President Utilizing Media to Pressure
Republicans on Debt Ceiling
Let me first state that I am not a Republican or a Democrat,
or a Tea Party advocate; I just look at individual issues based upon their
merit. The issues and the right solution
is what is important to me, and not collective party ideology. But president Obama trying the same tactics
of negotiation in the media to frame the debt ceiling debate as the Republicans
being irresponsible, and not paying the Country`s bills is just media manipulation
at its finest.
This kind of tactic I find repugnant because yes I am an
American president Obama and I don`t agree with this tactic or the Democratic
stance on this issue. The Republicans wouldn`t have to resort to this kind of
negotiation if Democrats could ever be forced to cut any type of spending in
any other manner.
The Democrats just refuse to admit that there is a problem
that is at the critical stage, and it needs to be addressed now, even if the
country has to go into a recession to finally address the spending problem.
Just like Credit Default Swaps – The
Numbers just don`t add up Anymore
The numbers just don`t add up anymore, and this is our Jesus
Moment where we are AIG and we realize we need to sell a bunch of these credit
default swaps while we still can because if the market turns against our debt
portfolio even slightly in relative terms, the debt burden will take down our
entire country.
We saw what happened to AIG, well there is nobody to bail
out the United States. This is the last chance before interest rates and the
bond vigilantes awaken from their slumber and debt markets revert back to their
historical norms, and then we are AIG and it is too late.
The Democrats are the “Bad Guys”
here!
I will frame the debate in the other direction. Democrats
are irresponsible, and the Republicans already raised taxes and revenue, now
this is your turn to address spending. If you refuse to address spending in the
next month where you have had 5 years to cut spending and have refused then you
are the irresponsible party, dead wrong on this issue, and you are the bad
guys.
Winning Elections has nothing to do
with Leading a Country
I don`t care if you won the election with a 100% mandate, I
am sure the Greek politicians won all their damn elections as well. So stop
spouting this campaign rhetoric as it is irrelevant to the spending problem at
hand. We don`t have a tax problem, we have a spending problem. We never have a
problem raising taxes in this country, but we sure have a problem cutting
wasteful spending.
Personally, I doubt that the country`s spending issues and
debt constraints that will hit home 5 years down the line were really on the
voter`s minds while casting votes in the recent election. It is never on
voter`s minds until you get Greece style austerity programs, then it really
becomes on their minds, and guess what the Greek citizens still didn`t want to
cut spending even when their country was in default.
So relying on the voters to volunteer to cut back spending is
like asking a fox guarding a henhouse to tighten up security measures. It isn’t
exactly in the majority of the population’s interests since the majority
benefit from all this spending in the short term.
This isn`t a Republican or a Democrat issue as President
Bush sure was quite a spender during his 8 years in office as well, and he
wasn`t very fiscally responsible, and I don`t consider him a good president
from a long term fiscal thinking standpoint.
So I am just as hard on the Republicans on this issue as the Democrats,
and they need to do a much better job cutting back on Military spending which
has been in “Overkill” mode for the last 10 years.
Republicans Need to Start with Military
Spending Cuts
The Republican Party has positioned themselves as budget
hawks, but they have their own set of skeletons in the closet with regard to
excessive Military spending over the years that has contributed their fair
share to the federal debt of 16 trillion dollars and counting. Yes the United States needs a military to
meet any threats posed by our enemies, but the amount that we currently spend
versus the actual threats is just a waste of money.
I know that the industrial military complex as it were
provided jobs in areas of technology and research and development not to
mention an entire supply chain of components along the manufacturing process
for military weapons and logistical infrastructure.
But the problem is that net of taxes generated for the
nation versus costs to tax payers, military spending doesn`t pay for itself,
and is a net drag on the economy from an economic standpoint.
I know there are all kinds of areas where this country needs
to cut spending but Republicans can make the first move by offering up some
legitimate cutbacks in military spending to get the ball rolling in the
negotiations because the democrats are going to have to cut their
“untouchables” as well.
Both Sides Underestimating the Cuts
Needed
I frankly think that both sides are naïve in regards to just
how much legitimate cutting on spending they are going to have to do as the
numbers they are discussing are not even close to what is required. And with
Obama already pushing the idea of closing corporate loopholes in the tax code,
he and the democrats are still focused on the revenue side of the equation,
even after just winning on the revenue issue this past month. I guess they
still want more revenue, but I hope this is just an opening negotiation stance,
but if we are still negotiating over revenue issues in the debt ceiling debate,
then this country will be in default in 10 years instead of fifteen.
