They say that actions speak louder than words, so while keeping that old adage firmly in the back of our minds, let us consider the fact that the top Republican in Congress has now said that he wants Trillions of dollars in spending cuts as part of any must-pass legislation that allows the federal government to continue its frantic pace of crisis borrowing. Borrowing that has now become an integral part in enabling the government to continue operating and able to meet obligations to its investors. It's a new, and rather ambitious marker that has now been put down in the continuing battle over the budget that's expected to consume Congress for pretty much most of the summer. House Speaker John Boehner has also said that any legislation to raise the so-called debt limit beyond its current $14.3 Trillion cap will need to be accompanied by spending cuts larger than the amount of the permitted increase in the debt. So I guess the big question that remains is, will the Republicans once more do what they have done on so many previous occasions in the past and simply cave under the weight of their own demands? Mr. Boehner made his comments in a speech Monday night at the New York Economic Club. Boehner's comments come as investors and business groups alike have been seeking some level of assurance that the GOP-controlled House will join with Barry "Almighty" and the Democratic-controlled Senate and come together in an effort to enact the must-pass debt limit measure, which is needed to prevent a first-ever U.S. default on its obligations.
Ever the little boy who cried wolf, Treasury Secretary Timmy "The Tax Cheat" Geithner says that such a failure to increase the federal government's ability to borrow would have disastrous effects on the economy. Look, this clown Geithner, who was supposedly the only guy on the planet at the time who was capable of "fixing" our problem, continues to do nothing more than to ask for more money and to whine about what will happen if he doesn't get it. That's his solution to this fiscal nightmare? Just print more money! "It's true that allowing America to default would be irresponsible," Boehner has said. "But it would be more irresponsible to raise the debt limit without simultaneously taking dramatic steps to reduce spending and to reform the budget process." And that makes perfect sense, maybe too much. Because I'm more than a little nervous about the Republicans being able to pull this whole thing off. I'm just not sure if they have the requisite backbone. The government is now headed toward a staggering $1.6 trillion deficit for just this year which will require it to borrow more than $125 billion A MONTH. It's unclear at this point just how much of a debt limit increase is coming, but it would most likely take as much as a record increase in the $2 trillion range to avoid a second vote before next year's elections. The most recent increase in the debt limit of $1.9 trillion was passed by a Democratic-controlled Congress early last year. And the only reason this issue has become what it now has is because the Republicans now control the House. They need to remain resolute in this matter or risk appearing to the general public as being no different than the slimy Democrats.
Boehner's remarks are notable since it's virtually impossible to produce spending cuts of the size and magnitude now being called for without addressing major entitlement programs like Medicare, food stamps and Medicaid. Programs which together form the basis of my concern regarding the Republicans having the stomach and the political will to actually make a serious attempt at reducing our current level of insane spending . And what causes me no end of some rather intense heartburn is the fact that Boehner's comments come less than a week after Majority Leader Eric Cantor, R-Va., and other top Republicans seemed to acknowledge that political reality would probably rule out the making of such cuts before the 2012 presidential and congressional elections. So which is it? Are we going to set about making these cuts or not? Is this all nothing more that typical congressional double-speak? The GOP budget blueprint that passed the House last month calls for transforming Medicare from a program in which the government directly pays medical bills into a voucher-like system in which future beneficiaries, those presently 54 years old or younger, would receive subsidies for purchases of private insurance plans. "We should be talking about cuts of trillions, not just billions," Boehner said. "They should be actual cuts and program reforms, not broad deficit or debt targets that punt the tough questions to the future." This is the only rational way to deal with this growing problem, but just because it's the reason that makes the most sense, doesn't mean it's the course we will embark upon.
