Debt Crisis Looms, I’m Sleeping Well, Thank You

August 3, 2011

Note: Due to a server upgrade at a few articles were lost. They will be re-posted as we are able to recover them. The following article was originally posted July 29, 2011. Thank you for your support.

Somebody get President Obama a Whaaaambulance! The Washington Examiner reports that Valarie Jarret claims “He’s getting absolutely no sleep. He’s working tirelessly, meeting with his economic team, doing a lot of outreach, exploring all kinds of possibilities for compromise…”

Funny, I’m sleeping fine these days. Sure I watch my favorite political shows about he debt debate. I read the news and listen to what my Representative’s position is on this ‘crisis.’ I agree this is a problem and America needs to address it. Why am I sleeping fine? Well, is it a crisis? Will the short term solutions matter?

On the one hand, we are told that August 2nd is financial Armageddon if we don’t get something passed. Yet, this date has changed three times this year. The one truth I know about August is that Obama has plans to celebrate his 50th birthday with a lavish party on August 3rd with another long vacation planned at Martha’s Vineyard in mid-August. This (cough*)well-needed(cough*) vacation comes after another bungled “chicken little” moment. The prediction of world doom fell short as Judgement Day did not strike us May 21st. Harold Camping, owner of the Family Radio Network who championed this doomsday has revised his biblical prophecy to October 21, 2011. This time we will only perish by fire. Whew!

What do Harold Camping, the Obama administration, and Democrats have in common? They propagate scare tactics. Doomsday, financial ruin, racism, and old folks not getting checks and eating dog food are used to influence the masses through fear. Well, these tactics make me tired! And, at this point in history you either have to get your facts from Media Matters or Cameron Diaz to believe this meme.

The other argument for the urgency of raising the debt ceiling is that our credit rating is going to tank. We’ll be Greece faster than you can melt Crisco! This news comes to us from Moody’s, Fitch and S & P. The same group that endorsed the sub-prime market that crashed the housing market.

Wall Street underwrote $3.2 trillion of loans to homebuyers with bad credit and undocumented incomes from 2002 to 2007. Investment banks packaged much of that debt into investment pools that won AAA ratings, the gold standard, from New York-based Moody’s and S&P. Flawed grades on securities that later turned to junk now lie at the root of the worst financial crisis since the Great Depression, says economist Joseph Stiglitz…

Presidential candidates John McCain and Barack Obama lay responsibility for the carnage with Wall Street itself. The Securities and Exchange Commission in July identified S&P and Moody’s as accessories, finding they violated internal procedures and improperly managed the conflicts of interest inherent in providing credit ratings to the banks that paid them.


And this from

The ratings agencies business model is based on a flagrant conflict of interest — they’re paid by the firms whose credit they evaluate. That makes them vulnerable to pressure from investment banks and securities issuers, which naturally want a bullet-proof rating in order to attract investors.

In the years leading up to the housing bust, Moody’s, S&P and Fitch passed out AAA ratings like candy bars at Halloween. In mid-2007 and early 2008, with the real estate market in free-fall and mortgage delinquencies soaring, they suddenly started downgrading scads of formerly top-rated securities. In January of ‘08, for instance, S&P lowered ratings on more than 6,300 and 1,900 CDOs — in a single day. Then, the deluge. The bottom fell out of the secondary market for subprime loans, and the rest is history.


If Obama isn’t sleeping well he should look more into the rating agencies and their relationships than the threats of downgrading our credit rating. Think about it. They are telling us that to retain our AAA status we must raise the debt ceiling and borrow more money so we can endure $1 trillion a year deficits under the Obama budget without a sound plan on how we are going to pay our debt. Only in Washington can your baseline budget increase 8% every year! Try running that scam by Equifax or TransUnion for your personal credit score. I agree with Rep. Ron Paul (see I can agree with him *smile*) if the debt is the problem, how do you solve it with more debt?

No matter the outcome we are in trouble. We will face higher inflation and lower credit ratings anyway. Default will occur either because of increased debt or our debtors calling for their money. We cannot continue on this path.

Finally, it is a fact that monthly the government brings in enough money to pay our interest on the debt, pay social security, medicare and medicaid, our military and still have a small surplus. The problem is that we have numerous other entitlements and bills that we cannot pay in this case. In the prophetic words of Jimmy McMillan, “The rent is too damn high!” It is this entitlement society and get elected at any cost leadership that drives this type of deficit spending. And it needs to stop!

I was talking to a person this morning who said he would rather face several years of pain and austerity by learning how to live within our means so we are prepared as a country for the next one hundred years vs. continuing on this self-made path of financial ruin. And, this is why I am sleeping well, even if our President isn’t. I am resigned and prepared to take our lumps now, make the hard decisions to ensure our future as Americans. And, even if our weak-knee Republicans are too scared to take that plunge at least I know that I can sleep well knowing that I am prepared to suffer for this county we so love if it means a better future for our children.

Don’t get me wrong. The debt crisis is very real and very serious. Yet, without extreme cuts across the board, especially entitlement programs and social security/medicare/medicaid, the current bills our Congressional leaders and Obama are proposing are not worth he paper they are written on. Even more distressing is that they continue to use fear to manipulate the public. We the people cannot let them win! With resolve and purpose we can survive anything they throw at us – even if it is smelly! While Obama tosses and turns over another late night, I’ll be sleeping well, thank you. Good night, sleep tight!




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