Over the last several months we have seen continued battles over the debt. There have been possible government shutdowns, bailouts, proposed bailouts, calls for cutting spending, calls for higher taxes, a gang of 6, those who believe we have a revenue problem, those who believe we have a spending problem and a President who believes the best way OUT of the hole is to make the hole even DEEPER.
Obama wants to scare everyone into capitulation with liberal tax and spend ideologies and stonewalling while those who set our nation’s credit ratings seem set to sweep away our liberty in a tsunami of default.
What’s it all about?
Is it solvable?
Behind the facades, after politics have been stripped away, sans pundits and without a can to proverbially kick down some unnamed road…what’s it all about?
The national debt.
What exactly IS the national debt?
14.3 trillion dollars. We know this because we hear that figure every day. 14.3 trillion…14.3 trillion…14.3 trillion…on and on it goes but what IS it?
It is the money our nation OWES to creditors. Think of it as our nation’s car loan or our nation’s mortgage. Others hold the notes and our nation OWES them money.
14.3 trillion dollars to be somewhat exact. Why somewhat? Because, by the SECOND that number is GROWING. We don’t just owe on the principle…we owe interest.
Here’s another way to look at it.
Our government has now spent 14.3 trillion dollars (and growing) of YOUR money which YOU have YET to give them.
IT’S YOUR MONEY and YOU owe it so THEY can pay the mortgage.
Allow, for a moment, this to really sink in.
The government spends YOUR money. This 14.3 trillion dollars is NOT money they WANT to spend…it’s money they ALREADY SPENT. You can’t stop the government from spending it…IT’S GONE…SPENT…and what’s more…YOU OWE THAT 14.3 TRILLION DOLLARS TO THE GOVERNMENT because…when they decided to spend it on whatever they spent it on, they didn’t actually HAVE it so…they BORROWED it from lenders – and as lenders are often want to do, THEY WANT THEIR MONEY BACK…with interest.
Our government is a non-profit organization and they rely on “donations.” Liberals love to claim the money that is spent by the government is the government’s money when in reality it is NOT…it’s YOUR money and when they don’t have enough they go out to other countries and borrow it with a promise to pay it back…meaning…the government is promising that YOU will pay it back.
Okay now that we have that established, let’s look into something else we hear every day…the debt ceiling.
YOU have a debt ceiling. Go to your bank and ask how much YOU can borrow. They will tell you and whatever THAT number is…it IS…and that is YOUR debt ceiling. As a nation, we too have such a ceiling. It’s higher than your ceiling but it’s still a ceiling.
Honestly, that’s a really bad example.
YOUR ceiling is IT…it’s ALL you can borrow…PERIOD. If you have trouble understanding that, test the theory. Borrow every penny you can…don’t pay any of it back…and then go back to your bank and ask to borrow MORE…let me know how this works out for you.
Our nation on the other hand reaches their debt ceiling often; but unlike YOU, they just keep RAISING the ceiling. Hmmm…looks like we’re nearly out of borrowed money and our credit card is near the limit…RAISE THE LIMIT!!! Boy…that was close…LET’S GO SHOPPING!!!
Sure it’s overly simplified but that’s the point…simplifying it so that it becomes somewhat understandable right.
Our nation’s credit card it maxed out at 14.3 trillion dollars, we need more and the only way to do that is to raise the ceiling on our limit.
Obama is DEMANDING the debt ceiling be raised as in his words, “Raising the debt ceiling is a formality…it’s routine.” Ummm…okay…it has been that way pretty much forever but…we’ve never been THIS deep in the hole before, NEVER, and digging deeper despite what liberals think, is NOT the way to climb OUT of that hole. Now I suspect that, had Obama NOT run up more debt in 3 years that the first 40 or so Presidents combined…it may well have stayed a formality but that is no longer the case.
Obama is also DEMANDING that the debt ceiling be raised far enough as to not be needed again until 2013. There is a very good reason for this…the election is in 2012 and Obama doesn’t want to have to face this again before that election. Oh he didn’t say that but…there is no such things as coincidence in politics…we all know that. The average time from inception to the end of a raising of the debt ceiling is 7 months – yet Obama wants THIS one to last twice that long? And it’s not a political maneuver? Really?
On the republican side of reality…the stand is clear. Republicans ARE willing to RAISE the debt ceiling but…BUT…only if there are SPENDING cuts…REAL spending cuts that equal MORE dollars than the extended debt and NO…NO increase in taxes.
Liberals are spitting mad about this and for some reason believe they should have THEIR way despite the FACT that the American people felt quite differently last November when they voted INTO to office a freshman class of 87 Tea Party backed Republicans in the House. To accomplish this, or, maybe another way to view it…they voted OUT 87 liberals because the American people felt one of the most IMPORTANT things which needed doing was getting the NATIONAL DEBT and SPENDING under control and the liberals simply were NOT doing it.
