Clearing up some Misconceptions re: Debt Ceiling

Did a bit of a rant about this yesterday.  The video is below.

Two main points in around 7 minutes (with around 12 jokes) is too-long-didn’t-watch for ya…

a). The U.S. already reached the debt limit back on May 16th.  Aug 2nd is when we run out of trick to make it look like we didn’t.

b). The “debt limit” is not the same as “the debt”.  Nor or either of them like your family budget, unless there are laws out there prohibiting your family from having as much debt as you do income (our country currently does not, but it does have an artificial limit (not tied to inflation) on how much we can borrow.)

We also have assets worth several times our country’s annual income, which is about $14.12 trillion/yr (2009).    Note: that is the country’s income en total.  The government pulled in about $2.1T/yr, and spent about $3.1T/yr in 2009.

This was Obama’s first year.  In 2008, government revenue was $2.6T and spending was $2.9T.   Did you notice that $500,000,000,000 ($.5T) dropoff in government revenue from 2008 to 2009?  That’s what we call a recession.  Except it hits government revenue waaaaay harder than the economy as a whole.   The Economy as a whole was in a recession, and dropped by $250,000,000,000 ($.25T) from 2008 to 2009.

This is why it was called “The Great Recession”.  Over 250 Billion dollars…gone.   And it kept going into 2010.   We won’t have the final 2010 numbers for a bit yet, but before we started to see growth near the end of last year, but it was really rough.     The thing about losing GPD growth, and why losing $.25T in GPD led to losing $.5T (double) in tax revenue, is that we only tax profits.   If a business loses money, it pays no taxes.  If you lose your job, you pay no income taxes (yes, 9.2%…at least…of that oft-and-wrong-cited 47%-who-pay-no-taxes are the unemployed).

So we get a massive drop off in revenue, and huge deficits.  They come pretty naturally with a recession…ESPECIALLY, if you were already running huge deficits to pay for a couple wars, expanded medical coverage (Med Part D), and tax cuts.   Which brings us to this legislative fiction known as the debt limit.

It has to be raised.   We’ve known for some time it has to be raised.   This has been known, definitively, since December when the President gave in to the hostage takers the first time.

We can deal with the debt much, much easier after the recovery.   Recall..cutting government spending = cutting government jobs = higher unemployment.  If we try to balance this whole thing without *any* new debt, and just cut off a major sector of our economy, and only pay the interest on our debt, we are well and truly fucked.   Which is what led to this rant below.

I think we have less than a week for a deal.   And a sane deal, at that.

Dallas just got dumber, fatter, and whiter

The X List: 15 reasons why Glenn Beck will love Dallas | | Dallas/Fort Worth

Reason #3: With the highest rate of violent crime, divorce, obesity and megachurches, Texas is already halfway to both the Inevitable Apocalypse and a Mormon’s idea of Heaven.

Reason #15 is worth reading the whole thing. Dulles…who would have guessed?

Eric Cantor Pushes For Title of Biggest Douchebag Ever

i think he’s pretty close at this point.

Recall, this is the guy that walked out of negotiations after Democrats had the audacity to propose altering the depreciation schedule on corporate jets.

Now he has spotted another cluster of spending that is waaay more wasteful than that, and the oil subsidies, and pretty much everything else…

As Monday’s White House budget talks got down to the nitty-gritty, Eric Cantor proposed a series of spending cuts, one of them aimed squarely at college students.

The House majority leader, who did most of the talking for the Republican side, said those taking out student loans should start paying interest right away, rather than being able to defer payments until after graduation. It is a big-ticket item that would save $40 billion over 10 years.

[full story]

So, to a douchebag like Eric Cantor, that makes perfect sense.  Anyone who has to take out student loans *obviously* already has the money to immediately pay them back without first using them to invest in an education.

He’s put up a few other absolutely idiotic suggestions the last few days.   Republicans, if you want to know why everyone thinks you’re a party filled with selfish, lying douchebags, screwing over everyone to protect that wealthy 1%, look in the mirror that is Eric Cantor.

Republicans are resisting not just tax increases but significant cuts in defense spending, the sources say.

So…even the entire “cut spending” b.s. that the Republicans had “on the table” wasn’t actually about Republican spending on the table.

Obama returned to this theme in the talks, saying everyone is being asked to sacrifice except rich people. The Republicans repeated their belief that any tax increase  would damage the fragile economy.

This really is such a load of crap.  We have two economies right now.   The recession one, where 90% of us live with 9.2% unemployment, and the real economy one, where the recession has officially ended, corporate profits have never been higher, and the wealthy are doing just fine.

So the Republicans concern-troll the economy and taxes, then turn around and complain about the unemployment numbers , which were brought on by firing government employees, and the debt limit, brought on by cutting more taxes, and used the whole situation an an excuse to cut more taxes, more employees, and more services.

The sickest thing about the whole deal…the entire play has come out of a context and an economy where the wealth has never been more concentrated that it is now.   And Cantor, and the douchebag parade, want to consolidate it further.

“Concentrate the wealth” is pretty much their rallying cry.  And it’s working, the wealth is being concentrated.  This sucks for 99% of us (those peons that have to borrow money to go to college), but its great for the douchebags on the payroll of the 1%.  Douchebags like Eric cantor.