I just received the following question via text message from a friend who doesn’t follow national politics very closely:
What happens if the government goes into default on our loans? Can the Chinese then ship the Capitol building to Beijing? Do they get to start charging admission to our national monuments? Admission payable only in yen? And when I see stats that say the deficit works out to $54k per citizen, shouldn’t the debt amount only be divided by the number of legislators who sold our asses to start with?
There’s a lot packed in there, but I wanted to specifically address the questions about defaulting on the national debt because they pertain to the looming debt ceiling fight. It’s a sad question for me to read, because it means the Obama messaging machine (the only thing this president is good at is messaging; we’ve known that since 2007) is winning the narrative war over the debt ceiling when someone who doesn’t follow national politics very closely frames the question that way.
The short answer is that we won’t default on our loans. The debt ceiling debate has nothing to do with whether or not the United States will default on its debt to foreign bondholders.
Each year, the United States government spends roughly $4.5 trillion, with roughly a third going to (a) service on the national debt (pretty much through interest payments only), (b) what’s called “mandatory spending” (in other words, entitlements like Medicare and Social Security), and (c) what’s called “discretionary spending” (in other words, spending on pretty much everything else, from corn subsidies and Navy ships to SNAP benefits and federal employee salaries; this is why the government is currently shut down … House Republicans tied annual discretionary spending authorizations and appropriations to a one-year delay of Obamacare implementation, and the Democrats aren’t going to play ball on that). The interest payments the United States has been making on those bonds held by foreign investors have, so far, been enough to prevent them from coming to call on the principal investment. Bonds are meant to be low-yield, safe, long-term investments anyway.
The debt ceiling is a statutory limit on the amount of money the United States Treasury can borrow from the world market by selling bonds in a given year. Treasury raises money through this practice for the purpose of raising money to pay for programs Congress created with legislation, and the president enacted with his signature. Both Congress and the president like this type of funding of government spending because it allows both to demonstrate value to tax payers through public expenditures without ever having to raise taxes on citizens to pay for those programs. Whether you’re a Democrat or a Republican voter, odds are that you will oppose a representative who raises your taxes come Election Day.
So the question isn’t whether we’ll default on the national debt if we don’t raise the debt ceiling; it’s whether or not politicians will get to have their cake and eat it too if Treasury can’t borrow enough money to pay for everything elected officials think the government should pay for as expressed through legislation.
The broader problem isn’t the statutory cap on how much money Treasury can borrow in a year; the broader problem is how many programs the government wants to try to run. Neither Republicans nor Democrats want to pay a political price for raising taxes, and frankly, it’s not all that clear that Republicans want to limit the number of programs the government should try to run, for all the lip service party members pay to “reducing the size and scope of government,” or to Reagan’s three favorite bogeymen, “waste, fraud, and abuse.” The Republican Party (absent Rick Perry, and even he struggled with it in presidential primary debates) can’t really name much of anything in terms of programs they actually want to end. That’s smart politics to not box yourselves in and paint a target on your back for Democrats to pound … but current fiscal policy is unsustainable.
The shutdown is the product of a policy rider (Obamacare delay) that is a wedge issue between the two parties being attached to the funding of already-enacted government programs. The debt ceiling is a separate issue from the shutdown.
Further questions from non-political friends welcome.
I’ve got a little more confidence in the Official Friction Tape Fantasy Team™ roster this year than I had in it last year, and I have certainly more in it than I have in the team I drafted today for a separate league. Regarding today’s draft: Damien Brunner is gifted but unproven; Colin Wilson should lead Nashville in scoring, but consistency and injury are his two biggest bugs; Brandon Saad and Vladimir Taransenko may have slumping sophomore seasons. Otherwise, I think the team is pretty well-rounded.
Regarding OFTFT™, Valeri Nichushkin should be an exciting rookie to watch in Dallas; Ryan Kesler should look to rebound after missing most of last season with injury, and should be a dynamic player for Team USA in the Sochi Olympics; the obvious weakness here is in goal, as Cory Schneider may not wrest a starting job away from Martin Brodeur (making him useless as a fantasy option), and the Islanders may not play well enough in front of an aging Nabokov to help him in the wins column.
Sadly, I don’t have enough confidence in the Predators this year to have loaded up either roster with a bunch of homer picks. I wanted to draft Pekka Rinne today, despite questions about his health, and I drafted former Predators Ryan Suter and Cody Franson. Hell, I even considered drafting former Predator Martin Erat late in today’s draft, or current Predator Rich Clune, whose 113 PIMs were good for 5th in the NHL last season.
Drew Johnson, a friend, has a reputation for acerbic statements. He has been a known quantity in Tennessee for many years now. T-FP knew what they were getting when they hired him. Hell, it’s probably, at least in part, why they hired him in the first place.
I’m hearing his offending “shove it” editorial was the most-read piece ever on T-FP’s website, and their advertisers and sponsors have got to love the attention. But I also suspect that someone over there — or maybe even outside the paper, like a potentially embarrassed Mayor Andy Berke — was looking for a reason to get rid of Drew, and so they’ve dressed up this non-troversy as some firing offense, when really it’s probably not a firing offense at all (if Drew’s side of the story is to be believed, which I think it is).
Free Press editor Drew Johnson has been terminated after placing a headline on an editorial outside of normal editing procedures.
