Tag Archives: debt

Why Isn’t Our Only Debt a Debt of Gratitude?

by Whitney Pitcher

thank you vets

As a very important source of strength and security, cherish public credit. One method of preserving it is to use it as sparingly as possible, avoiding occasions of expense by cultivating peace, but remembering also that timely disbursements to prepare for danger frequently prevent much greater disbursements to repel it, avoiding likewise the accumulation of debt, not only by shunning occasions of expense, but by vigorous exertion in time of peace to discharge the debts which unavoidable wars may have occasioned, not ungenerously throwing upon posterity the burden which we ourselves ought to bear. The execution of these maxims belongs to your representatives, but it is necessary that public opinion should co-operate. To facilitate to them the performance of their duty, it is essential that you should practically bear in mind that towards the payment of debts there must be revenue; that to have revenue there must be taxes; that no taxes can be devised which are not more or less inconvenient and unpleasant; that the intrinsic embarrassment, inseparable from the selection of the proper objects (which is always a choice of difficulties), ought to be a decisive motive for a candid construction of the conduct of the government in making it, and for a spirit of acquiescence in the measures for obtaining revenue, which the public exigencies may at any time dictate.

The above excerpt comes from President Washington’s farewell speech\. This speech has come to mind multiple times during Washington DC’s latest act of political theater.  Those words may have been spoken 217 years ago, but they are just as relevant today as they were then. In the meantime, our nation has gone deeper and deeper in debt. The last time we did not have debt as a nation was during President Jackson’s tenure (in 1835). Our debt has waxed and waned over the years, but nonetheless, it continues to climb.

Why haven’t our leaders taken to heart President Washington’s words? They have not cherished the public credit. They have abused it–both parties. Both parties have decried raising the debt ceiling when their party is not in the White House while raising the debt ceiling seemingly without question when their party is in power. Washington believed that preserving the public credit means that debt should be incurred in rare circumstances. He also believed that the only times its should be utilized in during “unavoidable wars” as to not burden future generations.

However, just weeks ago our government was poised to get involved in a battle between two evils in Syria–clearly an avoidable war that would require billions in spending. Rhetorical battles continue to be waged in Congress over Obamacare–legislation that is poised to add billions to our national debt.   Other rhetorical battles are being fought over a resolution to fund a bloated, yet currently supposedly shutdown government and to raise the debt ceiling yet again.

In the midst of all these threats of avoidable and political rhetorical battles, there has been a neglect of those who have fought in true battles to preserve the strength and security of which President Washington spoke. During the shutdown of our bloated government, memorials honoring the fallen have been barricaded, benefits to families of the fallen have been threatened, and bodies of the fallen have not been shown proper respect. Some of these things have been rectified–either by politicians trying to save face or by the veterans themselves.

Earlier today during the worship service I participated in with my church family, a man–a veteran– got up to give a brief message before we partook of communion. He spoke of the sacrifice of both Jesus and American soldiers– one man who died to save our souls and the many men and women who died to protect our freedom. He noted a quote that one of his co-workers  has as an e-mail signature that reads something like this “there are only two entities who have given their lives for you expecting nothing in return”. This, of course, alludes to both Christ and American soldiers.

We owe Christ a debt of gratitude that of course we can never repay. We owe American soldiers a debt of gratitude that we can poorly attempt to repay. Our political leaders must heed President Washington’s word about cherishing the public credit. We should not continue accruing debt for bloated government, temporary programs that become permanent, and an ever list of increasing agencies, departments, and bureaus. Our only debt should be to those who have given of themselves to protect the freedom we have in this nation. A freedom that diminishes every time we add to a monetary debt rather than a humble debt of gratitude.

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President Obama Funds a Government with an “Epidemic” of Sexual Harassment

by Whitney Pitcher

As the Democratic National Convention got under way today, the Democrats trotted out in their vagina and “Pillomena”birth control costumes to denounce the so-called Republican war on women. Meanwhile the national debt passed $16 trillion today, with $5.4 trillion of that coming during President Obama’s three and a  half years in office.

Nevermind all of that social and domestic economic policy stuff though, the Obama administration has foreign policy issues to attend to. As the New York Times reports:

 Nearly 16 months after first pledging to help Egypt’s failing economy, the Obama administration is nearing an agreement with the country’s new government to relieve $1 billion of its debt as part of an American and international assistance package intended to bolster its transition to democracy, administration officials said.

