Top Of My Head

Thoughts on everything from Politics to Video Games

Tag: national debt

Economics

Let’s discuss how to pay a debt.

  1. You earn revenue – that’s money coming in.
  2. You send your debtor a check for what you owe.
  3. Repeat steps 1 and 2 until debt is paid.

See how easy that is?

Now, here’s a little tip to make it even easier:  Don’t quit your job while still trying to pay your debt.  In other words, don’t lower your revenue, because if you lower your revenue, you will have a harder time meeting all of your obligations, including your debt repayment.

Let’s move this out to the government:

  1. Receive taxes.
  2. Send checks to debtors.
  3. Repeat steps 1 and 2 until all debts are paid.

To pay the debt off faster, cut spending.  To not pay it off at all, cut revenue.

That’s what the Republicans want to do, they want to cut our revenue when we can least afford to do so.  They are holding the debt ceiling hostage because they don’t want to raise the taxes on the richest people in our nation from 35% to 39.6%.  This isn’t going to raise your taxes or even my taxes.  I’ve all ready discussed in an earlier post what will happen if we default.

Tomorrow, I’m going to post the tax rates over the past ten years.  Remember, these aren’t rates on your GROSS salary, they’re on your NET.

 

Debt Ceiling Questions and Answers

What happens if it is not raised?

  • Our National Credit Rating is downgraded.
    • Costs Nation more to borrow money.
      • Sends tax revenue to pay interest, not government programs.  Bad for the economy, bad for taxpayers.
    • Harm world economy if US does not keep Triple – A rating.
  • Payments not made because the Country is out of money.
    • Social Security recipients, Military personnel and federal workers won’t be paid.
  • The Stock Market – US investments – could sink

When did the Debt Ceiling begin?

  •  “The statutory limit on federal debt began with the Second Liberty Bond Act of 1917.”1 This allowed the financing of WWI. Later, the debt ceiling was raised for the financing of WWII.

How many times has the debt ceiling been raised?

  • I couldn’t find how many times it has been raised since enacted, but I did find that it was raised 38 times in the last 30 years.

I found the most interesting paper at the Treasury.gov while I was researching this article.  I think it explains the debt ceiling and the truth much better than I could.  

Republicans

Republicans should be totally ashamed of themselves.  In the states where Republicans rule, the order of the day is attack public workers and cut funding for birth control or let’s all carry guns and hate gays.

In Congress, the order is let’s not deal with the President on the debt ceiling (or anything else for that matter).  They’ve learned that a failing Congress usually gets Republicans elected.  If they “do nothing”, they can blame President Obama.  Except this time, they’re wrong.  Failing to act can mean that the US will default on its loans.  This not only ruins our economy, but it can take down the rest of the world.  Think about it, Europe is panicking because Greece might default and Greece is only worth 2% of the European economy.  Can you imagine what would happen in the world if the US defaults?

Worse than that, President Obama has handed the Republicans nearly everything they want – including major cuts to Social Security and Medicare – and they want to take their football and go home.  They are playing politics with our futures and the futures of our children and they’re turning their backs on $3 trillion dollars in spending cuts.  $3 trillion.  And, all because they want to protect the richest people in the nation.  You know, the ones that have summer homes and take expensive vacations, while the rest of us are struggling to pay our mortgages.  The ones who can afford to take Paul Ryan out for dinner and order two bottles of $350.00 wine, while complaining that liberals don’t like rich people.

Even Warren Buffet thinks the rich don’t pay enough in taxes.  I’d like to take this opportunity to point out that the rich and wealthy are paying the lowest amount in Federal income taxes since the 1950’s and, yet, they aren’t hiring.  Imagine that.  The real problem in this country are companies that make huge profits and do not hire anyone, along with the ones that close American plants and open ones overseas.

Meanwhile, Republicans are attacking Planned Parenthood – God forbid a woman is able to buy birth control at a low price – and Presidential Candidates are signing pledges against individual rights.  Lincoln freed the slaves, but he would never get elected now if he supported marriage equality.  Roosevelt supported the protection of our national parks and resources, but Republicans would kick him out of the party.  Nixon supported clean air and water and created the EPA, but these Republicans of today consider it a hindrance to make sure we have clean air to breathe and good water to drink.  Even Reagan raised taxes – twice – but the Republicans of today have rich donors to their campaigns to support.

Republicans have a long and proud history of doing good in this nation, but this modern breed of them are a huge disgrace to the Republican past.

What happened to the Republican Party that supported individual rights?  Where did the reasonable Republicans go?  They certainly aren’t here.

Cantor’s Running

Eric Cantor has walked away from the Debt Ceiling talks. He doesn’t want to be in a position to actually admit that raising taxes must become a reality if we’re serious about paying off the National Debt.

Unfortunately for Cantor and the other Republicans, their grass roots base and their big business base are totally against tax raises. However; we can pay money we don’t have. Rehauling medicare and cutting social security and education outlays are NOT going to make us debt free.

Welcome to the real world.

Just like I can’t cut my hours and still pay my car loan, the goverment cannot cut taxes and pay off the debt. Our federal taxes are the lowest they’ve been in fifty years. Our regulations on businesses are the smallest they’ve been in forty years and, still our national debt grows and our jobless jumped 9,000 higher last month.

Cutting taxes – which is the big plan of the Republicans – isn’t going to build a strong economy so far.

Cantor needs to come back to the table and face the music.

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