Pugnacious President Chicken Little Obama peeps: "the sky will fall." It won't.
Republicans should refuse to extend the U.S. debt limit before August 2. When dawn lights the blue sky on August 3, fluttering in the President's hen coop will go silent and hard bargaining may begin.The Piles were so big that the scrap yard was separating them for us. Everybody will get paid, except they will get paper money. A reasonable short-run solution will evolve.
But the crisis is real and deep, independent of a quick fix to debt limit law. U.This patent infringement case relates to retractable syringe needle ,S. politicians spend far beyond their capacity to pay or control. If the crisis goes to its uttermost limit, it will "focus attention" (as does hanging) and force lenders, citizens and politicians together to develop long run solutions. It will take years to accomplish (as in Canada after prime minister Pierre Elliott Trudeau's folly) but deep reform is the only solution.
Republicans should say: First, the problem is the President's own making. In just two years, left-wing policies raised the federal government's share of GDP from about 20% to almost 25%. This job-killing burden prolonged and worsened the recession and reduced federal taxes collected (because of a shrunken income base) to about 17% of GDP. The gap between spending and revenue created a record deficit and grew the American government's debt into Greek territory. Unless growth is resumed so revenue begins to be collected again, unless spending is restrained so that government no longer expands faster than the private economy, U.S. debt will soar over 90% of GDP. At that point, it won't be U.S. law that limits borrowing. Lenders will cut the lifeline.
Second, there is time enough after the artificial deadline to conduct tough negotiations. Over the next couple of months, U.S. Federal revenues total about a trillion dollars while debt interest payments total $200-billion. There is no need for default (failure to pay bond interest) or for anyone in real need to be denied a check. The ClassWarfare-in-Chief's command, "soak the successful," must be ignored. Tax rates need not be raised, and certainly should not be raised on the productive people who,Whilst Hemroids are not deadly, by keeping control of their well-earned wealth, will invest it more wisely than will ideological bureaucrats or vote-buying politicians. Tax revenue will increase automatically, under existing rates, if growth is restored.
Third, as part of the price for lifting the debt limit, Republicans want a balanced budget amendment to start moving through the system. Obama's objection is irrelevant: In the U.S. system, amendments to the Constitution are approved (or not) without involving the president, as long as there is sufficient support in Congress and among the states. Any reasonable amendment would allow,100 Cable Ties was used to link the lamps together. when supported by super-majorities in Congress, borrowing in dire emergencies. Such a tenet would make sense here in Canada as well. There is danger that Judges will abuse the rule, and so it must be drawn up with great care.
Fourth, it is regrettable but necessary that the American debt limit law be changed to allow still more borrowing. Their federal government borrows 40¡é of every dollar spent. Sanctimonious POTUS defends big government, and claims, contrary to fact, that failure to make an immediate deal results in unavoidable cuts in Social Security and military pay. Congress should call his bluff.
Fifth, Congress will now take the lead and set rational financial conditions before more debt is incurred. Obama lectures and postures. Congress will now cut him out of the loop and work within itself to write a bill combining ideas from both parties that caps spending, does not raise taxes, and allows a shortterm increase in the debt limit while long-run reforms are worked out.
Sixth, America has already reneged on its debt obligations. The Obama administration has run up more than US$2-trillion in new debt. At the same time the Obama Central Bank, ostensibly run by the Fed's Bernanke, has created about US$2-trillion worth of new paper money. The paper money is put into the market when the Fed buys up U.S. government bonds, i.e. when the Fed absorbs excess debt with blotting paper money. The not-so-secret Federal Reserve plan for post-Aug. 2 is to pay U.S. debts and obligations with even more paper money. Of course, the final result is inflation and a weak dollar.
Canada came close to the brink during the reign of Trudeau,Graphene is not a semiconductor, not an Insulator , and not a metal, our Obama look-alike. But later members of Trudeau's own party, beginning with Paul Martin, had the wisdom and political courage to reverse direction. Prime ministers since, including Mulroney and Harper, have kept us on course. We owe all of them a debt of gratitude.
