Debt plan analysis

The CBO has scored both Harry Reid and John Boehner’s plans.  Since the CBO couldn’t find reality with a really big map, I offer the cliffnotes.

Potay-toe, potah-toe.  No significant difference between the plans , and no apparent competency for actually solving the deficit problems, which is par for the course in our one-party clown parade.  Both plans can be summed up with, “We want to keep doing what we’re doing, win the next election, and hope to God you aren’t sharp enough to cotton on to our shenanigans.”

Boehner’s plan adds just enough to the debt ceiling that we’ll be having this fight all over again next year, in plenty of time to have an effect on the 2012 elections.

Reid’s plan adds enough to get us through the elections so Obama’s candidacy won’t be blemished by nasty talk about deficits.

Both plans use 7% annual GDP growth in their calculations.  Long-time readers know my opinion on that, it’s ground I covered immediately following the passage of Obamacare.  In short: crock of shit.

Reid claims to cut $2.7 trillion over ten years.  CBO says it’s actually $2.2 trillion.  But Emily, you cry, two trillion is a lot of money!  Yes.  To you or me, two trillion is a lot of money; to the government, it’s $55 billion a quarter, which is a rounding error to an entity which spends 3.7 trillion every damned year.

Besides (and now we get to the meat of the issue… om nom nom) neither Reid nor Boehner are actually cutting sweet FA from the budgets.  Both plans count $1T in “savings” from drawing down the wars in Iraq/Afghanistan/Libya/wherever else we’re at war, I haven’t checked the news in a whole two hours.  We were already going to draw down those wars at some point in the next ten years.  Bugger that anyone who has ever had a checking account knows that saying, “I plan to NOT spend money later that I wasn’t going to spend anyway.  There, budget problem solved” is Funny Math.

And then they take that “$1T saved” and calculate the interest we might have incurred if we had spent it, which we never planned to but that’s not the point.  And they add that “saved interest” to the total.  See how easy it is to cut $1.3 trillion from the budget over ten years?

Huffington Post reports that both plans implement a Super Special Improved For The Children Congress, which I have not yet confirmed and you should take with a grain of salt (Mitch McConnell of Kentucky and Harry Reid, the bi-partisan spawn of Satan, did sponsor such a bill though).  I do not approve of this fuckery.

But I digress.  Back to the debt plans.  They cut nothing.  They enable huge deficits we cannot finance indefinitely – and since Moody’s and S&P are threatening to downgrade the US, we may not be able to finance next month, never mind next year.  It’s all looking very Greek.**

I cannot help myself, and since I’ve got a better track record than most Harvard-educated economists in the media, I feel fully justified in making a prediction:

There will be no deal.  On Aug 2, we hit the ceiling and have to operate off current available revenues only.  Obama pays the bills selectively, for maximum media impact.  We’ll see a parade of grannies and young, attractive Army wives on the news, sobbing about how they can’t pay their bills.  after three weeks, the unwashed masses will be howling for an increase to the debt ceiling.

In the meantime, the DOW tanks slowly but surely.  More middle-class wealth is siphoned off.  The banksters buy in at the low, immediately before Congress announces that, Happy Day!, they have reached a deal.  The rating agencies do nothing.  The next six months is second verse, same as the first, a little bit louder, a little bit worse.

Finally, debt ceilings explained, for your amusement.

**In the fiscal policy sense, my gutter-minded lovelies.  Although that analogy works as well.

Published in: on July 27, 2011 at 12:26 pm  Comments (7)  

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7 CommentsLeave a comment

  1. You’re spot on with this. We’re moving to our land in the country as soon as we can (probably next year). I think the time for thinking about the deficit and government policies is over. It’s bankrupt intellectually and financially. Only when Congress and the Presidency return to the fiscal behavior of the 19th century will things get better.

    • I’ve got a whole plethora of quotes for this occasion.

      “The trouble with socialism is eventually you run out of other people’s money.” ~ Margaret Thatcher

      “”Those who rob Peter to pay Paul will always have the support of Paul.” attributed to George Bernard Shaw.

      It isn’t too late, mathematically speaking. The trouble is, we have no political will to get the job done. And, there’s so much behind THAT it might as well have it’s own blog post, so I’ll do that later.

      Kudos for moving out to your own land. The only sensible option, IMO.

  2. And I’ll be closer to you (about 60 miles from Corpus). So it will be doubly good. XO

    The cuts will happen, but they’ll be involuntary and unmanaged and that much more painful. Like the difference between cutting back on eating out and getting thrown out of your house.

  3. You can come practice shooting with me any time. I’ll swap you tips on how to garden, dehydrate produce and cook from home storage. (I’ve got some tasty recipes. Ask Brandy.)

    Exactly. They plan to ride this fucker over the cliff. Which is, y’know, dumb, but whatever.

  4. Ride it over the cliff? It’s already over. It just hasn’t hit bottom yet. Kind of like Wiley Coyote and the Anvil…

  5. Yes, I’d like that. We’re going to have a huge garden as we’ve got over 200 acres to play on. We’re big canners already. It all sounds like good work and fun.

  6. […] a recent post, Debt Plan Analysis, I ventured a prediction.  Let’s see how that worked out. There will be no deal.  On Aug 2, […]

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