Obama debt, disaster and deceit … are always looming

Professor of fiscal irresponsibility, Obama, enlightened us in his press conference:

    “So let me explain this. If Congress refuses to raise what’s called the debt ceiling, America would not be able to meet all of our financial obligations for the first time in 225 years.
    And because it's called raising the debt ceiling, I think a lot of Americans think it's raising our debt. It is not raising our debt. This does not add a dime to our debt.
    It simply says you pay for what Congress has already authorized America to purchase, whether that’s the greatest military in the world or veterans’ benefits or Social Security. Whatever it is that Congress has already authorized, what this does is make sure that we can pay those bills.
    Now the last time that the tea party Republicans flirted with the idea of default, two years ago, markets plunged, business and consumer confidence plunged, America’s credit rating was downgraded for the first time, and a decision to actually go through with it, to actually permit default, according to many CEOs and economists, would be — and I’m quoting here — “insane, catastrophic, chaos” — these are some of the more polite words.
    Warren Buffett likened default to a nuclear bomb, a weapon too horrible to use. It would disrupt markets, it would undermine the world’s confidence in America as the bedrock of the global economy, and it might permanently increase our borrowing costs which, of course, ironically would mean that it would be more expensive for us to service what debt we do have and it would add to our deficits and our debt, not decrease them.
    There’s nothing fiscally responsible about that. Preventing this should be simple. As I said, raising the debt ceiling is a lousy name, which is why members of Congress in both parties don’t like to vote on it, because it makes you vulnerable in political campaigns. But it does not increase our debt. It does not grow our deficit, it does not allow for a single dime of increased spending. All it does is allow the Treasury Department to pay for what Congress has already spent.”
More Washington Post

So let’s review. Raising the debt ceiling does not add a dime to the debt, but not raising it adds to the deficit and debt. Got it? He can see how increased borrowing costs add to our debt; but raising the debt ceiling — because we are right up against it — does not add anything to debt. Nope.

Gross
Federal Debt
Debt Held
by Public
Debt Held by
Federal Reserve
FY 2014* $18.2 trillion $11.6 trillion $1.6 trillion
FY 2013* $17.2 trillion $10.7 trillion $1.6 trillion
FY 2012 $16.1 trillion $9.6 trillion $1.6 trillion
FY 2011 $14.8 trillion $8.5 trillion $1.7 trillion
FY 2010 $13.5 trillion $8.2 trillion $0.8 trillion
FY 2009 $11.9 trillion $6.8 trillion $0.8 trillion

How many times have we increased the debt ceiling under Obama? A few now. Why? I suggest the debt ceiling has been raised many times, over time, which allowed the debt to rise. How else could the debt have risen above the ceiling ? So why, then, do they always link hitting the debt ceiling with default — if they are not going to add to the debt?

    Government debt in the United States has steadily increased from $2 trillion in the mid 1980s to over $17 trillion today. But as a percent of GDP it has grown from 55 percent to over 100 percent of GDP today.
    In the Crash of 2008 government debt increased sharply to bail out the banks and to provide “stimulus” to the economy. Debt reached 104 percent of GDP in 2009. But debt is expected to plateau at about 122 percent of GDP in the next few years.

But maybe in Obama’s world the GDP could be just shrinking that much.

 
Then he closed his box of tricks with this:

Now, the good news is… Our housing market is healing; we’ve cut the deficit in half. Since I took office, the deficit is coming down faster than any time in the last 50 years.

He has some real sophistry working there. Note he is talking about the “deficit” now. So if the budget deficit beginning in his first term was running all time highs, then he has decreased it from that level. Gee, see isn’t that great?

If its so great then why do we have to keep raising the debt ceiling again and again?(and probably again in the near future.) Could it be that we were so far beyond budget limits that anything short of that looks like a big improvement?

Source: http://www.usgovernmentdebt.us/ 

The Two-Step Economy

Tiptoe through the tulips with me.-(Tiny Tim)

 


All of lamestream zoomed in on the unemployment rate dropping below 8%. Media is hailing it everywhere as a solid sign the economy is getting better. (so it has less tumors than it had last month) Proof that its on the mend, so they say. Forget Obama’s failures which are not adding jobs or promise to this economy. I am no economist or scholar, but you don’t have to be to see some trends.

I’ve been watching the to and fro of this economic rollercoaster we’ve been on. How many times has the groundhog stuck his head out of the hole to call for an early spring? (Punxsutawney Phil would be delirious) Whenever there is moderately decent economic news, and wall street follows suit, they said we are on the “road to recovery”.

And there are certainly political reasons they want to wish it better. Contrary to what the lib-progs think, no one is hoping for doom and gloom. No one wants to talk it down. Don’t confuse warnings for wishful thinking. They don’t have to, if the recovery was real you would feel it.

However, there sure are people who want to talk it up. That is very evident. (Jack Welsh wasn’t entirely wrong) But they miss the point. Virtually every time I hear good economic news, I see the price of oil jump, gas and fuel follows. Its been doing that for a few years. I don’t think you need to validate it with a chart. It happens. We get no relief for the oil prices which doubled in Obama’s term. If we project it out, it could triple in his second term, if we see any economic growth. My guess is as good as anyone’s, since that is the direction its been heading based on good news, up.

So that tells me that the other shoe is bound to drop. Sure the Dow may rally on this bit of good news. But then the other shoe will slam to the ground. When it does, oil will shoot up again – call it another gusher. It does that as reality sets in to people that we aren’t “healed” yet and we do not have much to be “confident” about. As far as I can tell, it isn’t really a decent economy until people feel it. They can’t fool and fake people on that. (Hey Jed, let’s move to Beverly Hills…NOT)

Energy is sucking the life-blood out of the economy, but they will parade around the gusher saying we’re on the rebound with oil right in the middle of their celebration. ‘We are on the road forward, and don’t look back’, we hear. When it does shoot up, the economy takes a deep breath and seems to crawl back in its hole. That’s what I’ve seen in this term. There are plenty of reasons they can justify it with from the ME to China to closing coal supplies. There are a plethora of excuses they can make. But it will still have a negative effect on the economy.

So they can tout the below 8% record-breaking trend on unemployment. But there is always room for new record highs for oil. And there will be no shortage of the reasons for it.

Washington wish-mongers may be in denial but the rest of America is not. That is on top of inflation and prices of everything from food to clothing on the rise too. They should feel more like tiptoeing when shouting “recovery!”