Johnson’s headline, “Take your jobs plan and shove it, Mr. President: Your policies have harmed Chattanooga enough,” appeared on the Free Press page Tuesday, the day President Barack Obama visited the city.
The headline was inappropriate for this newspaper. It was not the original headline approved for publication, and Johnson violated the normal editing process when he changed the headline. The newspaper’s decision to terminate Johnson had nothing to do with the content of the editorial, which criticized the president’s job creation ideas and Chattanooga’s Smart Grid. The Free Press page has often printed editorials critical of the president and his policies.
The Chattanooga Times Free Press is unique in that it has two editorial pages, the conservative Free Press page and the liberal Times page. This newspaper places high value on expressions of divergent opinion, but will not permit violations of its standards.
Johnson adds in the comments of the thread above:
We change headlines all the time at the last minute. I had a filler headline in that stunk and thought of that Johnny Paycheck song and changed it. Didn’t think it would be a problem. Apparently, I was wrong.
…I started chuckling a little under halfway through this super cut of Hugh Jackman’s Wolverine brandishing his adamantium claws across the various X-Men (and related) titles that have been released to date. Have a look:
“I’m one of those people who has to preface everything I say about Phish to a non-fan with some form of the phrase, “OK, so I know not everybody likes Phish, but…” You see, I understand. You hate it. You hate the solos. You hate the hippies. You hate the 30-minute jams. I get it. But in a way, you don’t get it. And that’s fine. Because Phish is one of those things that, like baseball or “Star Trek,” only appeals to a true nerd, the kind of person who draws immense pleasure from investing hours into something that, at the end of the day, is really just a hobby.”—Read the rest of Nathan Burgess’s “After 30 years, Phish is still worth it" at Stowe Today.
Why Don't Democrats Just Shut Up about Keystone XL?
Former Obama speechwriter Jon Favreau has penned a really stupid column in The Daily Beast arguing that Republicans are just scared Obamacare might actually work, that Democrats will score political points on it, and that’s what all the brouhaha has been about since efforts to repeal or otherwise overturn the legislation began as soon as it became law of the land in 2010. In it, Favreau asks,
At this point, why not sit back and wait for this crazy experiment to self-destruct? Why not let President Obama and the Democrats reckon with the millions of angry Americans who will undoubtedly hate their new insurance or their new insurance protections?
In boxing, this type of vacuous, rhetorical appeal is what we call “leading with the chin.” One of the pillars of President Obama’s 2008 election campaign was the idea that a “clean energy economy” would usher in a new era of innovation, spurned by government investment in public works projects and private sector start-ups, and we would see some fantastic jobs boom without ever suffering consequences of higher consumer pricing, or strangulation of the American economy as we traded away competitive advantage to the rest of the world on nearly every consumer good you can imaging.
So to turn Favreau’s non-reasoning around on him, if construction of the Keystone XL pipeline is such a bad idea, why not just sit back and wait for the crazy experiment to self-destruct?
The reason is that bad public policy should be stopped in its tracks while it still can be. It’s a bad idea and a gross moral failing to force people to suffer when you have means at your disposal to try to achieve alternatives.
I just wanted to state for the record that I think building the Keystone XL pipeline would be a really good idea, and that I think implementing Obamacare is a really bad idea. I didn’t mean to bring up Keystone XL as an example of bad public policy, but I think Favreau would agree with me that Democrats speak up about it and use means at their disposal to stop it precisely because they think it’s bad public policy … not because they think it will work and give Republicans a political advantage on energy policy (or otherwise) going forward.
Arlington, VA - An America Rising analysis of former Secretary of State Hillary Clinton’s rhetoric on surveillance issues during her campaign for the 2008 Democratic presidential nomination reveals a sharp disconnect with the recently revealed actions of the Obama Administration.
Between Costco and the store across the street, you’ve got a simple opportunity/cost argument. The store across the street is closer but more expensive (I presume). Costco is farther, but cheaper. Multiply the difference in travel time by your value of time (your wage is a good measure). If the Costco savings outweigh this, jump in the car.
Myself, I know some things are available in some stores, but not in others. I also know there’s a huge difference in quality between some places. So it’s not uncommon that I’ll visit more than one grocery in a month to fill all my eating needs. Plain and simple, I’m a utility-maximizer, and accounting profits, while sometimes a consideration, because having money gives me utility, shouldn’t be the sole driver of choices regarding something so wonderful as food.
Conservatives need to wise up: the IRS scandal is not about Lois Lerner.
Lerner is a career civil servant. She was doing what her bosses wanted. Is she personally a Democrat, probably somewhat progressive? Maybe, but I don’t know.
Here’s what we know: the President demonized conservative groups generally, and in some cases by name; it appears the White House obtained and leaked tax info on Romney and the Kochs; a boatload of Democratic senators called for the IRS to “crack down” on conservative groups.
Lerner is a bureaucrat, not an idiot. It doesn’t take a genius to figure out how to stay employed; it’s the skill at which bureaucrats most excel.
The problem is not Lois Lerner; the problem is giving the government, and especially the IRS, the power to police political speech.
The sooner conservatives figure this out, the sooner we’ll begin moving back toward being a constitutional republic. Sadly, lots of folks are too busy trying to collect scalps and pin this scandal on a president who never again has to run for reelection. Don’t waste this opportunity.