[…]

In addition to the debt assistance, the administration has thrown its support behind a $4.8 billion loan being negotiated between Egypt and the International Monetary Fund. Last week, it dispatched the first of two delegations to work out details of the proposed debt assistance, as well as $375 million in financing and loan guarantees for American financiers who invest in Egypt and a $60 million investment fund for Egyptian businesses.

Rather than focusing on reducing America’s burgeoning debt, President Obama is extending debt assistance to a country who already owes us more $3 billion, as the Times article later states. But what’s a billion dollars when one’s administration has added $5.4 trillion already, right? President Obama had already bypassed Congress to give Egypt $1.5 billion in March when the then unelected Muslim Brotherhood already held power. Additionally, as noted above the Obama administration has been instrumental in facilitating an large IMF loan to Egypt.

Furthermore, despite the supposed war on women in America, President Obama is extending loan support to a country that recently elected a Muslim Brotherhood candidate to the presidency in June. This president, Mohammed Morsi, promised to select a female VP, but did not, only choosing women for aide and advisory roles. More appalling though, the election of the Muslim Brotherhood three months ago has lead to what the BBC calls an “epidemic” of sexual harassment (emphasis added):

 Campaigners in Egypt say the problem of sexual harassment is reaching epidemic proportions, with a rise in such incidents over the past three months. For many Egyptian women, sexual harassment – which sometimes turns into violent mob-style attacks – is a daily fact of life, reports the BBC’s Bethany Bell in Cairo.

[…]

The day I met Marwa, she was wearing a long headscarf pinned like a wimple under her chin, and a loose flowing dress with long sleeves over baggy trousers.

But dressing conservatively is no longer a protection, according to Dina Farid of the campaign group Egypt’s Girls are a Red Line.

She says even women who wear the full-face veil – the niqab – are being targeted.

 “It does not make a difference at all. Most of Egyptian ladies are veiled [with a headscarf] and most of them have experienced sexual harassment.

President Obama adds to our debt to help ease the debt of a country that has a massive and real, sustained war on women. Meanwhile, this week, the Democratic National Convention will have women like Sandra Fluke, a 30 year free birth control proponent, speak on a faux war on women and pay homage to former Senator Ted Kennedy who was notorious for leaving a female companion, Mary Jo Kopechne, to drown after a drunk driving crash and for sexual harassing waitresses. Such blatant and out-of-touch hypocrisy.

However, none of this is any surprise to Governor Palin–often the target of the Democrats’ misogyny herself. In February of 2011, she warned of the threats to women’s rights (as well as religious rights) should the Muslim Brotherhood take control:

While the Obama administration claims that such funding and diplomatic support to Egypt is aimed to assist the formation a new democracy, they do nothing of the sort when they aid an ideological group based on harassment of women and religious persecution.

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Attention Getter of the Day: U.S. Debt Isn’t $14 Trillion, It’s Actually $211 Trillion

By Gary P Jackson

Just a little something for readers to contemplate over the weekend. Oh, and remember our nation’s annual GDP is only $14 trillion, give or take a billion or two.

From NPR:

When Standard & Poor’s reduced the nation’s credit rating from AAA to AA-plus, the United States suffered the first downgrade to its credit rating ever. S&P took this action despite the plan Congress passed this past week to raise the debt limit.

The downgrade, S&P said, “reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.”

It’s those medium- and long-term debt problems that also worry economics professor Laurence J. Kotlikoff, who served as a senior economist on President Reagan’s Council of Economic Advisers. He says the national debt, which the U.S. Treasury has accounted at about $14 trillion, is just the tip of the iceberg.

We have all these unofficial debts that are massive compared to the official debt,” Kotlikoff tells David Greene, guest host of weekends on All Things Considered. “We’re focused just on the official debt, so we’re trying to balance the wrong books.

Kotlikoff explains that America’s “unofficial” payment obligations — like Social Security, Medicare and Medicaid benefits — jack up the debt figure substantially.

If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $211 trillion. That’s the fiscal gap,” he says. “That’s our true indebtedness.

We don’t hear more about this enormous number, Kotlikoff says, because politicians have chosen their language carefully to keep most of the problem off the books.

Why are these guys thinking about balancing the budget?” he says. “They should try and think about our long-term fiscal problems.

According to Kotlikoff, one of the biggest fiscal problems Congress should focus on is America’s obligation to make Social Security payments to future generations of the elderly.

