Skip to main content

They are Taking Us for Fools

Congress decides how much money to raise for our public needs (taxes), and how much to spend.  It is easier to spend than to raise money, so sometimes we have to borrow to make things work.


We do the same things with our family budgets.  Even very frugal people, whose Calvinistic parents taught them to save part of everything they earned, borrow to buy a house, or a car, or get an education.  Sometimes we have to borrow to get enough to eat, or to keep the house warm in winter.  


IBM borrows money; perhaps twice as much as it expects to earn in a year.  But IBM knows that, in the longer run, borrowing is an astute thing to do.  Financial institutions borrow about fifty times as much as they earn in a year.  That might explain, a bit, the trouble they are in. Gambling with their investors money is a better explanation.  Derivatives, anyone?


The United States government takes in about $14 trillion a year, and our debt is also about $14 trillion.  That is a one-to-one ratio.  It isn't ideal.  We did much better under Bill Clinton, but it is understandable, given the stupidity of the Administration and Congress during the Bush years, which resulted in a terrible recession and banking crisis.  We are digging our way out.  


Congress does not just raise money, and spend money.  It has to authorize itself to borrow the difference, when it needs to.  That is called, "raising the debt limit".  Congress just authorizes itself to borrow to make up for what it has already decided to do.  If you get elected by chanting, "No new taxes!", and "Cut government spending!" (but know they cannot), the odds that you will find your financial arse in a sling are better than good:  they are certain.  


That is where we are.  About the only things left to cut are Medicare and Medicaid, military spending, and Social Security.  


Some members of Congress do propose to cut people off from medical care and social security, or to reduce it to howlingly awful levels.  Those are the same people who get good government health insurance, and glorious congressional pensions.  Most of the same people have no intention of cutting military spending.  As Mort Sahl said of the war in Vietnam, "It is a dirty, rotten, little war, but it is the only war we have got, so we ought to be grateful."


And as for raising taxes, which are, in fact, at the lowest level they have been for 60 years, they insist taxes should be cut even more, although perhaps not on ordinary people (where everything can be shifted to sales and property taxes).  They absolutely do not want to raise taxes on the filthy rich, who contribute to their election campaigns.


So here we are!  We need to borrow about a year's income.  Most of us who "own" homes have borrowed more than a year's income to do that.  And for our cars.  And tuition.  And wedding rings.  


Congress regularly raises the debt ceiling:  that is to say, authorizes itself to borrow the difference between what it already has decided to raise in taxes, and what it has already decided to spend.  In the last 50 years, Congress raised the debt ceiling about 75 times.  


We have an uncomfortable, but manageable debt:  about a year's income, in size.  But Congress is demagogueing.   Raising the debt ceiling is not a vote to raise taxes or to spend money.  That has already been decided, by Congress itself.  It is pretending, at best, or taking us for fools, at worst.  


I fear it is the latter.  They cannot believe we really want the nation to go into bankruptcy, can they?.  We know BS when we hear it.  


They are taking us for fools.  

Comments

Post a Comment

Popular posts from this blog

Friends-- My step-father of 35 years died this morning. His name was Conrad Royksund. He was 86 years old. He was born into poverty on a farm near Puyallup, WA. He was the first member of his family to attend college and earned a PhD from the University of Chicago. He paid his way through all of that by fishing in Alaska. He spent his professional career as a college professor. I met him when I was just 3 years old and don't actually have any memories of my life befor e he was in it. He was intimidatingly smart, funny as hell, and worked his ass off. He taught me to meet people with kindness and decency until I was certain they could not be trusted. He taught me to meet ideas with carving knives until I was certain they could. I will remember him as one of the bravest, most curious, and funniest people I have ever met. He left this world with a satisfied mind. We are so grateful. Dan Hubbard
1 comment
Read more

The Sea is Rising

Let us just step back:  two hundred and fifty years ago, or so, the ships of England and Spain had drifted onto a whole new continent, as they saw it, from far north to a savagely cold south; pole to pole, as if there were such things. Millions of people already lived here, some of them still hunters and gatherers; some of them very wealthy, indeed!  Gold and silver stolen from the southern Americas funded Spanish and English dreams. There was land, lots of land, under starry skies above, rich land, and oil and coal and iron ore.  The whole western world learned how to build industries not on simple muscle power, but on steam and oil.  We farmed, too, of course.  All we needed was cheap labor--slave labor from Africa, mostly, so the ships came with slave labor.  Chinese labor built railroad beds where there had been rock cliffs. Europeans, long used to killing each other for good, religious reasons, brought their religious savagery with them. ...
Post a Comment
Read more

That's all we want: fairness! Not more guns and more war! Fairness!

The five police officers who were killed in Dallas are certainly not the officers who killed innocent citizens. There is more than enough tragedy to go around. "What is happening to our country?", Mari asked this morning. I had no answer.  We do have an answer.  We do not want to say it. There are lots of answers, all of them pertinent. We are a racist society, like most human societies. We are a society in the midst of enormous changes-- social, political, economic--and we do not know what to do about it. We are divided unsustainably into absurdly rich, and an enormous number of crumbling middle class families, and poor. We have guns everywhere; military guns, guns just for killing people, cheap guns, heroes carrying guns into churches and supermarkets, idiots who think guns ought to be allowed in bars and schools and ball games and beauty parlors and political rallies. Our political process is almost useless. There are good people in Congress, but there...
Post a Comment
Read more