on everyone or with the drastic sequestration cuts that will come mostly at the expense of the military.

Last year, when Minority Leader Senator Mitch McConnell made a last minute deal with President Obama to raise his credit card limit (AKA, the debt ceiling) and Boehner quickly endorsed it and rammed it through the House, I predicted this would happen.

The way this was set up it's a win-win for the president.

If a desperate Boehner completely caves, President Obama need only agree if he gets everything he wants with no concessions.At best, there will be some smoke and mirrors nonsense that means nothing to make the surrender compatible, like there was last year.

If there is no deal, the president gets the tax hikes and cuts in the defense budget he wants anyway, and will just sing the same old song about 'obstructionist Republicans, trying to protect the wealthy' while his media lackeys sing backup.That's what he's holding over Boehner's head and why Boehner is behaving so cravenly trying to stave off the inevitable.

The only way to deal with this kind of blackmail is for the Republicans to go public. It should have happened last year. They need to find someone ( NOT Boehner)to speak to the nation, inform them simply and directly of exactly why the president's policies are leading the country to fiscal ruin. And explain that since President Obama is unwilling to negotiate in good faith, the Republicans are going to let him do what he wants, but that every Republican legislator will vote 'present' in protest.

It would then become Obama's economy and Obama's policies, with no Republican fingerprints on it. When the house of cards collapses, President Obama will no longer have someone else to blame.

At this point, I think Rep. Boehner has to look back on his tenure as Speaker and simply admit that he failed, utterly. The decent thing for him to do would be to resign as Speaker, but with a little over a month left in his term the least he should do is announce that he will not be a candidate for Speaker in the next Congress, to give someone more able a chance to begin campaigning for the job.


Tiempo passado, y también los hombres.

Over The Cliff

In spite of President Obama's continued snow job about how he's 'open to negotiation' to avert the coming 'fiscal cliff' , the stark reality is that he and Harry Reid have no intention of doing anything unless they get everything they want ... a huge $1.6 trillion tax increase (and don't think its going tobe limited to 'the rich'), an additional demand for $50 billion in infrastructure spending and new powers to keep raising the credit card limit (AKA, the debt ceiling) ad infinitum.

Spending cuts? Are you joking?

So when President Obama complains that he's 'tired of negotiating with himself' he's simply lying. He's actually not negotiating at all, the way the term is normally used.The House republicans have put a modest tax increase on the table. They've gotten nothing in exchange form this president except 'not good enough'.

I never thought Mitch McConnell had much of a sense of humor, but he proved me wrong when he laughed out loud at when Treasury Secretary Tim Geithner outlined the administration proposal for averting the fiscal cliff...a hard line on huge tax increases and no real solid proposals for spending cuts.

I doubt they'll be any either. After all, this is the administration that couldn't even produce a budget in four years.

This president and his minions absolutely can't get their heads around spending cuts, because to do so would go against their entire worldview and ethos, that all things come from government. It's like asking a junkie with a ready supply of dope paid for by someone else to quit cold turkey.

Another reason it won't happen is that regardless of the dislocation to the economy and the misery it's going to cause for the barely affluent middle class the president claims to be so fond of, he sees it as good politics. Because he feels he can successfully blame the Republicans for it, and given the partisan media, it's not a bad gamble on his part.

This would be the time for Majority leader John Boehner - or somebody - to go public and make a decent speech to the American people explaining this in terms they can relate to and telling them exactly why the Republicans simply can't go along with this. Because it's unsustainable.

I rate the odds on him doing that successfully at maybe twenty percent.

If I were the majority leader, the main thing I would be concerned with is putting the results of whatever happens solely on the president. There's no 'negotiating' with him. Advance a proposal that's iron clad and calls for a fair measure of spending cuts. That way, I could at least say I tried one last time.

When President Obama turns it down, I'd just end it. Let him take the onus for what comes next.

The entire debt ceiling deal that went down the last time this happened was ridiculous anyway, as I said at the time. Basta. No Mas.

If the House Republicans have any leverage, let the president come to them. If not, let's go over that fiscal cliff...but let's make sure there are no Republican fingerprints on it by telling the American people in clear terms why it happened. At this point, deference and courtesy goes out the window.

Either that, or I'd even consider the idea of having every Republican in the House and Senate vote present along with a strong and uncompromising statement of disavowal warning the country exactly what's coming and letting President Obama have exactly what he wants.

Let the people whom voted for this president see what happens.