We’ve got 78 million baby boomers who are poised to collect, in about 15 to 20 years, about $40,000 per person. Multiply 78 million by $40,000 — you’re talking about more than $3 trillion a year just to give to a portion of the population,” he says. “That’s an enormous bill that’s overhanging our heads, and Congress isn’t focused on it.

We’ve consistently done too little too late, looked too short-term, said the future would take care of itself, we’ll deal with that tomorrow,” he says. “Well, guess what? You can’t keep putting off these problems.

To eliminate the fiscal gap, Kotlikoff says, the U.S. would have to have tax increases and spending reductions far beyond what’s being negotiated right now in Washington.

What you have to do is either immediately and permanently raise taxes by about two-thirds, or immediately and permanently cut every dollar of spending by 40 percent forever. The [Congressional Budget Office’s] numbers say we have an absolutely enormous problem facing us.

Listen to audio of the full interview here.

Not to worry though, our “betters” say we can just print more money!

All is well!

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Governor Palin–Leading the Fight on Debt and Liabilities

by Whitney Pitcher

This week has yielded several rather disappointing pieces of news when it comes to America’s long term fiscal health.  A disappointing debt ceiling compromise was passed by Congress and signed into law by the President earlier this week.  As Governor Palin put it on Hannity earlier this week, “ [w]hat they have just done to this country, Sean, is hand the most liberal president we’ll probably ever see in our lifetime an opportunity to spend even more money that we don’t have. To create more debt thinking that’s going to get us out of debt?” The debt ceiling deal was “supposed “ to quash economic fears and provide stability, but it has done nothing of the sort. Yesterday, the Dow fell 513 points yesterday. Tonight, a report was just released stating that Standard and Poor’s is going to downgrade America’s credit rating. News also came out today that the deficit for this fiscal year has surpassed $1 trillion with two months still to go.  With all of this sobering financial news and with an election horizon, would it not  behoove the American people to elect an executive who is willing to make tough choices with the budget and address the debt and liabilities that America holds?

Governor Palin was a frugal budgeter as the Governor of Alaska. During her tenure, she cut spending 9.5% while also vetoing nearly half a billion dollars in spending. She did this during strong economic times.  It should be noted that in addition to the traditional budget and capital budget that states are responsible for implementing, state governors are also responsible for managing their state debts and liabilities. These are often tied to bonds (both state and municipal) and state worker pensions and the like. Stacy has addressed this before, but  Pennsylvanians4Palin has a great post  that expands upon this topic by comparing and contrasting the records of Governors Palin, Perry, Pawlenty, Romney, and Huntsman in dealing with state debt and liabilities. Compared to all other candidates and potential candidates, Governor Palin increased the debt at a much slower rate and reduced total liabilities at a much higher rate than any of her fellow governors. Pennsylvanians4Palin shares:

Of the five governorships examined, Alaska under Palin saw the smallest increase in total debt outstanding (12.7% cumulatively, 4.2% per year). Texas under Perry performed worst, with total debt increasing 20.5% annually, almost tripling during his term (a cumulative increase of 184.2%).

On a per capita basis, only Utah under Huntsman performed slightly better than Alaska under Palin. Utah experienced a cumulative increase of 6.8%, versus 7.4% for Alaska (1.4% per year for Utah, versus 2.5% per year for Alaska). Again, Texas under Perry ranks last, with an astonishing cumulative increase in debt per capita of 140.4% (15.6% on an annual basis).

Average Cumulative Change in Debt Outstanding During Governorship

Average Annual Change in Debt Outstanding During Governorship


Total Liabilities

Alaska under Palin was the only state to see a reduction in total liabilities (34.6% overall, 11.5% per year), due in large part to the Governor’s insistence that the State’s surplus be used to pay down unfunded pension obligations and forward-fund education. All other states experienced cumulative increases in total liabilities, ranging from 19.5% for Massachusetts under Romney to 60.6% for Texas under Perry. On an annualized basis, other states showed increases ranging from 4.9% for Massachusetts under Romney to 8.2% for Utah under Huntsman.

Under Palin, Alaska’s total liabilities per capita fell 37.7% (12.6% per year). All other states experienced cumulative increases, ranging between 18.7% (Massachusetts) and 34.3% (Minnesota), and annual increases, averaging between 4.0% (Texas) and 4.9% (Minnesota and Utah).

