Saturday, August 6, 2011

Things I STILL Do Not Understand: The Debt Ceiling 'Deal' (Part II)

"Let me be clear, there are things in life which I simply do not understand. Perhaps I do not understand certain concepts because they defy logic, or perhaps, more likely, other people who understand them less than I do - keep trying to explain them to me 'incorrectly'..."
-- Mike Kane 08/03/2011

I've been listening to the TV and radio for the past week trying to get a handle on the whole 'Debt Ceiling Deal' thing. After five days of almost constant-exposure to the 'Smartest People' in the room pontificating about the deal, I have still MORE questions than I did yesterday. Some go back to BEFORE the deal, some DURING the deal, and a few AFTER the deal.

Not wanting to over-burden my already-pounding head, let me ask my questions in no particular order - if you have answers to any of the following, please chime in, if these you leave you scratching your head too, well, I'm sorry...

Question 1: Treasury Secretary Timothy Geithner told us that August 2nd was the 'Absolute Drop-Dead-Default-Date' to getting a deal together to avoid a technical DEFAULT of the Federal Government. The original first-ever 'Absolute-Drop-Dead-Default-Date' was May 16th, as outlined in my original post: Raising the Roof, Or 'Lowering the Floor'?

Luckily for us, the Obama Administration (working diligently with the Treasury, SEIU, and Martha Stewart's Tax Advisor), FOUND '$136 BILLION' between the White House couch cushions resulting in the date being pushed back to early August.

So I guess what I'm really wondering is this: Was August 2nd a REAL date, or merely a Marketing Ploy to scare the Bejesus out of old people, the sick, the handicapped, and the un-informed? I'm thinking that it was a scam, but hey, what do I know? If YOU know for sure please get back to me so I can let the President know the next time I'm at the White House helping him look for change in the couch.

Question 2: Moody's and the folks at the S&P told us that the US Government would need to SLASH spending by about $4 TRILLION to keep its AAA Rating. I wasn't GREAT at Math, but isn't 2.4 LESS THAN 4.00 TRILLION?

UPDATE: Friday evening Standard & Poor's lowered the Nation's credit rating to AA+

Ah, nuts, I guess somebody over at the S&P was even better at Math than I was. They KNEW that the 'promise' of a $2.4 TRILLION reduction in debt over 10 years is LESS than an ACTUAL $4 TRILLION immediate reduction in Government Spending...

And, per the article 'linked' from the 'Update' line above:
"S&P said that in addition to the downgrade, it is issuing a negative outlook, meaning that there was a chance it will lower the rating further within the next two years.

It said such a downgrade to AA would occur if the agency sees less reductions in spending than Congress and the administration have agreed to make, higher interest rates or new fiscal pressures during this period.

S&P first put the government on notice in April that a downgrade was possible unless Congress and the administration came up with a credible long-term deficit reduction plan and avoided a default on the country's debt."

You can read the entire article: HERE

Question 3: The President, Harry Reid, Timothy Geithner, John Boehner, Mitch McConnell, Nancy Pelosi, Jerry Lewis, and "Babbu-The-Lizard-Boy" each told us that if we did not resolve the Debt Crisis Dilemma by August 2nd that there would be a profoundly negative impact on US and World Financial Markets.

Let me be the first to say the following:


If they didn't come up with this last-minute-bipartisan-bit-of-horse-pucky, can you IMAGINE what would have happened to US and World markets?

Can you imagine how WORSE IT COULD HAVE BEEN!?!?!?!?!?!?

In case you've spend the last several days sleeping under a bridge abutment, let's recap the excellent financial results following the landmark legislation that 'we-just-had-to-have':

The Dow Jones Industrial Average finished up 60.93 points, or 0.54%, to 11444.61. For the week, the blue-chip index finished down 698.63 points, or 5.75%, its biggest weekly point drop since October 2008. It has dropped 9.75% over the last two weeks and is down 1.15% for the year. -- Wall Street Journal Online, August 5, 2011

So, I'm wondering, if Congress didn't have an arbitrary timeline, the President didn't freak out old people, the sick, the dependent, and squishy-minded Americans who believe that ALL GOOD comes from Government, given the legislation more time AND honest negotiation, would Congress have been able to exorcise the 'really bad aspects' of the recently-passed Debt Limit Increase? Or, would US and World markets have been impacted LESS negatively as they were FOLLOWING passage of the 'Deal'?

Remember, this 'deal' was supposed to SAVE us from 'Gloomy Financial Uncertainty' - right?

But wait - oh, there's MORE!!!

The Standard & Poor's 500-stock index edged 0.69 point, or 0.06%, lower to 1199.38. For the week, it finished down 7.2%, its biggest percentage drop since November 2008. The index is down 10.83% throughout the last two weeks.

The Nasdaq Composite Index tumbled 23.98 points, or 0.94%, to 2532.41. The technology-oriented index slumped 8.13% this week and is down 11.42% over the last two weeks. Source: Wall Street Journal Online

Question 4: IF, big 'if', (but better than a big 'butt'!) you are the President of the United States and you KNOW that hard financial times are coming, do you:

a.) Form a bipartisan committee to recommend how to best weather the impending financial storm?,

b.) Form a bipartisan committee to recommend how to best weather the impending financial storm and play 70+ rounds of golf in your first two & a half years in office?,

c.) Form a bipartisan committee to recommend how to best weather the impending financial storm, play 70+ rounds of golf in your first two & a half years in office and THEN disregard the recommendations of the bipartisan "National Commission on Fiscal Responsibility and Reform" LEADING into the financial mess we find ourselves in today?

or, do you

d.) Do an exclusive interview with 'Tiger Beat' magazine?

The answer, of course, is... [DRUMROLL]

No, just kidding.

