Tag: Social Security

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Politics United States

Limbaugh Misleads His Sheeple On Effects Of Not Raising The Debt Limit

The brainiac that is Rush Limbaugh has figured out the whole raising the debt ceiling thing, and according to Mr. Limbaugh, not raising the debt ceiling means nothing, except that “we wont be able to borrow any more.” Here’s The Brain at work, while talking to a caller to his radio show;

LIMBAUGH: Here’s the point, it’s a scare tactic. It really isn’t possible, there is always money coming in. The government can count on tax revenue from any number of sources and activities, there will always be money coming in. They can always print money. This default business is a straw dog, it’s a straw man they’re throwing out there to you. You want to know what the actual manifestations of an official default would be —

CALLER: Yeah, absolutely. Because, I mean, just looking in recent history, we were listening to the media and they’re talking about how bad a government shutdown would be —

LIMBAUGH: It just — all it means is we won’t be able to borrow anymore. That’s all it means. All it means is we have to live within our means.

CALLER: Well I don’t think that would be too bad then.

LIMBAUGH: No, it’s not. You know, the whole business — I shocked a lot of people yesterday when I said not raising the debt limit is an option.

Of course, that’s just Limbaugh’s view, shared by his immediate audience. But what are the facts of not raising the debt ceiling?

The United States has always carried a federal debt and there are two basic types of debtors. Debt held by the public and those held by other governments. Raising the debt ceiling allows the United States to pay its bills to these two entities, thus, maintaining its triple-A ratings worldwide. Just like not paying your credit card directly affects your abilities to get further credit and eventually lowering your credit ratings, causing potentially adverse effects in the future, the same is true for the United States.

While Limbaugh is partly right–that the Federal government would always have money coming in through tax revenue–this revenue would not be able to sustain the obligations of the government, especially since the we presently have a deficit, hell-o!

According to the Congressional Research Service, “the federal government would need to rely solely on incoming revenues to finance obligations. If this occurred during a period when the federal government was running a deficit, the dollar amount of newly incurred federal obligations would continually exceed the dollar amount of newly incoming revenues.”

So this is not the time to rely solely on tax revenues to pay the federal debt. It is frankly, unrealistic to be expected to pay your bills with money you don’t have. Treasury however, have some other tricks up their sleeves to avoid reaching the debt limit, and have successfully employed these tricks in previous years, 1985, 1995-1996, 2002 and 2003. Some of those tricks included;

To delay issuing new short-term government securities to the Civil Service Retirement and Disability Trust Fund, the Social Security Trust Funds, and several smaller trust funds. In particular, new Treasury obligations could not be issued to the trust funds because doing so would have exceeded the debt limit. Treasury took the additional step of “disinvesting” the Civil Service Retirement and Disability Trust Fund, the Social Security Trust Funds, and several smaller trust funds by redeeming some trust fund securities earlier than usual.

Again, our economic situation now does not allow for the Treasury to take these steps, so raising the debt ceiling is the only other option.

But if we were to follow Rush’s misinformed blabbering, and the debt ceiling is not raised, the United States could not pay its bills.

Potential Economic and Financial Effects

In addition to the potential impact on federal programs and activities if the debt limit is not increased, there may also be economic and financial consequences. A 1979 GAO report described the consequences of failing to increase the debt ceiling. GAO said the government had never defaulted on any of its securities, because cash has been available to pay interest and redeem them upon maturity or demand. Further, GAO said a default on the securities could have adverse effects on the economy, the public welfare, and the government’s ability to market future securities.

It is difficult to perceive all the adverse effects that a government default for even a short time would have on the economy and the public welfare. It is generally recognized that a default would preclude the government from honoring all of its obligations to pay for such things as employees’ salaries and wages; social security benefits, civil service retirement, and other benefits from trust funds; contractual services and supplies, and maturing securities…. At a minimum, however, the government could be subject to additional claim.

Source: The Congressional Research Service

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Medicare Politics Republican Rick Scott Ronald Reagan United States

Republican Robin Hoods – Taking From The Poor To Support The Rich

Republicans have long wished for the time when the poor and suffering would move out-of-the-way, and allow the millionaires, billionaires and Corporations to prosper. In their view, poor and middle class Americans are trying to take away all the programs the government has established to benefit the rich. Republicans call these “entitlement programs,” and the sooner they’re able to push and squeeze others off these programs, the sooner the rich can benefit.