[…]

During the fiscal years for which Sarah Palin exercised budgetary authority as Governor of Alaska (FY08 through FY10)

•   Debt outstanding increased 12.7%, or 4.2% per year

•   Per capita debt outstanding increased 7.4%, or 2.5% per year

•   Total liabilities decreased 34.6%, or 11.5% per year

•   Total liabilities per capita decreased 37.7%, or 12.6% per year

During the fiscal years for which Jon Huntsman exercised budgetary authority as Governor of Utah (FY06 through FY10)

•   Debt outstanding increased 21.0%, or 4.2% per year

•   Per capita debt outstanding increased 6.8%, or 1.4% per year

•   Total liabilities increased 41.1%, or 8.2% per year

•   Total liabilities per capita increased 24.5%, or 4.9% per year

During the fiscal years for which Tim Pawlenty exercised budgetary authority as Governor of Minnesota (FY04 through FY10)

•   Debt outstanding increased 66.0%, or 9.4% per year

•   Per capita debt outstanding increased 58.5%, or 8.4% per year

•   Total liabilities increased 40.7%, or 5.8% per year

•   Total liabilities per capita increased 34.3%, or 4.9% per year

During the fiscal years for which Mitt Romney exercised budgetary authority as Governor of Massachusetts (FY04 through FY07)

•   Debt outstanding increased 44.3%, or 11.1% per year

•   Per capita debt outstanding increased 43.3%, or 10.8% per year

•   Total liabilities increased 19.5%, or 4.9% per year

•   Total liabilities per capita increased 18.7%, or 4.7% per year

During the fiscal years for which Rick Perry exercised budgetary authority as Governor of Texas (FY02 through FY10)

•   Debt outstanding increased 184.2%, or 20.5% per year

•   Per capita debt outstanding increased 140.4%, or 15.6% per year

•   Total liabilities increased 60.6%, or 6.7% per year

•   Total liabilities per capita increased 35.8%, or 4.0% per year

Please read the whole post (which includes more tables and graphs) from Pennsylvanians4Palin here.

As  Pennsylvanians4Palin mentioned in their post, Governor Palin reduced Alaska’s liabilities in part by addressing their pension system. Governor Palin wrote in a Facebook post in December of 2010:

My home state made the switch from defined benefits to a defined contribution system, and as governor, I introduced a number of measures to build on that successful transition, while also addressing the issue of the remaining funding shortfall by prioritizing budgets to wrap our financial arms around this too-long ignored debt problem. When my state ran a surplus because we incentivized businesses, I didn’t spend it on fun and glamorous pet projects for lawmakers – though that would have made me quite popular with the earmark crowd. In fact, I vetoed more excessive spending than any governor in our state’s history, and I used the state’s surplus to bring our financial house in order by paying down our unfunded pension plans that some other governors wanted to ignore. This fiscal prudence didn’t make me popular with the state legislature. In addition to vetoing hundreds of millions of dollars in wasteful spending, I put billions of dollars into savings accounts for future rainy days, much like most American families do in responsibly planning for the future. I also enacted a hiring freeze and brought the education budget under control through a commitment to forward-funding. I returned much of the surplus back to the people (it was their money to start with!) through tax relief and energy rebates. I had proven as the mayor of the fastest growing city in the state that tax cuts incentivize business growth, and though the state legislature overrode some of my veto cuts and thwarted an additional tax relief request of mine, the public was supportive of efforts to rein in its government.

It’s one thing to veto spending and reduce the size of government when your state is broke. I did it when my state was flush with revenue from a surplus – though I had to fight politicians who wanted to spend like there was no tomorrow. It’s not easy to tell people no and make them act fiscally responsible and cut spending when the money is rolling in and your state is only 50 years shy of being a territory and everyone is yelling at you to spend while the money is there to build. My point is, if I could fight this fight in Alaska at a time of surplus, then other governors can and should be able to do the same at a time when their states are facing bankruptcy and postponing this fight is no longer an option.

Governor Palin had courage enough to take on pension reform and reduce spending when times were good. Now, with the economy circling the drain, America is in need of a leader who is willing to do the same…again. That is why she has spoken of the need to reform entitlements. That is why she called out President Obama for his hypocrisy and inability to prioritize spending during the debt ceiling debate. That is why she criticized Governor Romney for weighing in on the debt ceiling only after a deal had been reached. Now is not the time for hypocrisy, incompetent leadership, or retrospective armchair governing. Now is the time for a President who already has “womaned up” and led on a state level and is ready to do the same on a federal level.

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