You’ve made your bed…

I agree with Thomas Sowell’s latest column, High Risk, Low Yield, regarding recent Republican tactics. Especially this part:

The world is full of things that ought to be done but cannot in fact be done.

The time, effort and credibility that Republicans are investing in trying to defund ObamaCare is a high risk, low yield investment.

If I were Republican politician, I might say:

America, I hope Obamacare works out for you. But, if it doesn’t, remember, this is your own doing.

Soon, you may discover that Obamacare increases your health care costs and reduces quality and availability.

You may realize that you have less choice about health care than you did before.

You may find government bureaucrats have taken a keen interest in your personal health habits, to the extent you may feel violated and they may deem you not fit to receive priority care.

If you are bothered by any of that, you should consider who you voted for and why. If you want different results, perhaps you should think about voting differently and holding some frank discussions at the dinner table to help convince others you know to do the same.

A step in the right direction?

I’m open for opposing opinions, but at first blush the plan Obama outlined to change Fannie Mae and Freddie Mac seems like a step in the right direction.

Private investors take more of risk. Agree.

Fannie and Freddie lose the implicit guarantee of government. Agree.

While home ownership is good, affordable rental housing is also acceptable. Agree. Renting makes sense for a lot of folks.

Owning does too. You should have to prove you are responsible before owning, though. When people have a tough time getting a loan from a private investor to buy a home, those people should be encouraged to demonstrate responsible behavior.

The only part I had trouble with, so far, was that government would be secondary guarantor. That sounds like an explicit guarantee. Maybe I don’t understand that part.

But, again, a step in the right direction, no?

Could Obamacare be next?

In his speech outlining the plan, Obama quips that this plan will sound confusing for those that call Obama a socialist. For the record, I never thought he was a socialist. I just thought his view on the role of government was on par with public school sophomores. It’s not so much socialism, but the belief that solving problems can be easily accomplished by having government do something about it.

Jobs Report and Sequester Cuts

I watched the opening of SNL last night, which must have aired originally in February or March, because the first sketch was a President Obama impersonator explaining what will have to be cut from the budget due to the sequester.

My favorite mock cut was the astronaut who said they will no longer have visors in their space suits, so they’ll just have to hold their breath when they do space walks.

That also reminded me of a Wall Street Journal article (though I’m not sure is the original article that I read) this week that made a good point that the jobs report is pretty good a few months after the gloom and doom that was supposed to follow the sequester spending cuts.

(As a side note to WSJ.com editors, it is extremely tough to find an article that is more than day or two old. It’d be nice, especially for the opinion section, if you just had a calendar archive that listed links to the articles that ran on certain days.)

 

We get what we deserve

Here are some more on Obama’s remarks today from the New York Times:

“They [Republicans] will not collect a ransom in exchange for not crashing the American economy,” Mr. Obama vowed in the East Room, a week before his second inauguration. “The financial well-being of the American people is not leverage to be used. The full faith and credit of the United States of America is not a bargaining chip.”

And from the Washington Post:

In the final news conference of his first term, Obama said Republicans were threatening to hold “a gun at the head of the American people” and that he would not trade spending cuts, as Republicans demand, for an agreement to raise the federal debt ceiling.

“To even entertain this happening — of the United States of America not paying its bills — is irresponsible. It’s absurd.” He vowed that congressional Republicans “will not collect a ransom in exchange for not crashing the American economy. The financial well-being of the American people is not leverage to be used. The full faith and credit of the United States of America is not a bargaining chip.”

Now, I could address how ludicrous this is.

How, it reminds me of the type of fervent propaganda I learned about in places like the glorious\ Soviet Union.

Or, how these seem like mighty uncompromising words from a President who has bellyached a great deal about the other side’s inability to compromise.

Or, how dumb it is that the government has locked in a trillion dollar deficit, where they have turned a temporary stimulus spending level into the new government spending norm, where — after demonstrating abhorrent financial irresponsibility and avoiding making anything that appears to be a tough choice — they want an unlimited ability to write checks from ours’ and our children’s bank accounts.

But, I think we are well beyond all that. President Obama is becoming the classic example of we get what we deserve. 

And we’ll keeping getting it until we vote for adults who understand incentives that lead to prosperity, who can say no to special interests and balance a checkbook.

 

How Social Security can continue to be paid out without raising the debt limit

Here’s the New York Times reporting on President Obama’s remarks today:

“Treasury would be left to fund the government solely with the cash we have on hand on any given day,” he said, forcing it to choose among creditors, federal contractors, veterans,Social Security and Medicare beneficiaries and the many other claimants to federal dollars.

An enterprising reporter or Republican politician might do well to understand and point out what David Henderson has written on this topic here, where Henderson points to the Huffington Post’s debunking of the Social Security claim:

The Social Security Administration owns bonds that the U.S. Treasury has issued. To make up for a shortfall each month, the SSA could sell some of these bonds to the Treasury. But where would the Treasury get the money to pay for these bonds? By issuing bonds to the public. How could the Treasury do that if the debt ceiling is not raised? The debt ceiling includes the SSA bonds. So for every $1 billion the Treasury pays when the SSA redeems bonds, the Treasury could issue $1 billion in new bonds without affecting the official debt at all.

One part of the fiscal cliff

One part of the fiscal cliff is the US Government is again running up against its debt ceiling. That is, it is getting near the limit Congress has set for how much debt the government can issue to fund its overspending.

The debt ceiling was raised just last year.

In case you didn’t know, Obama’s gigantic flip-flop on this issue is well-documented, but not well-reported.

Then Senator Barack Obama voted against raising the debt ceiling in 2006 and spoke against it. Here’s the text from his speech (source):

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

Strong words. I agree with some of them. Especially the part about shifting the burden of bad choices (i.e. uncontrolled spending) onto the backs of our children and grandchildren.

President Barack Obama now calls his 2006 position a mistake (source). As his press secretary explained:

He realizes now that raising the debt ceiling is so important to the health of this economy and the global economy that it is not a vote that, even when you are protesting an administration’s policies, you can play around with, and you need to take very seriously the need to raise the debt limit so that the full faith and credit of the United States government is maintained around the globe.

Did you know about this? Imagine if a Republican had the same flip-flop. Do you think you would know about that?

Debt Junkie

I heard a sound-bite from President Obama on the radio this morning explaining how not getting rid of the debt limit is irresponsible because we shouldn’t put government in the position to default on its obligations.

A simple question that any news reporter should ask:

Mr. President, Wouldn’t it be correct to say that it’s government spending that has put the government in that “irresponsible” position?

Follow-up question: Wouldn’t it be irresponsible to continue borrowing to spend?

By the way, government debt is $15 trillion, which is 3 times the $5 trillion debt in place with W. took office and more than 50% higher than the $9 trillion when Obama took office.