President Obama is steamed – I mean, he is really steamed this time. Last Friday he stood up and railed against his country’s enemies as a president hasn’t done since President Roosevelt denounced the enemies who had “suddenly and deliberately attacked” us at Pearl Harbor on December 7, 1941. FDR used the word “dastardly” to describe that attack, and he vowed that “…the American people, in their righteous might will win through to absolute victory.”
That was then, and this is now. On Friday, July 22, 2011, the “enemies” our president was denouncing were the American people – part of them, leastways. Mr. Obama railed at Republicans, who (he said) were blocking an increase in the federal borrowing limit to let the country pay its bills – including payments to Social Security recipients, military people, and interest on the national debt.
Mr. Obama singled out House Speaker John Boehner for special criticism, claiming that he had “walked away” from a “balanced” deal that provided for more budget “cuts” than Republicans had asked for. The deal called for$2 trillion in (future) cuts and $1.2 trillion in new “revenues” – i.e., additional taxes on “millionaires and billionaires” who, Mr. Obama says, “…have done extremely well, and can afford to do a little more.” Mr. Obama acted amazed, disappointed, astonished, and (finally) angry. I’m pretty sure I’ve never seen a president so visibly furious in a public appearance. He was clearly not amused.
Mr. Obama delicately omitted mentioning that the national debt already stands at $14,200 billion ($14.2 trillion), and is growing at a rate of $1,700 billion a year, which amounts to $194,064,000 an hour or $3,234,000 a minute. The omission really doesn’t matter, for most Americans cannot comprehend amounts like these. The numbers mean nothing. Unfortunately, the money is real enough. They and their descendants will never pay off that debt, but they will bear its cost in huge interest payments that will eventually dwarf the rest of what is hilariously called The Federal Budget. (I say “hilarious” because, clearly, no one in our governing bodies is doing anything that resembles budgeting.)
In other public comments, the president has appealed to the American people to pressure their congressmen to accept a “balanced” approach to raising the debt ceiling. The word “balanced” is Obama-speak for tax-increases. He wants new taxes, but Republicans will not accept them. They want only cuts in spending from current levels of $3,700 billion a year.
Amidst the blizzard of gigantic numbers it’s useful to realize that politicians are talking “apples and oranges” when they speak of cuts/revenues vs. the annual budget. As noted, the federal budget currently stands at $3,700 billion ($3.7 trillion) per year. But when senators, representatives and the president speak of $2 trillion in cuts, they are speaking of cumulative cuts over a 10-year period. The numbers look big, but in reality this amount to only a $200 billion cut in each of those ten years. $200 billion is huge money, of course, but hardly a dent in $3,700,000,000,000 annual expenditures. In fact, it’s a cut of only 5.4%. This mixing of 10 years and one year is so confusing that even reporters who should know probably don’t truly grasp it. Sometimes I wonder if congress-people even understand it. Putting everything on the same scale would mean placing $2 trillion in cuts in the context of total 10-year federal expenditures of at least $37 trillion. (I can sense readers’ eyes glazing over as I write this.)
To hear or read accounts in the Mainstream Media, one might conclude that Mr. Obama is running this game and is, in fact, winning it. But one would be wrong. Republicans are hanging tough because they sense that the public is behind them. Little by tortuous little, Mr. Obama and the Democrats have retreated from positions they stoutly demanded at earlier times. In April 2011, the president said he wanted a “clean” debt-ceiling increase – i.e., one including no budget cuts. He pressed for additional “revenues” – i.e., tax-increases – and he insisted on a debt-ceiling increase to carry into 2013. All of these requirements have now been abandoned, save the 2013 date. Mr. Obama is still fighting like a tiger for a debt-ceiling extension large enough to carry him past the 2012 elections. He has nailed himself to the mast on this. He must have it, for he knows it will be political death for him to renew the public’s awareness of the gigantic debt during the 2012 campaign.
Mr. Obama speaks loftily of Americans staying true to their principles and keeping faith with their vision of caring for the least fortunate, sickest and oldest among us. He admits that we need to reform federal expenditures, but offers no specifics for where he would cut back our stupendous level of spending. So far, he has only denounced actual budget plans put forth by Republicans, and proposed new taxes on “millionaires and billionaires” whose entire incomes could not wipe out the deficits we are running. Mr. Obama has no real plan of his own. He is an “empty suit” in all of this. His words are “…full of sound and fury, signifying nothing.” Americans are catching onto the fact that all the president cares about is getting the debt ceiling raised high enough so we won’t have to hear about debt, deficits or budgets again, during the re-election campaign.
Treasury Secretary Tim Geitner has set August 2nd as our turn-into-a-pumpkin date for federal borrowing. He says no more money can be borrowed to fund federal operations and pay obligations after that date. I have no reason to doubt his calculations. If anyone knows, he should. But the government will not exactly be out of money on August 2nd. Revenues continue to stream into the treasury every day from taxes paid – close to $8 billion per day of a typical month. Some of that revenue comes from payroll taxes (i.e., FICA taxes), in more than enough quantity to pay Social Security benefits (Mr. Obama’s ominous warnings notwithstanding). There will also be plenty of cash flow to pay the interest on our national debt (approx. $25 billion/month). Pay and provender for our military forces can also be easily covered. Beyond those items, however, funds will run thin, and many other federal obligations will go unpaid.
President Obama and many in his party claim that we must keep fiscal order by raising the debt ceiling before August 2nd. They say that the Tea Party is too dumb to understand the “catastrophe” that will result from even a partial shutdown of federal services. They have a point about the effect of a shutdown. Without a doubt, it would be extremely disruptive to the country. “Catastrophic?” I don’t know.
But millions of ordinary Americans – Tea Partiers or not – understand that we cannot continue on our current fiscal path. Whether we raise the debt ceiling or not, our boat is headed over the falls, absent some action to erase the huge gap between federal expenditures and revenues. We must cut or pay up. It is an extraordinarily clear choice between two visions for the country and our children’s future. If ordinary Americans didn’t see it before, I hope they see it now: there is nobody else to pay the bill.
You can get steamed about this; you can stomp around and kick things over; you can shout yourself hoarse. Yet the fact remains that we have to choose, and we have to do it now. Despite our many mistakes and misjudgments, I still have faith in the American people. I believe we shall do the right thing.
“God bless us all, every one.”