No place is this more evident than in Florida, where a new Teaparty candidate,  representing the Republican party,  held a townhall meeting to address his supporters. Mr. Allan West, the House representative for Southeast Florida told the crowd that he would love to abolish the Internal Revenue Service and federal income tax, while retaining tax cuts for billionaires. West also wants to stop the  extension of unemployment benefits to the middle class and refers to the government  providing these benefits to middle class Americans as, “rewarding bad behavior.”

In reference to Social Security, Medicare and Medicaid, West thinks that leaving these services in tact will deplete our GDP by 2030 or 2040. His plans would be for the eventual dismantling of these  services that again for the most part assist the poor people and middle class. Spokeswoman for DCCC Jennifer Crider said;

“Everyone agrees we need to cut spending, but Representative Allen West is making the wrong choice by forcing seniors to shoulder the burden and while not asking Big Oil companies making record profits to sacrifice even the smallest amount.”

Social Security is a program that mostly pays for itself. Over the last few years, however, the program has began to show signs that it will eventually fall short of its goals of comfortably providing for its beneficiaries, mainly because more people are entering into retirement and also because the labor force is reduced due to the economic downturn. Republicans, who have been trying to dismantle the program for decades, are now using the economy and the federal deficit as reasons to bring social security to its knees. Some Democrats, like Senate Leader Harry Reid of Nevada, are determined to fight these efforts of the Republicans. In a recent interview, Mr. Reid said;

“I have said clearly and as many times as I can, leave Social Security alone. Social Security does not add a single penny, not a dime, a nickel, a dollar to the budget problems we have. Never has and for the next 30 years it won’t do that.

“So what I’ve said, if you want to look at something to take care of the out years, let’s do it at the right time. It is not in a crisis at this stage. Leave Social Security alone. We have a lot of other places we can look that are in crisis. Social Security is not. I repeat, for the next approximately 30 years people will draw 100% of their benefits.”

Mr. West’s thinking is common amongst Republican party members. Many Republican governors nationwide have begun breaking down the middle class in order to support their rich donors. Recent examples in Wisconsin, Detroit, and Florida are just some of the states where Republican governors are creating laws geared towards removing any form of assistance from the middle class worker, and transferring that assistance to the rich. Rick Scott of Florida recently proposed a bill that will cut school subsidies in his state by $1.3 billion, while at the same time, giving a tax cut of $1.6 billion to millionaires.

It is a transfer of wealth like we haven’t seen in quite a long time, and it started over 30 years ago when Ronald Regan introduced the idea of trickle down economics. The concept embraces the belief that giving to the rich will in turn allow them to provide jobs to the middle class, thus trickling down the wealth. But this idea failed in the Reagan years, causing the president to raise taxes in an effort to fight off a downward turn in the 1980 economy. And although it failed then, trickle down economics was embraced by conservatives over the past 30 years, and contributed heavily to the most recent recession that started in 2007/2008 under the Bush administration. According to reports from The Atlantic;

When Clinton left office in 2000, the Census counted almost 31.6 million Americans living in poverty. When Bush left office in 2008, the number of poor Americans had jumped to 39.8 million (the largest number in absolute terms since 1960.) Under Bush, the number of people in poverty increased by over 8.2 million, or 26.1 per cent. Over two-thirds of that increase occurred before the economic collapse of 2008.

Unfortunately, here we are in 2011, and the trickle-down trend has continued. Republicans are now taking away from schools, education, cutting back on planned parenthood and public radio, in an effort to finance the bank accounts of the rich. Will the American people wake up from their slumber before it’s too late? Will we ever realize that the last 30+ years of trickle down economics did nothing for the middle class, and everything for th über rich? If we continue to go down this path we’ve been on for the past 30 years, why should we expect a different outcome?

America can once again be what the founding fathers intended it to be. The preamble to the constitution says it best;

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity do ordain and establish this Constitution for the United States of America.

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