Monday, August 01, 2011

Iceberg ahead, Sir!
Steady as she goes, Helmsman.

Nancy Pelosi is being coy about her support for the Government bailout of the Government. Congressional Liberals are whinging about 'Satan Sandwiches.' The statist street is suggesting Obama has betrayed them - again. The Vice President called the tea party "terrorists." "Hostage takers," is the Progressive phrase of the day. If the hard left doesn't like it, it must be good, right? After all, the Wall Street Journal is calling the debt deal a 'big win' for the tea party, though continuing to criticize those who were elected for keeping their campaign promises.

It's a set up. All this angst is to reinforce the idea that the tea party philosophy is rigid and unreasonable. It is not rigid, it is principled. It is not the least unreasonable. Still, in the next round we're going to hear, "You terrorist cretins refused to compromise last time, and THIS TIME you're not getting your way."

Here's the terrible thing those moronic Hobbits wrought:

  • $9 trillion Baseline increase over ten years
  • $0.917 trillion spending reduction...
  • For a $8.083 trillion Baseline increase over ten years
  • Add to that a $1.5 trillion Budget Act Super Committee tax increase, (my prediction) and you get... a $9.583 baseline spending increase over ten years.
And that's if future Congresses don't go back on the promises of the current pirates, and the largest tax increase in American history is enacted by letting the Bush tax cuts expire.

Oh, and we get to have a fantasy vote on a Balanced Budget Amendment in the Senate.

Status quo on the debt trajectory. Size and scope of government unchanged. Summary: We avoid a liquidity crisis by increasing the ongoing solvency crisis.

Here are two examples of what the debt ceiling deal means will continue.


Graphs courtesy Zero Hedge.

You decide if that represents an immediate, existential threat to the United States.

4 comments:

Mitch said...

The reality of this is that the markets are pricing 5 year US Treasury CDSs around the same price as BBB corporate debt. So, the market is saying that they don't believe the US government will get their house in order and would feel more confident in quality corporate issuances. Corporate issuances are easier to figure out - as credit is based solely on ability to pay, why there is the political default issue for sovereign bonds.

Regardless of the rating agencies, the credit default swap market has downgraded US Treasuries - and nobody in government cares to pay attention.

Hershblogger said...

Excellent point, Mitch.

Jason Gillman said...

Cry.

And if you are going to borrow money, do it tomorrow BEFORE the president gets a chance to put this thing to a pen.

Congress FAIL

Debt is meant to be temporary.

Roug said...

And, as the economy continues to struggle due to this mind boggling reinforcement of both failed fiscal and monetary policies, the hobbits can be blamed in the next election because the great political victory it just achieved in the budget deal (according to the media and leftist pundits) failed to produce the vibrant economy it was precisely designed not to produce.

The GOP has been played again.

Hook. Line. Sinker.