Debt Crisis

            We can't turn on the TV or the radio these days without hearing about the debt crisis that threatens to consign our grandchildren to the poorhouse. Everyone agrees that something has to be done. Yet, no solution is possible under the circumstances. And by circumstances I mean a government split into parties, wings, movements, coalitions, factions, and caucuses, all with good intentions overridden by the necessity of achieving or remaining in power.

            Instead of taking bold action to fix the problem, Washington is mired in endless arguments about what and how much to cut from discretionary spending, which is only about 30% of the budget. Even here, every proposed cut is met with cries of anguish from the ox being gored. Cut, yes, cut. But cut the other guy, not me.

            The same cries emanate from the Department of Defense. With a budget larger than the defense budgets of the rest of the world combined, we can't possibly deny the need for another aircraft carrier, can we ? Or for more submarines equipped with ballistic missiles that are powerless to prevent the Middle East from becoming a gigantic Islamic republic? Seriously, do we still need 60,000 troops in Germany or an air base in Bulgaria?

            Meanwhile, no one is willing to offer a sensible plan to reduce entitlements for fear of offending seniors--you know, those old folks who vote. Someone has suggested that we lock congressional leaders in a room and not let them out until they've agreed on a solution. That way neither side would fear retribution from those nasty seniors. So much for leaders with the courage of their convictions.

            And then we have our dear President who still thinks we can spend (Sorry! Invest) our way out of this mess.

            God help us.

           

Unions

            The protesters massing in Madison's capitol have been compared to the protesters in Cairo by union sympathizers. They have got it exactly wrong.

            Union members have called Governor Scott Walker a Nazi and a Fascist while carrying signs that portray him as Hitler and Stalin. But just who is it that is refusing to cede power? The real despots, it seems to me, are the union bosses who have bullied their way to power and who unleash their goons to enforce their dictates.

            The crowds in Cairo wanted freedom. Union members should have freedom, too. The one thing union bosses fear the most is the freedom of their members to choose. Their loudest protests are against Governor Walker's proposal to have union members write their own checks to pay their union dues rather than the government doing it for them.

            Why? Because given the choice, some members would choose not to pay their dues. Why not? Because not all union members approve of the way union bosses spend their money. Specifically, they do not want their dues supporting the Democratic Party exclusively so that Democratic legislators can return the favor. Why else would Democrats in the Wisconsin legislature leave the state to avoid voting on bills unfavorable to their union supporters? There are no secrets here.

            We can argue all day about the pros and cons of unions. There is much to be said on both sides. But the reality is that states with public sector unions are going bankrupt, because they can no longer afford to pay for the sweetheart deals their members got on benefits and pensions, not to mention salaries that far outpace those in the private sector.

            Governor Kasich of Ohio has it right. He has seen his state lose hundreds of thousands of jobs to Right to Work states and to states with no income taxes. He wants those jobs to come back to Ohio. And the only way he can do that is to make Ohio employer-friendly. But what employer is going to want to build a plant in Ohio after seeing the vicious thuggery of union protesters massing in Columbus?

            I believe we have reached a seminal moment in American history. We will either make the tough choices necessary to rescue this country and the states from collapsing into intractable bankruptcy, or will blow a goodbye kiss to the good old USA that we've all known and loved.

Stupidity and Contempt

            Stupidity and contempt. To me, these are the two primary characteristics of the Obama administration when it comes to energy policy.

            Let's start with stupidity. The United States sits on the greatest reserves of gas and oil in the world. Yet, we import millions of barrels of oil from other countries that are either our sworn enemies or vulnerable to a takeover by them. The price of oil on the world market has just shot up to over $100 a barrel  because  of the turmoil in the Middle East. It could easily double if Islamists succeed in blocking the Straights of Hormuz or the Suez Canal. But the administration not only discourages exploration, it prevents the drilling of new wells.

            When Americans find themselves paying double and triple at the pump, the money spent there will not be available to spend on food, clothing, and other necessities. That is a surefire formula for economic collapse. But the administration doesn't see it that way. It's more important to keep the tree-huggers happy.

            Is that stupid, or what?

            Now contempt. In the last two years we have witnessed the contempt of the Obama administration and its Democratic lackeys in pushing through legislation like Obamacare, which the American people clearly opposed. The contempt of the administration in conducting its energy policy has now also been made clear.

            U.S. District Judge Martin Feldman has found Interior Secretary Ken Salazar in contempt for violating his 6/22/10 injunction against enforcing the drilling moratorium, which Salazar imposed after the Gulf oil disaster. But let's follow the bouncing ball here.

            First, Salazar appealed Feldman's decision, but lost. Unwilling to concede, he colluded with Climate Czar Carol Browner and imposed another, slightly different but effectively the same, moratorium on July 12. Judge Feldman declared this moratorium was also a violation of his injunction. On 9/12/10 Salazar lifted the moratorium. But guess how many drilling permits have been issued since then. NONE.

            Is that contempt, or what? Judge Feldman certainly saw it that way. Now it remains to be seen what the consequences will be.

            Up against such stupidity and contempt, is there any hope?  

The Big Lie

            I confess I was taken in like so many others by the dire warnings of the catastrophe a failure to raise the debt ceiling would cause. This failure, we were told, would make us default on our debt and damage our world standing.

            These warnings, it has now become clear, are a big lie.

            Let me put it as simply as possible: we don't have to raise the debt ceiling to prevent a default on our debt obligations. We all know that our government spends more than it takes in. True. But our cash flow is far greater than the interest on the debt. All we have to do is pay the interest on our debt first before the government overspends on everything else.

            How can anything be more simple than that?

            The beauty of this solution is that it would force the government to live within its means. All Congress has to do is refuse to raise the national debt ceiling. Then the government would have to make hard decisions on what to cut. Not next year, not in 2020. Now!

            The government would have no choice but to live with a balanced budget. Just like the rest of us.

            Senator Pat Toomey of Pennsylvania first launched this idea in January and has now proposed legislation entitled "Full Faith and Credit Act" that would require the Treasury Department to deal with the debt first. Tim Geithner is screaming bloody murder, and Senate Democrats have sided with him, so the bill will not pass. But a similar bill has been introduced in the house by California Representative Tom McClintock and appears to have the backing of Tea Party supporters.

            The fight is on. Now that the lie has been exposed, we'll see who is really serious about controlling government spending.