One of the options being considered by Republicans is to impose a hard cap on government spending that would be backed up with across-the-board spending cuts if the targets aren't met. Now it should go without saying that that idea is being firmly opposed by the Barry White House, which prefers a mechanism that would incorporate automatic revenue increases as well. "Tax hikes should be off the table," Boehner said. Boehner has called for "honest conversations" about the future of Medicare. But I think we all know that when referencing Democrats the term "honest conversation" becomes more of an oxymoron. Boehner added that a failure to act could provoke a debt crisis that could require tougher cuts than anything now being contemplated. Which you would think would be obvious to even the most casual of observers, regardless of their political persuasion. "If we don't act boldly now, the markets will act for us very soon," Boehner said. "We cannot let this moment pass," he added. Separately, Senate Budget Committee Chairman Kent Conrad, DEMOCRAT, said it may require a short-term increase in the debt limit to buy additional time for lawmakers to grapple with what is likely to be a very complicated and politically divisive budget debate. In New York, Boehner was asked whether he might consider a short-term debt measure. He did not directly respond.
While Democrats do freely admit that the must-pass debt limit legislation is going to have to have to be accompanied with some serious level of cuts to spending, they're none too quick to make any realistic proposals that make any sense or accomplish any significant spending reductions. And we have that fiscal genius, Vice President "Slow Joe" Biden who has been called in to host a second meeting of a group of lawmakers with the topic of discussion being deficit reduction. This odd little assortment of supposed financial wizards has been assigned the responsibility of being able to come up with some sort of bipartisan recommendations on deficit curbs to add to the debt limit measure. Right, like that's going to happen, especially with Biden leading the charge. Biden is about as useful as a screen door on a submarine. And Timmy "Tax Cheat" Geithner has now told lawmakers that while the government will officially reach the official debt ceiling in mid-May he can take advantage of some rather creative bookkeeping maneuvers to delay or hold off a first-ever default until August 2. What a skillful and creative little guy we have in Mr. Geithner. But then I suppose that one is forced to acquire certain bookkeeping skills when one is constantly trying to avoid the paying of one's taxes.
And then we have the stellar Senator from New York, Chuckie Schumer, someone with strong ties to Wall Street, and who, as always, is compelled to throw his two cents in by telling reporters on Monday that it would be a mistake to wait that long to approve the legislation since the markets could easily be roiled when the legislative process takes inevitable twists and turns. Schumer says it would a mistake for Boehner to cut it too close to the August 2 deadline. "A default would be even more catastrophic than a shutdown. The consequences are much more far-reaching and disastrous for the economy," he said. Look, what makes anybody think that this moron Schumer has even the slightest clue regarding what is truly needed to prevent our looming budgetary Armageddon. The Democrats are all about perpetuating the possibility of their doomsday scenario, but they want to do very little in the way of anything that would seriously address us be able to prevent just such an event from taking place. All they can manage to do is to paint the solutions being presented by the Republicans as being nothing short of extreme. Another Democrat decrying the urgency of the situation is Roger Altman, a former top Treasury Department official under "BJ" Clinton. In his attempt to foment just a bit more panic he says that, "If America were to default, even for 24 hours, that would have an unprecedented and a catastrophic impact on global financial markets and on American markets. You either default or you don't. There's no saying, 'I'm sorry. I didn't mean it.' And that makes it totally different ... from a government shutdown." Blah, blah, blah.
Right now the future looks pretty scary. And the fact of the matter is that the harsh reality here is that politicians that we once thought we could trust and rely upon, have been on a decades long spending binge and have now spent us right into oblivion. If we are to have any hope of successful navigating our way passed this new accelerated level of Obama induced spending, and get it under some sort of control, then deep cuts are now called for, very deep cuts. And as hard as it is going to be for many Americans to accept, it is a fact that cuts, substantial cuts, are going to need to be made if we are to have any hope of being able to survive. Despite all of the flowery prose coming from Barry, and the grandiose programs he wants to spend even more money on, money we don't have, we simply cannot go on this way, it's just that simple. We simply cannot afford to continue the trend of printing more money, simply because we can. So, will the Republicans stick to their guns in their efforts to obtain the much needed spending cuts before agreeing to any increase in the debt limit? We can only hope. Republicans have a lot riding on this, and the American are watching, very closely.
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