Today an interesting thing happened — the President of the United States of America delivered an excellent speech about our nation’s struggle to pay our debt. On face, that is not too unusual an occurrence. What is interesting is that, exactly 3 minutes after that speech, the Speaker of the US House of Representatives, John Boehner delivered a rebuttal speech from his ceremonial office in the Capital Building. Here is what I got from these two antithetical speeches — we are doomed to fail, just in different ways.
Talk about a unique way to get something done in Washington…talking about it (yes, sarcasm is a bit more complicated to communicate through a blog post). Let’s start with a few facts and some background as to the problem:
1. The United States of America is in Debt.
2. The United States of America is in a LOT of Debt.
3. If congress does not raise the debt ceiling (the maximum amount of debt the US can take on), we will have a major reduction in available cash flow to pay for things.
4. If the US defaults on any debt service payment to others (including other countries), our credit rating will drop significantly and immediately.
5. If our country’s credit rating drops, lending costs will increase drastically, costing us more more money than (perhaps) simply raising the debt ceiling.
President Obama argued tonight that there is a stalemate with raising the debt ceiling, because the Republicans in congress want to cut spending and taxes. Clearly, cutting spending (appropriately) makes sense, but continuing to cut taxes for the wealthiest Americans seems a bit counter-intuitive (when you have debt problems in your home, you don’t think about taking a lower-paying job…do you?). Speaker Boehner argues in his separate speech that there isn’t any stalemate…the President just needs to sign a bill. Although I said earlier that sarcasm is complicated to communicate online, irony isn’t. Here is the irony: no stalemate…yet, a separate speech was necessary?
Here are some other very important facts, as reported by the New York Times:
“This graph shows the difference between budget projections and budget reality. In 2001, President George W. Bush inherited a surplus, with projections by the Congressional Budget Office for ever-increasing surpluses, assuming continuation of the good economy and President Bill Clinton’s policies. But every year starting in 2002, the budget fell into deficit. In January 2009, just before President Obama took office, the budget office projected a $1.2 trillion deficit for 2009 and deficits in subsequent years, based on continuing Mr. Bush’s policies and the effects of recession. Mr. Obama’s policies in 2009 and 2010, including the stimulus package, added to the deficits in those years but are largely temporary.” – New York Times
“The second graph shows that under Mr. Bush, tax cuts and war spending were the biggest policy drivers of the swing from projected surpluses to deficits from 2002 to 2009. Budget estimates that didn’t foresee the recessions in 2001 and in 2008 and 2009 also contributed to deficits. Mr. Obama’s policies, taken out to 2017, add to deficits, but not by nearly as much.” – New York Times
Clearly, the fact that the President of the United States felt the need to give the first presidential address exclusively on the debt ceiling indicates that we have some problems. Based on the reporting of the New York Times, we have some problems that go beyond what has happened over the course of the past few years. So, what are we left with?
Who is the blame for these issues? The President? No. Speaker Boehner? No. The Tea Party — YES! I believe that the major issue here is that we have a small, but very vocal, faction in the US congress that is simply putting any project that does not involve the complete demise of the federal government on hold. People…we are not living in the late 1700s. Today, federal spending and income is very nuanced. I say, most likely more nuanced than these new members of congress can ever understand. Honestly, I don’t think that our government is doomed because of spending limits and the debt ceiling. Instead, it is clear to me that our country is doomed because, as the President put it, the American spirit of compromise is dead. I sure hope we can revive it soon!
By the way, the President did mention in his speech that you should contact your member of congress to express your concern with this issue. Doing so is simple — just use the form available at this link. Let’s all tell our representatives that we are tired of partisan bickering. We are paying them good money to fix our problems and do it ethically. Maybe we should tell our representatives that spending trillions of dollars in defense funding is not a priority that we want anymore….just an idea.
[Update: 09:24pm PT] It seems that your e-mail messages have shut down the capital e-mail servers. If you are trying to send a message, don’t give up…but, you may need to try again in the morning.