The American federal government remains shutdown, and while the shutdown may have started over Obamacare and Continuing Resolutions, there are now many more issues being discussed including the debt ceiling. The President and the Democrats have tried to make this government shutdown hurt as much as possible by closing lanes on highways to avoid people seeing Mount Rushmore, targeting private companies who operate on public lands. However by far the most disgraceful actions by the Democrats and Obama have been directed at the military and especially the World War 2 vets.
Last week President Obama decided to raise the stakes in this shutdown when he gave an exclusive interview to CNBC (the financial market part of NBC) and he spoke about the risks of an America default if an agreement on the debt ceiling was not reached, but this had very little influence on the markets. This either means President Obama has very little influence on financial markets and has lost ALL credibility or America’s financial markets are stronger than EVERYONE thinks. With an economy consisting of 7%+ unemployment, $3+ gas, $17 trillion national debt and a fed that continues to buy debt at the rate of $85 billion a month, it is highly unlikely the economy is strong.
While the President actions were disgraceful, last weekend the Speaker of the House John Boehner decided to join in on the political games of Russian Roulette with the President as admitted in an interview with ABC that America is on the path to default. This is not only disgraceful, incredibly irresponsible, it is also A LIE!!!!! I want to break down why in as much detail as possible.
In fiscal year 2014, the federal government is predicting the following:
|Annual||Average Monthly Amount|
|Income (Taxes etc)||$3 Trillion||$250 Billion|
|Spending||$3.8 Trillion||$316.667 Billion|
|Deficit||$800 Billion||$66.667 Billion|
(Side note: Know what a trillion looks like – $1,000,000,000,000 WOW!!!)
To make this easier, I am going to use the monthly figures which are on the right. In an average month the federal government will have around $250 billion in incomes to spend how it sees fit. Currently the federal government breaks down spending into 3 sections:
- Debt Spending (6%)
- Mandatory Spending (64%) (e.g. Social Security and Medicare etc)
- Discretionary Spending (30%) (e.g Military and government etc)
In an average month, these percentages break down into the following amounts. Debt spending averages $19 billion, mandatory spending averages $202 billion and discretionary spending averages $95 billion a month. Unless economic laws are no longer applicable to Washington (insert smart remark here), $250 billion is still a lot more than the $19 billion needed to service the debt in an average month. Unless that drastically changes, America is not statistically close to a default. Pure and simple if America defaults on its debt now or in the near future, it will be because politicians like Barack Obama or John Boehner have decided spending is more important than paying the debt and anyone saying otherwise is FLAT OUT LYING TO YOU!!!!!
I hope the America people realise this and DEMAND more honesty and integrity from their politicians REGARDLESS OF THEIR PARTY AFFLIATION. While it is a lot harder to hold Barack Obama to account because he is in his second term, politicians in Congress will face re-election one day and I hope you never forget. Ideally Speaker Boehner should be held accountable and forced to resign over these disgraceful comments because we have all seen what a debt crisis looks like from places like Ireland and Greece. However it is welcome news that he will have a primary next year. (Check out and please support www.jdwinteregg.com ).
So what happens in a couple of weeks if the Debt Ceiling is not agreed? The answer is very simple. America will no longer have the ability to borrow and will have to live within its means and spend only as much as it takes in. In an average month, after America has serviced its debt, there will be $231 billion left to spend between both mandatory and discretionary spending.
One of the biggest problems facing governments all around the world including America is easily addressed. They have forgotten how the average family lives on a daily basis and how they run a budget. I believe that Governments are a necessary evil and would run a lot smoother if they operated like a family. But what does this mean?
It can mean different things to many people, but simply put I believe governments need to understand the difference between a WANT and a NEED. We all want things ranging from a holiday, to an expensive meal out to a brand new IPAD but sometimes these are not possible. However if you are in government, you simply borrow and force a future generation to pay for anything you want and spin it all in compassion. These actions are not only wrong and immoral, they are the furthest thing from compassion and need to be stopped straight away.
Lastly, you are going to hear a lot of political spin over the next few weeks from both democrats and republicans over why raising the debt ceiling needs to happen. I believe a failure to raise the debt ceiling would be a great opportunity for America to firstly identify all the problems, have a national debate on your priorities and then finally how to address them. What issues am I talking about? I think all spending should be open for debate but I will point out a few below and let you think about them and please comment below.
- Why does America continue to send aid to the majority of countries in the world especially countries that do not appreciate it, that are aggressive towards America and burn the American flag?
- How can America fix social security and get it on sound financial footing?
- Despite no respect for American immigration laws, why are illegal immigrants able to receive welfare and PAY NO TAXES.
- What do Americans think of spending on food stamps and why has that program exploded over the last 5 years?
- When a country is $17 trillion in debt, why do you add a monster called Obamacare?
These are only some of the questions that need to be asked. I could have included items such as government and public sector pay, the role of the fed, student loan programs and many more. I believe that if this Congress and President reach an agreement to raise the debt ceiling, it will only kick the can down the road and no American citizen wins under that scenario.