Paul Ryan has said very well what many on the Conservative side of the argument feel – this isn’t the final straw, not by a LONG shot. With the budget battle now looming up among other things, this is just the beginning.
Michael Barone wrote a fantastic article about how we have to win two elections in order to really effect the changes that we want to make. 2010 was a great start to taking out not only the leftists and their socialistic bent, but to also remove many of the people who were masquerading as conservatives and hiding their spending bent on the right. But it wasn’t enough, by far.
Thomas Sowell wrote another terrific piece regarding the same discussion that has been going on on our show for some time – is this the best deal we could get? Heck no. We want 4-5 trillion in this cut and the 6 trillion dollar cutting Ryan Budget too. Is it likely to happen in this scenario before 2012? No. Thomas Sowell writes, in Ideas vs Realities, about the whole debate between the people who see the slow approach as barely palatable but a reason to keep pushing versus the people who see that the whole problem, created in 90 years, must be solved today in one fell swoop.
We saw Ryan’s plan fail in the Senate, the repeal bill the House sent fail, we saw an attempt to lower the budget before fall to much lower numbers than we wanted due to the Senate not being able to cut 60 billion away from this years spending, and we saw two larger bills fail during the debt crisis.
Instead of 3 trillion, we are going to see about 2.4 trillion, though as Kent Conrad even said – and I about fell out of my chair when he did – the 1.5 trillion the committee needs to shoot for is only a floor – not a ceiling. In a release earlier today he even stated that we need to aim closer to 4 trillion.
At that point you ask yourself how genuine that kind of talk was when Kent Conrad supported tabling of all the bills the GOP sent over to cut 6 and 3 trillion.
There are cuts, there are caps, as Paul Ryan will explain in the video, and there is a Balanced Budget Amendment that will have to be voted on before the end of the year. As Rep. Ryan will state – the caps are a miracle unto themselves.
Rep. Ryan does go on to explain how the leadership in the Bush White House, as we’ve often talked about on our show, has had some bad legislation they allowed themselves to be bullied into – NCLB and Medicare Part D were two that we have beaten up on Bush for ourselves – and he has some interesting information on how some of that worked behind the scenes.
One thing – this was NOT the budget. This was a cut to spending. This wasn’t the budget deal, and now THAT battle has to take place. Then the battle has to take place in November for the committee to run the numbers and issue a report to have the Congress vote on.
This is not a short term battle, no matter what anyone might say on any side of this spectrum. As Rep. Ryan says – this keeps the hounds at bay until 2012 where we can make some really great changes, bolster conservative leadership and take the Senate and the White House. Realize that the credit houses also said something in their statements about a uniting in a will to get a deal done – that on top of everything else it wasn’t really the numbers they were looking at but the willingness to accomplish something.
If we had waited – Obama could have made sure we defaulted on the interest payments, making sure our ratings went down, creating an issue where for every 100 basis points (1%) we had to pay more for the money we borrow – 100 billion in new interest payments every year per 1% (and the money isn’t borrowed in chunks – countries and people buy our debt all the time in little dribs and drabs – that’s how they make the money they do – they can move on a new situation quickly that way). In the Ken Langone video we had up – he states the same thing – if we ended up having to pay above the falsely low interest rates of today – 2-3% would equal 200-300 billion more every year in new interest payments – in other words, doubling what we pay today.
If we waited and didn’t have a deal and Obama paid the interest on time – the ratings agencies could have dropped us anyway BECAUSE we didn’t have a deal, pushing the interest rates up anyway and created the same issue. The extra 200 billion doesn’t sound like much until you realize that in 10 years that is 2 trillion dollars more – and THAT goes directly against the grain of some who want to lower the debt no matter what. That “no surrender” position could very well have expanded the debt. Think of it this way – Greece and Portugal’s interest payments are now 5-6% higher than they were before they were downgraded 4 positions.
On top of that – when the market took a dive in 2008 and into 2009? We lost somewhere around the order of 9 trillion in wealth in this country – both among the “fat cats” and people with retirement accounts that invested in the market. If the plan continued to drag along without a solution, or worse, if the credit of the United States went down 3-4-5 notches – we could have had a double dip in the market that might have taken us back down 3-4 thousand points. This would have affected everyone, and this would have crushed the economy for some time to come. Economists and market analysts alike were all saying the same thing. It could have been very, very bad.
When the wealth goes away – so does the revenue, enhancing our debt problems as well. Just look at the revenue now – 2 trillion versus when private sector spending was going crazy in the middle of the Bush years and government revenue was 3.5 trillion. If you allow the business to get hit with a loss of wealth that way again? Revenue WOULD have dropped to a low we haven’t seen in decades and it WOULD have put us even further behind the 8 ball.
Even the lauded Ryan plan? Won’t do it for some folks because even though it has the chance to have us at a SURPLUS – a real live surplus and not a surplus for a year – but a real live Federal surplus with NO debt in 30 years? It has deficit spending at first because you can’t just lop things off without serious consequences – like losing hundreds of thousands of taxpayers (government workers) and higher unemployment when people already can’t find jobs due to thousands applying for the same job. More money out, less revenue in. More debt.
Bluntly – this stopped a catastrophe, but it didn’t solve the problem by even a nibble.
This is not a time to become a house divided amongst ourselves. This is a time to realize that we all want the same thing, but some realize that this is a chess game and not something that can happen as quickly as we like. Did the people who understand this want more? Of course we did.
Should friendships and political alliances be shattered because this bill didn’t reach the heights some felt it should and some people understand why?
Only if we don’t look at the long haul.
And the long haul should be the Senate and White House in 2012.