But you almost bought it for a moment, didn't you? I mean, it COULD have happened, right? Unfortunately, it's not real - it's a gag.

More unfortunately for the country, the actual answer, of course, is 'C' - which can best be summarized as follows:

a.) Form a committee to reduce government waste
b.) Golf 'a lot'
c.) Ignore the committee's recommendations
d.) Blame it all on Bush, Japanese Tsunami, Arab Spring, and oil prices

Question 5: Republicans, in their 'Pledge to America', promised to provide 3 days of review for any Bill in the House prior to its being brought up for a vote. In violating their own stated promise to the American People, they have shown a lack of commitment to their not just Republicans, but all Americans.

Let me ask you this, who's more at fault for this - President Obama, Congress, or the Treasury for creating the 'crisis' to begin with, or Speaker of the House Boehner for not sticking to his campaign-based principles?

My opinion? Boehner 'screwed the pooch'. When you negotiate from a position of weakness, you take shortcuts, you make 'easier' decisions. You get what you deserve.

We, the People, deserve better.

If you have any answers to the above inquiries, toss them in the Comment section below - I'd like to know what you think..

I fear that many in our Nation have more questions than they have answers. This holds especially true for the man currently sitting in the White House. Maybe the President can start asking US what we do when our household is spending more than it takes in?

For this, yes, I believe we have many 'answers' for him.

If only the man would ask someone other than a Nobel-Prize-Winner for an answer from time to time?

Actual 'Made-Up-Seconds-Ago' Example: When President Obama needs to know what time it is -- he asks one of his 'Nobel-Prize-Winners' how to deconstruct and then reconstruct a watch using only 'Green Technology' and the power of his 'Awesomeness'.

For the love of God! Someone, please, from now on when he asks what time it is, tell him the following:

"It's just after midnight, Mr. President. Get some sleep now... You've got 16-holes in the morning."

Speaking of time, it's time for me to chase dreams into the night...

I do well with dreams. Sometimes waking up is the nightmare.


Grumpy Note:  It seems Tim Geithner didn't understand either


  1. Great ARticle Grumpy, I am going to repost a snippet with a link to read the rest here!

  2. Thanks Loopyloo, Moos is a very good writer

  3. Good morning folks,

    This morning I am a very tired writer. Can't stay up past midnight any more, and when I do, I can't sleep past six a.m. - getting older 'ain't great', but it's a lot better than the alternative...

    I wish the news was better this morning, but none of the above was a dream - it's still here as I wake up for another challenge-filled day of: 'Life Under Obama'. If my 401k keeps losing money the way it has in the past week, I'll have enough socked away in 20 years for a bologna sandwich and a six-pack of Dr Pepper.

    Let me know which FIVE of you folks want to be there when I retire. I'll have a can waiting here for each of you. It'll take you a week to get here in your small, un-safe, whiney, government-mandated electric cars (don't forget your 'really long' extension cord!), but in spite of it all, as long as we're 'not alone' we are, by default, 'together'.

    And in this, if nothing else, I find a huge measure of comfort.

    There were a bunch of posts I put on FaceBook this week which I'll blend into 'post-mortem' for the week - but this will most likely come tomorrow as once I'm done raising money for our local high school marching band.

    It's amazing how many people are willing to pay good (even if it's devalued) money to watch a grown man bite heads off live chickens. Yeah, you could say I'm a Geek.

    Going into the Seventh Year of the Jimmy Carter Administration - we're all Geeks. We do what we can.

    p.s.: No Chickens were injured in the generation of this comment (well, not YET anyway)

    p.p.s.: I made up the 'Chicken-Head-Biting-Off' thing. I'll ACTUALLY be spending eight hours today volunteering as a 'Parking Guy' at the Broome County Spiedie Fest. We get a cut of the proceeds for the Band based upon the hours we work and the people who volunteer. For the next eight hours... I AM PRESIDENT OF THE PARKING LOT! (I get to tell people where to go, what they can park, and how to drive. Power corrupts, but ultimate Parking Power corrupts - absolutely)

    If you're in the area (or have a Star Trek Transporter Device) stop on by and check it out (

    If you're NOT bringing your Transporter? Don't worry, I'll tell you where to park...

    Have a great weekend...


  4. I love your posts Mike. Don't alway agree, but I love 'em anyway. I think our biggest problem is the economy, not the debt. The only way we've ever recovered from a recession is to increase spending. Don't increase taxes or cut spending. Dems want to tax, Reps want to cut spending. Either is a disaster. You gotta get money in the hands of the consumers to create demand. To make things worse, the Tea Party's unwillingness to negotiate makes the govt. totally dis-functional. Good luck to you folks who are going to stick around.

  5. Bud, I admire your sense of humor and accumulated wisdom...

    I;m not ready for a WWII typed event and accompanying spending to get us out of this..

    Stimulus combined with the 16 Trillion The Federal Reserve (50,000 for every man woman and child in the country) gave away their big bank friends wasn't enough to spend our way out of it.

    The TEA Party proposals, negotiated away by the professional politicians.. were the only plans that met S&P's criteria to avoid a downgrade.

  6. I think he downgrade is a result of the recognition of a totally disfunctional government. The secondary death spiral of our economy has begun. Our country has never been able to pull out of a recession, by cutting spending.
    The tea party won, but we may never again have a functional government.

  7. No Bud the TEA Party didn't win, nad they won we wold have met the criteria set by S&P to maintain out AAA Rating. They did manage to exert enough pressure to prevent even worse bills, like the ones proposed by Reid and Obama from being the base line.. had that happened all three rating companies would have lowered our standing..

    Almost 18 Trillion Dollar in the last 3 1/2 years didn't do the trick.. how much is necessary?


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