The Standard and Poor’s (S&P) credit rating service downgraded the U.S. credit for the first time in our history, saying: “political brinkmanship” in the debate over the debt made the U.S. government’s ability to manage its finances “less stable, less effective and less predictable.” They said that the debt ceiling agreement “Didn’t do enough to reduce the federal deficit.”
Months ago, S&P basically warned four trillion in cuts, or else…So, Obama opened with a “grand bargain” of four trillion in cuts. He offered no specifics in the way of cuts. He just said, how about we have four trillion in cuts. He offered no plan. He just said it. It’s almost as if he wants to say things to later say that he said things, without doing anything…voting present, in other words, with a symbolic trail. At this point, even the most ardent Obama supporters are now starting to recognize Obama’s “watch what I say, not what I do” method of governance.
Where was Obama’s mythical 4 trillion going to come from? The 2010 fiscal year lists the defense budget at around 700 billion, and at most he could get about 140 billion in “revenue increases” or raising taxes on the rich, so where was this four trillion going to come from in the mythical Obama plan.
To be more specific, if we taxed millionaires at say a 70% rate—which even Democrats appear unlikely to do—we would generate less than 10% of the annual deficit. According to 2010 projections, we spent 1.47 trillion more than what we had, and if we taxed at a rate of say 50%, 60%, 70% on incomes of $500,000, $5 million, and $10 million respectively we would generate about $133 billion. That’s not even ten percent of the deficit caused by our spending over revenues received. Another problem with relying on taxes from the rich is that the rich actually have volatile incomes that are dependent on the stock market. Removing the Bush era tax cuts, and going back to the Clinton era tax cuts, would cause the market to go down and result in a diminishment in wealth among the very wealthy. At that point, the federal government would accrue even less in the form of federal income taxes from the rich than the numbers listed above.
Allowing the Bush era tax cuts to expire would also ostensibly cause instability in the economy, as Obama himself suggested in December 2010. The rich would start hiding their wealth even more than they do now, and the “revenues” would be even further lessened at that point. It’s not logical, in other words, to pin the hopes of balancing the budget and lessening the deficit on the backs of “rich” Americans. The budget deficit is not, as much as Democrats and Obama wish it to be, based on tax cuts. Repeating this lie often enough may convince Americans to take a certain course of action, but it will not make it true, and this would eventually come to the surface if we raised taxes on the rich.
What the “raising revenues” crowd wants, other than fulfillment of the tax and spend charter, is to spread the blame about. Democrats do not want 100% of the blame, and they shouldn’t get 100% of the blame, but they have controlled the purse strings on this government for four of the last five years. They deserve a lion’s share of the blame.
In the debt crisis debate, Tea Party Congressman called for more spending cuts. Boehner, and the House of Representatives, listened, and they passed two different plans to reduce spending. Neither bill was brought to the Senate floor for a vote. The Tea Party Congressman even voted against the eventual compromise with the idea that there weren’t enough cuts. Yet, S&P’s saw fit to call the Republicans to task for their stubborn refusal to raise taxes on the rich. One has to wonder why Republicans were mentioned so often in the S&P report when they control one half of one third of the federal government. Perhaps it has something to do the “furious back and forth debate between the Obama administration and the S&P”. Perhaps the administration fought tooth and nail to try to convince the S&P to avoid the downgrade. In doing so, they were obviously not successful. Okay, the administration officials probably said, if you’re going to downgrade, you should at least be bipartisan in your report.
The Tea Party Congressmen did their best to bring the spending down, but in the end they didn’t have the numbers. For these efforts, they were called “Trolls,” by John McCain, “Terrorists,” by Joe Biden and all of the media types that picked up those talking points. Other talking points included notices that Obama allies should call Tea Party members “hostage takers”, or that they were “taking the government hostage,” and then we had Harry Reid’s Tea Party Tourette style tics such as Tea Party members are trying to “Bring the Gov’ment down,” he said their ideas are “A Bunch of Garbage,” and he found them “Very, very disconcerting.” He then attempted to pile on saying, “Americans don’t care about the Tea Party.” Former presidential candidate and Senator John Kerry insisted that Tea Party members should not be given voice by media outlets, and then we had all of the things that came out of Nancy Pelosi’s plastic surgery.
The thing of it is, if it weren’t for Nancy Pelosi, and her sessions of Congress, and Harry Reid, and Obama and John Kerry, the Tea Party probably would’ve never formed. If it weren’t for the out of control spending that began in 2006, the S&P probably wouldn’t have downgraded us.
Some would tell you that the Tea Party’s formation was based on unfounded fear mongering. Yet, when talking heads level this charge of “fear mongering” they never question the source of it. They simply level ad hominem attacks such as racist, because the president happens to be of another race, without seeking the true reason behind such a formation.
If it was “fear mongering” as the media suggests when it came to the formation of the Tea Party, the question should be asked why was it so successful this time? How many attempts have been made to form such a groundswell, a grass roots movement based upon charges few bought into? How many street corner screamers have there been in the short history of the U.S. that were laughed off as wackos by many Americans because they just weren’t credible. Why did it work this time? I’ve been to Tea Party meetings, and I can tell you that of the ones I’ve talked to 99% of them are level headed. How could so many people, from so many walks of life, buy into the Tea Party’s charges if they were based on, as Kerry says, “absolutely absurd notions”? Now that the S&P has validated the Tea Party’s charges, Americans who hate Tea Party members have to objectively question everything they’ve heard from the media thus far.
In the end, the greater problem is not the S&P downgrade, it is the spending, and the deficit, that needs to be addressed. It’s the source of them downgrade, not the downgrade. Fix the source, and you fix the grade. Even with the administration’s success in getting S&P to distribute blame to Republicans, it is the leader of the country that receives all of the accolades when things are good and all of the blame when things are bad. And if anyone thinks this downgrade will put a much needed scare in Obama’s underwear, please read my column: Will Obama Change his Mind?