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FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Your Guide Through the Washington Debt Speak

Politics / US Debt Jul 28, 2011 - 09:30 AM GMT

By: LewRockwell

Politics

Best Financial Markets Analysis ArticleBrian Wilson writes: Another "Al" once wrote: "A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by dictatorship. The average age of the world's greatest civilizations has been 200 years." ~ Alexis de Tocqueville


Sans the olives and goose from my last TV Endurance Run (The Jack Ass Show) I flipped on the shadow box and was treated to Obama's latest attack on the Republicans. During his delightful abuse of the English language and rape of the Truth, it dawned on me we needed some kind of "catalog of definitions" to sort out all the lies. This debt debate is like a boxing match where the referee has brass knuckles and a serious grudge against one of the contestants. Even the pundits who aren't in the tank for Obama are accepting false premises.

"As long as people believe in absurdities they will continue to commit atrocities." ~ Voltaire

Default – Default has replaced "not raising the debt limit" in the debt debate. There is no discussion of how the government could service its debt and meet other obligations without borrowing more money. Instead, we are assaulted with wild tales of heinous disasters brought on by defaulting on the US debt.

Revenue – Revenue has replaced the word "taxes." People understand raising taxes means taking money out of their wallet. Increasing revenue sounds as if the government is out earning an honest buck. Revenue is doubly disingenuous because the tax increases are not about getting more money but rather getting the Republicans to betray the people who elected them. Obama desperately wants another Bush "read my lips; no new taxes" moment.

Cuts – Inside the beltway, anything less than a 10% increase in government spending is cut. A 7% increase is a drastic cut; 5% increase is a massive cut. When cuts are expressed in dollars, it is "over 10 years." So a trillion dollars is really $100 billion or $84 billion. Even then, none of the cuts happen this year; cuts are in the "out years." "Out years" being years when the politician plans to be "out of office." Meanwhile, the Debt will just keep on keepin’ on. just keep on going up.

Social Security – The threat to delay social security checks is a case of "Were you lying then or are you lying now?" Al Gore told us all the social security money was safe in a lock box. If there is a lock box full of social security money in Washington, why does Obama need to borrow money to send out social security checks? Which brings into question all the threats against entitlement, defense spending and debt service which are 63% of the budget. The deficit is 40% of the budget. Obama is really only 3% short on all those bills he claims he may not be able to pay. (NB: key weasel word – "may").

Discretionary Spending – Discretionary spending is 37% of the budget. This is "walking around" money; politicians pocket change to buy votes. Discretionary spending is 93% of the deficit but it isn't mentioned in the debate. This is a lie by omission.

Shills – Shills are people who support Obama's debt limit agenda but pretend to be honest, independent brokers. The primary source of shills is TV. TV pundits and reporters alike use the lies catalogued here to convince the American public to allow the government to tax and spend them into oblivion and – say it with me – Doom.

Rating Services – Moody and S&P are shills. They are regulated. They owe their continued existence to Obama and his Regulators. They lied about the value of mortgage securities and now they're making phony threats to lower the US credit rating.

"We'll be living high and wide." ~ Theme from Rawhide

Obama – Obama is the single greatest source of lies in this freak show. He misrepresents what he says behind closed doors. He misrepresents everything that happens in the closed sessions. He lies publicly about his motives. He lies about paying social security checks. He lies about an economic recovery. He even lies about the lies he has told already.

The Market – The shills lie about a market meltdown. At this point, the market is so disconnected from reality no one knows where it is going or why. (See also Meltdown, Thomas E. Woods, Jr. for definitive information)

Compromise – This lie is so old, they have to bring it out in a wheelchair. If the Republican don't give in to the Democrats demands, it's because they won't compromise. Surprisingly, this has always worked in the past. According to Guinness*,"holding out for over a week" is a new record for Republicans. *(Guinness the stout, not the List) Offers – Offers are how Obama lies during negotiations. He is open to $4 trillion in cuts. The "What" and "How" are never explained. Obama just goes on Prime Time TV and says "the Republicans won't compromise." Pundit prattling ensues to round out the hour… "We return you now to our regularly scheduled brain candy…."

Balanced Approach – This is the focus group tested version of "shared sacrifice." It sounds much less painful but actually just the same old Democrat song and dance of tax and spend. Imagine Obama going on TV and saying, "80% of the American people want us to tax and spend out of this debt crisis."

If the Republicans haven't caved by this weekend, all hell will break loose. Spending is Washington's power. They can't afford to lose this battle.

So how did a routine vote to increase the debt limit turn into political Armageddon? It starts with the Tea Party Movement. The original complaint about taxes, lead to spending and on into the debt limit. By the 2010 elections, debt limit was on the political radar.

So along comes the "routine debt limit vote" and the Tea Party representatives make some noise about it. The Republican leadership thought a little TV wrestling, make a phony spending cut deal and the hicks will fall in line. The Democratic leadership said, if we have to get out of our comfy chairs to fake a fight, why don't we make it a really big phony spending cut and add a tax increase. In 20/20 hindsight, this is the point when all parties concerned wish someone had suggested, "Hey! Why don't we just combine our votes and cut the Tea Party Poopers out of the picture!?" Sadly for good ole BAU (Business As Usual), no one did.

The Democratic base blew up over threats of entitlement spending cuts. The Republican base was unimpressed by the velvet language of "revenue enchantments." Suddenly, instead of a few redneck Tea Party chuckleheads, leadership was facing a palace revolt by everyone not in a safe district looking at reelection in 2012. The leadership of the two parties is reduced to having Obama come on national TV and beg for Compromise and Balance. (See above).

Whether political miscalculation or the fickle finger of fate, leadership is screwed. The Republicans won't raise the debt limit without a spending cut. The Democrats won't accept a spending cut without a tax increase. The Republicans won't accept a tax increase. Leadership can threaten congress critters (see Steve "Tigger" Wu) and scare the B. Jesus out of the taxpayers. When the taxpayers believe their only options are lose some or lose all, they will beg for an increase in the debt limit. (Current Las Vegas Line: next Tuesday)

Keep an eye on Obama. He is going to push Stupid to new depths.

Brian Wilson [send him mail], nationally ignored talk show host and occasional LRC un-indicted co-contributor, is currently annoying miniscule audiences in a number of markets from his technically challenged studios safely outside the dictatorship of Toledo. Brian may be endured from 3p–6p at www.wspd.com.

http://www.lewrockwell.com

    © 2011 Copyright Brian Wilson - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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