Maybe Now is the Time to let
Accountants Decide Spending Cuts
This is not a political debate, this is a financial
decision, get rid of the politicians and bring in the accountants and risk
managers. The politicians have had their chance to solve the debt problem, now
it is time to bring in the number crunchers and let them decide objectively
where to cut government spending.
This is now a business decision like AIG, and I am your risk
manager Mr. President tapping you on the shoulder telling you it is time to cut
spending. Just like a proper risk manager needed to tap the derivatives group
at AIG, and say you are overexposed here sell this percentage of the portfolio
of credit default swaps throughout the remainder of the next two months.
President`s Legacy
I am your accountant Mr. President, and I know you are proud
of how many votes you just won an election by over the Republicans.
Congratulations are in order, now Mr. President the numbers don`t add up, and
you just raised taxes, so now you have to cut spending by this amount or we
declare bankruptcy in fifteen years. Do you understand this Mr. President? Do
you follow what I have laid out here?
Our option is spending cuts or bankruptcy, sure Mr.
President we can raise taxes some more, but it is only a stop gap measure. The
only real way to solve the escalating budget debt problem with the country`s
future debt obligations is to cut spending by a massive amount Mr. President.
Yes I know you will be out of office when the country
defaults, but is this what a responsible president would do? Are you a responsible
Individual? As your risk manager cutting spending is the responsible way to
begin solving this problem Mr. President. In fact, it is the only way or we
default on our debt obligations in fifteen years.
Republicans: Right on this issue!
Now we need to stop campaigning there are no more elections
for you to win, the Republicans may indeed be bad guys, but on this issue they
are actually good guys. I don`t even care if they are addressing the issue
because of purely selfish reasons. I don`t care why, but I am your risk
manager, and you need to cut spending it is the only course of action that is a
viable option after just raising taxes.
I don`t believe Democrats could cut
Spending even if Default Occurred
Remember, the only reason the republicans have had to resort
to these type of tactics if that the democrats will literally never address
spending cuts. The United States will be in default a la Greece, and they still
wouldn`t enact austerity programs. They just cannot stomach spending cuts even
if the country has to default, they literally don’t seem to care.
This is how much this party lives by spending. The Democrats
are the habitual spender who maxes out all the credit cards, and keeps on
shopping till they are literally all declined. That is the only way they will
ever cut spending. The Democratic Party needs some counseling on spending. They
need to take one of those debt management courses, and have their finances
managed by a third party via a court appointed process.
Even when the president is trying to frame republicans as
bad people, he still can`t even help but show his true colors and the party’s
true colors by dropping little hints that they are not serious about addressing
any legitimate spending cuts.
Popularity versus Leading
Sometimes Mr. President, one has to do the unpopular thing,
if it is in the best interests of the country. This is the AIG moment, get your
act together, and lead. This is your AIG or Greek moment and you’re failing miserably,
and going to go down as the President who sent the country into unsustainable
default territory a la Greece.
This is where we are headed right now, and you will get blamed
for this lack of fiscal discipline, regardless of how much President Bush spent
on Defense Spending because this is what your tenure is being defined as the “Spending
President”.
Every Spending Program needs to be on
the Cutting Block
Now is the time, to get serious from both sides of the
aisle, and this means cutting wasteful military spending! But just because the
Republicans need to cut defense spending, doesn`t mean you are off the hook
Democrats.
We are going to need much more significant cuts to the
budget than either side is proposing currently as the numbers even with
aggressive spending cuts being talked about today, are just not going to solve
the problem. They are too small, relative to future obligations even under this
low interest rate environment.
Just today the Social Security Administration reported that
by 2033 they will run out of money, enough is enough you are the president of
the United States; you are not there to do the popular thing, but the right
thing.
I am sure that Greece politicians were elected by the
majority as well, and they had prescription drug plans that the country
couldn`t afford. Guess what, they really couldn`t afford them, and a bunch of
other governmental obligations that the country just couldn`t afford.
Definition of Irresponsibility
We are on the same path as Greece, and you need to recognize
that being a true leader is not doing the popular thing but the right thing
with regard to fiscal responsibility. Not spending within your means is the
irresponsible act here, not balancing the budget is the irresponsible act here,
continuing down the same path as Greece is the irresponsible act, and not
addressing spending cuts in the next month is the irresponsible act.
Risk Manager is a Thankless Job
I am not asking you to cut spending, Mr. President, as your
Risk manager I am telling you to cut spending now as the only viable option in
solving this government debt to GDP issue. That is the problem with risk
manager`s, when the problem goes all the way to the highest levels of power
within a corporation, i.e., AIG, Greece, and MF Global, nobody ever listens to
the risk manager. The position never carries enough power when mismanagement is
at the highest levels of government or business.
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