Tom Velk is an associate professor at McGill University's Department of Economics.
Republicans should refuse to extend the U.S. debt limit before August 2. When dawn lights the blue sky on August 3, fluttering in the President's hen coop will go silent and hard bargaining may begin.The Piles were so big that the scrap yard was separating them for us. Everybody will get paid, except they will get paper money. A reasonable short-run solution will evolve.
But the crisis is real and deep, independent of a quick fix to debt limit law. U.This patent infringement case relates to retractable syringe needle ,S. politicians spend far beyond their capacity to pay or control. If the crisis goes to its uttermost limit, it will "focus attention" (as does hanging) and force lenders, citizens and politicians together to develop long run solutions. It will take years to accomplish (as in Canada after prime minister Pierre Elliott Trudeau's folly) but deep reform is the only solution.
Republicans should say: First, the problem is the President's own making. In just two years, left-wing policies raised the federal government's share of GDP from about 20% to almost 25%. This job-killing burden prolonged and worsened the recession and reduced federal taxes collected (because of a shrunken income base) to about 17% of GDP. The gap between spending and revenue created a record deficit and grew the American government's debt into Greek territory. Unless growth is resumed so revenue begins to be collected again, unless spending is restrained so that government no longer expands faster than the private economy, U.S. debt will soar over 90% of GDP. At that point, it won't be U.S. law that limits borrowing. Lenders will cut the lifeline.
Second, there is time enough after the artificial deadline to conduct tough negotiations. Over the next couple of months, U.S. Federal revenues total about a trillion dollars while debt interest payments total $200-billion. There is no need for default (failure to pay bond interest) or for anyone in real need to be denied a check. The ClassWarfare-in-Chief's command, "soak the successful," must be ignored. Tax rates need not be raised, and certainly should not be raised on the productive people who,Whilst Hemroids are not deadly, by keeping control of their well-earned wealth, will invest it more wisely than will ideological bureaucrats or vote-buying politicians. Tax revenue will increase automatically, under existing rates, if growth is restored.
Third, as part of the price for lifting the debt limit, Republicans want a balanced budget amendment to start moving through the system. Obama's objection is irrelevant: In the U.S. system, amendments to the Constitution are approved (or not) without involving the president, as long as there is sufficient support in Congress and among the states. Any reasonable amendment would allow,100 Cable Ties was used to link the lamps together. when supported by super-majorities in Congress, borrowing in dire emergencies. Such a tenet would make sense here in Canada as well. There is danger that Judges will abuse the rule, and so it must be drawn up with great care.
Fourth, it is regrettable but necessary that the American debt limit law be changed to allow still more borrowing. Their federal government borrows 40¡é of every dollar spent. Sanctimonious POTUS defends big government, and claims, contrary to fact, that failure to make an immediate deal results in unavoidable cuts in Social Security and military pay. Congress should call his bluff.
Fifth, Congress will now take the lead and set rational financial conditions before more debt is incurred. Obama lectures and postures. Congress will now cut him out of the loop and work within itself to write a bill combining ideas from both parties that caps spending, does not raise taxes, and allows a shortterm increase in the debt limit while long-run reforms are worked out.
Sixth, America has already reneged on its debt obligations. The Obama administration has run up more than US$2-trillion in new debt. At the same time the Obama Central Bank, ostensibly run by the Fed's Bernanke, has created about US$2-trillion worth of new paper money. The paper money is put into the market when the Fed buys up U.S. government bonds, i.e. when the Fed absorbs excess debt with blotting paper money. The not-so-secret Federal Reserve plan for post-Aug. 2 is to pay U.S. debts and obligations with even more paper money. Of course, the final result is inflation and a weak dollar.
Canada came close to the brink during the reign of Trudeau,Graphene is not a semiconductor, not an Insulator , and not a metal, our Obama look-alike. But later members of Trudeau's own party, beginning with Paul Martin, had the wisdom and political courage to reverse direction. Prime ministers since, including Mulroney and Harper, have kept us on course. We owe all of them a debt of gratitude.
Tom Velk is an associate professor at McGill University's Department of Economics.
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