While republicans in the House put forth a Cut, Cap and Balance bill calling for specific and deep spending cuts, a cap on the debt ceiling and a balanced budget amendment to the Constitution, the democrats in the Senate promptly squashed it not even allowing the bill to come up for a vote.
The gang of 6 put forth a nondescript idea which would include some spending cuts but nobody knows where and some extra revenue which would include some tax hikes mixed with the closure of some existing loopholes but that is something which seems certain to be rejected by the House. There is a “Plan B” from McConnell which would do something unclear but may or may not get through the House and Obama demanding MORE revenue in the 11th hour than a figure reportedly nearly almost sort of agreed to by negotiators on both sides.
Now we have dueling proposals. One by the Senate and another from the House. Each think THEY have the goods and with less than a week to go…both seem to want to stand pat. Obama has even hinted at taking a shot at changing the rules himself by using a highly questionable interpretation of the 14th Amendment. Call it a cross between ultimate arrogance and a diaper that needs changing.
Clearly, from the left, there has been and continues to be a great amount of oscillation, denunciation, abdication, fabrication, equivocation and just about any sort of ation you care to mention except ratification up to and including cerebral flatulation (which may or may not be an actual word) involved.
Something which is also clear is the fact that the republicans have put plan after plan after plan on paper, on the table and on the record while the democrats have put exactly…nada…zip…zilch…zero plans to paper and yet democrats still, for a completely unknown reason, continue to feel they are in control and should have the only say in how we proceed on the budget, the debt, spending and taxes.
As a nation, our credit rating is determined by a small select group. Standard & Poor and Moody’s are the key players who set our rating. Why exactly so much weight is put behind these agencies is questionable as they are the same agencies who gave AAA ratings to sub-prime mortgage companies shortly before the housing crash. Frankly, their score card is as shaky as congress’ when it comes to investment advice.
These quaky economic jello bowls are telling us that if congress doesn’t show definitive action to lower the national debt long term and stem the spending…long term…our country will lose it’s AAA credit rating. This means it will cost MORE for the nation to BORROW money and YOUR interest rates will rise if YOU borrow money. There is something of an upside though…if this happens and you wait to invest in CD’s, you’ll get a slightly higher return. Whoo hoo.
There is something else which could happen too. For the first time in our history, the United States could default meaning some of our creditors would not get paid – or at least, not get paid on time. It’s never happened before, and even before it’s all said and done, both sides are blaming the other for the award of shame. No matter how often Obama rehashes his blame game against George W. Bush, one FACT will stand out. Bush would not go down in history as being the first President to preside over a national default and Bush’s party would not be the historically dim bulbs who failed to pass a budget for more than 800 days.
Okay, let’s get back to that number.
14.3 trillion dollars.
It’s a VERY big number and a number in need of perspective.
We all know that 100 is a 1 with 2 zeros behind it. We know that. We know that a thousand is a 1 with 3 zeros behind it. A million is a 1 with 6 zeros behind it right? A Billion? That’s a 1 with 9 zeros behind it and a TRILLION…well…that would be a 1 with 12 zeros. Our national debt would then be a 14 with 12 zeros and added change behind it.
To be fair, that really doesn’t add the sort of perspective needed for us to clearly grasp the national debt so let’s try it again.
For the type of perspective we need we must deal in what we CAN conceive so let’s try a few things which of which we all can conceive.
Let’s start with 100 dollars. We all know what a 100 dollar bill looks like. In case you’ve never actually seen one…it’s exactly the same size as a 1 dollar bill except it has 2 zeros behind the one…see above. Okay…we‘ve all seem a semi truck right? We know how big a semi is. How about a football field? For those who may be reading this from a part of the world where football (American football) is unknown…think…football (soccer to an American) and conceive of THAT field. Now, here’s something not everyone has seen but something of which I believe we CAN conceive, if we try. The Statue of Liberty. I have never seen it in person but I have a fair idea of its size and I suspect whether or not YOU’VE been to New York and gazed upon the iconic Lady, you too have a reasonable concept of her in mind.
With all of these things firmly entrenched in your head…start stacking 100 dollar bills…one atop the other in neat orderly stacks…keep stacking…this will take a while…don’t forget to break for meals and be sure you have plenty of water…pray for no wind…keep stacking…while stacking remember that the national debt is money the government has ALREADY spent and that YOU now owe to lenders AND that the government wants you to owe MORE and MORE and MORE because Obama believes that RAISING (are you still stacking?) that debt ceiling is a mere formality…Stack, Stack, Stack…and when you’re done…THIS is what 14.3 billion dollars looks like!!!
That’s a big pile and the liberals want it bigger?
Remember, as you choose sides in this debate, as you make decisions leading up to the 2012 election, as you contemplate the reasoning behind 10 hotdogs in a pack vs 8 buns…that pile represents money YOU owe to the lenders of OUR government which THEY have ALREADY spent.
When it comes to the national debt, the budget and the debt ceiling…what it all boils down to between the 2 sides is this:
Democrats are looking for a deal.
Republicans are looking for a solution.