Saturday, July 16, 2011

Debt ceiling: pain now or pain later

When a top administration official asked The Big 0 for his approach to garnering support on increasing the nation's credit card, Obomba paraphrased David Farragut's famous words. In fearmongering typical of The Political Class, Obummer said:

Damn the torpedoes, full speed ahead!

Obama and Republican leaders keep talking up the "catastrophe" that lay ahead for America if the debt ceiling isn't raised. And while I accept their argument that there will be significant problems if the debt ceiling isn't raised, they FAIL to acknowledge the complete picture.

If the debt ceiling is raised, the pain will only be delayed. As I said in my opposition during the runup to the Bush Bailout, it's pain now or pain later.

The pain cannot be avoided indefinitely. Among insiders, it's already widely accepted that the dollar's life as the world's reserve currency is coming to an end. As our special status ends, our standard of living will drop because the dollar will have less and less buying power. So the pain is coming. I think the better solution is to deal with the pain now.

I agree with my favorite Congressman, Dr. Ron Paul:

By the way, Washington's fearmongering includes lies. America has defaulted in the past.

In 1933, FDR defaulted when he refused to pay debts -- as promised -- in gold and converted to "federal reserve notes" for all payments, excluding foreign central banks. And in 1971, Nixon completed FDRs default by refusing to pay foreign central banks in gold. So this would *not* be the first time we defaulted.

This really is classic fearmongering.

Tim White


Anonymous said...

WOw Tim, I've enjoyed your blog in the past. However, the disrespect you have just shown for our Present, Barack Obama is disgusting.

Good day.

Tim White said...

Fair enough. He is the POTUS. I should be more respectful. I apologize.

But I'm beyond disappointed with him. He had an opportunity make change happen in America, instead he continued the same failed economic & war policies of Bush... only with more gusto.

I never expected him to reverse course monetary policy, but he's allowed Bernanke to turn on the printing presses... exacerbating the problem of a devalued dollar.

He was supposed to stop / slow the war machine. Instead, he starts a new one.

And as Paul Krugman explains today, Obama has simply extended the unofficial Bush banking policy: Go easy on the bankers. Why the heck did we spend the past couple years having the Fed loan money to the banks at 0%, then borrow it back at 3%? IMO, the fix is in. And while I don't think Obama was necessarily cognizant of what was happening, I don't think Bush was necessarily cognizant of much of what happened under him. But they hold the office of POTUS and they are the individuals to take the blame.

So again, I apologize. But saying I'm disappointed would be an understatement. He had an opportunity for real change, but based on his time thus far in office it appears to me that it was never his goal. Heck, read Krugman's piece. He notes that it was nine mos ago that we learned about the fraudulent foreclosure practices that were happening nationwide. So why hasn't any action been taken? It's difficult for me to not conclude that Obama doesn't want real reform. He prefers the status quo.

Anonymous said...

Ok, glad I bothered to check back. Apology acknowledged.

Like any political figure, a president has to balance a whole bunch of competing interests. He couldn't take on the banks and healthcare at the same time - and I just read that Warren's protege will be heading the new consumer protection committee - sometimes you have to fight by proxy.

Keep the faith - and don't be fooled by the pseudo grassroots movements.

PS - I like Krugman, too.

Anonymous said...

B. Hussein wanted change alright ... but not the kind any sane American who loves his country and Constitution would want.

You should be more concerned about the offenses this President has made and put on the shoulders of all Americans and their children & grandchildren, the offenses he has made against the private sector and middle class he claims to serve, and what he has planned for everyone if the Republicans cave in the current debt ceiling debate. Yes, be more concerned about what this President and his leftist shills plan to do to everyone - left unchecked; rather than worrying about one fragile ego of an anonymous liberal drone.

As for Ron Paul - his message is spot on regarding the debt ceiling. He's a compelling candidate - until one examines his naivete and libertarianism - precluding him from ever being taken seriously on foreign policy matters involving national security.

Anonymous said...


While I lean left on most (not all) social issues, I considered myself center-right on economic issues and would very much appreciate your views on Warren Buffett's recent editorial regarding tax modifications. I think most economist would agree any tax increases in 2011 and 2012 wouldn't be prudent, but I don't see how we can really address the debt problem unless we reduce spending (entitlements & military) and raise revenue. I'm not suggesting a 1-1 ratio of spending cuts - new taxes; maybe, 3-1 or 4-1 ratio of cuts - new taxes.

Again, I would like to hear (read) your thoughts on this issue.

Thanks in advance.

Tim White said...

10:52 (and everyone else)... all comments on posts that are more than a 7 (or maybe 10??) days old get moderated. So I'm publishing them now. Sorry. Been pretty busy down here.

Anyway.. if give me a link, then I'll try to read it and comment.

As for Buffett though, I don't particularly respect his economic views. I recently watched an interview with him. In it, he suggested that the only people that should be concerned about Bernanke's printing presses should be the Chinese because they have $1.15 trillion invested with us. I was shocked to hear him say that.

If inflation of the money supply (and decreased buying power) hurts the Chinese, then why wouldn't it hurt every other person who owns US dollars?... especially those Americans who are already living on the margins of society?

I know he's a smart man, but that comment seemed quite insensitive to working people.