Tag: debt

Puerto Rico’s Debt, Our Problem

Post author By CS Admin
Post date May 25, 2016
3 Comments on Puerto Rico’s Debt, Our Problem

“We have an important choice to make,” presidential candidate and Senator Bernie Sanders recently wrote to Congress. “[D]o we stand with the working people of Puerto Rico or do we stand with Wall Street and the Tea Party?”

The bill in question has been dubbed Paul Ryan’s “first big victory as Speaker,” but was written in tandem with the White House. The plan attempts to rescue Puerto Rico, a United States territory, from financial collapse with both bailouts and austerity — the latter including a lowered minimum wage.

I hadn’t heard any Tea Party squawk about this, so that reference must be just signaling on Bernie’s part.

Puerto Rico is $72 billion in the hole. Basically, Sanders wants to partially repudiate that debt: “The billionaire hedge fund managers on Wall Street cannot get a 100 percent return on their bonds while workers, senior citizens and children are punished.”

Of course our sympathies are almost entirely with the people of Puerto Rico. But it was their government that racked up the debt, and repudiating sovereign debt is a tricky and parlous thing.

What happens when the United States itself faces similar (or worse) straits? Would Bernie then, again, plan to stick it to the government’s creditors — even after he, himself, had voted to increase spending above revenues and periodically raise the debt ceiling — and think that this wouldn’t have consequences?

Meanwhile, the possible minimum wage reduction is one of the stickiest of the issues. Bernie sees it as “sticking it” to the poor.

In truth, it would help increase employment, thus help the poor get out of poverty.

This is Common Sense. I’m Paul Jacob.

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Tags 2016 Presidential race, Bernie Sanders, debt, loans, Puerto Rico

Accountability general freedom moral hazard national politics & policies political challengers responsibility tax policy

Bankrupt Leadership

national debt, debt, deficit, debate, Republican, Democrat, Tea Party, CommonSense

Sen. Rand Paul wasn’t the only thing absent from the GOP presidential stage last Thursday.

Also missing? Any meaningful talk about reducing federal spending and avoiding a sovereign debt crisis. The debt looms over all our heads. But you wouldn’t know it to listen to the GOP hopefuls. (And the same nearly goes without saying for the Democratic Party’s debt-denying presidential aspirants.)

Way back when the Bush Administration had lost America’s confidence, deficits and debts were a common concern. Much of the disgust that birthed the Tea Party movement was disgust at Republican over-spending, as well as at the bailouts that spurred the initial protests. And then came Obama, Obamacare, and a 70 percent increase in federal debt.

Why the silence now?

Nick Gillespie, of Reason, figures that Republicans don’t really care about deficits and debts.

Andrew Flowers, of FiveThirtyEightPolitics, wonders whether the GOP has abandoned the issue because Republicans don’t want to face the fact that Obama has, indeed, reduced deficits — though definitely not the debt, which has nearly doubled.

Alternative theory? Republicans have given up hope, because the last two Democratic presidents, Bill Clinton and Barack Obama, have successfully threatened government shutdown over even the itty bittiest spending cut, safe in the knowledge that the mainstream media’s full spin-cycle will be blaming conservatives.

This has made it easier for Big Government Republicans to embrace greater military funding and other spending programs, as Gillespie notes.

But real leadership recognizes the present danger of debt.

This is Common Sense. I’m Paul Jacob.

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Tags 2016 Presidential race, debate, debates, debt, deficit, Presidential campaign 2016, Sen. Rand Paul

Accountability Common Sense First Amendment rights free trade & free markets general freedom ideological culture nannyism national politics & policies responsibility too much government U.S. Constitution

re: Solutions

Today’s the traditional day for New Year’s “Resolutions,” but instead of resolutions, how about some solutions?

Sure, Thomas Sowell has sagely reminded: there are no solutions in social life, only trade-offs.

But, utopian perfection aside, let’s agree that some changes would be better than others, and, let us resolve to solve some nagging problems — or at least trade up. And since the really nagging problems are political …

For Republicans: this could be the year to give up on government as society’s chief moral agent, empowered to regulate everybody’s medicine cabinets and bloodstreams. End the failed War on Drugs, with legalizing marijuana the simplest first step. Vice will continue, as it always has. But it’s another kind of vice to think that force, policing and imprisoning folks, will “solve” the problem. Much less even reduce the availability of drugs.

For Democrats: this could be the year to give up on government as micromanager of markets — and people’s marketplace choices. Face it: folks will make decisions that liberals don’t like. They’ll eat at McDonalds and buy large sodas — and the wrong stocks. And guns! But adding to the mass of regulations doesn’t make consumers choose better, it makes stuff more expensive and business less open to competition. Indeed, almost all the regulations designed to help “the little guy” backfire, helping big business by hobbling their upstart competitors.

Our leaders, at present, cannot even balance budgets. They are addicted to debt. To pretend we must have more and more government to prevent our addictions or save us from personal debt is ludicrous.

Can we resolve to stop pretending that bigger government is always the solution?

This is Common Sense. I’m Paul Jacob.

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Tags 2016, big government, debt, New Year, New Year's Day

Accountability national politics & policies responsibility

Assuming the Fix

caution, danger, debt, social security, collage, photomontage, illustration, JGill, Paul Jacob, Common Sense

Social Security, like similar systems in Europe, is on a trajectory to insolvency, which could lead to a sovereign debt crisis.

The reason for the crisis? Social Security has always been a pay-as-we-go system, dependent on many workers paying in to a system that sends their contributions to a smaller number of retirees. When the number of retirees expands above the ability of workers to cover at established rates, the system goes broke. Meanwhile, all the system’s budget overages from the beginning to the present date have not been saved and invested. Congress has been taking the overages and spending them, putting IOUs in a notebook.

It is a serious problem.

Or, it isn’t! That is, not if you believe The Nation, which states in a recent article that this is all the result of a legally mandated “bogus” accounting conceit. The Congressional Budget Office, you see,

assumes that Social Security and Medicare Part A will draw on the general fund of the US Treasury to cover benefit shortfalls following the depletion of their trust funds, which at the current rate will occur in 2034.
That would obviously lead to an exploding debt, but it’s a scenario prohibited by law.

The Nation’s somewhat confused author suggests the dire warnings are wrong because “Congress could preemptively pass laws to avert the situation before the deadline; it could take the approach favored by progressives and increase revenue to the programs by lifting the payroll tax cap, or alternatively raise the retirement age and lower benefits.”

Well, yes. But until a fix happens, the doomsday warning stands.

Why does he think we make the warning?

This is Common Sense. I’m Paul Jacob.

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Tags debt, economics, Social Security, solvency, The Nation

Accountability national politics & policies responsibility tax policy

Raising Taxes & Truth

tax, taxes, debt, national debt, truth, collage, photomontage, JGill, Paul Jacob, Common Sense

Sheila Weinberg wants to raise your taxes. So fervent is her money-lust that she even threatens to run for president, and only half-jokingly, on that single issue.

More surprising: I would enthusiastically vote for her.

What gives?

Well, Weinberg isn’t demanding a tax increase or a spending cut, per se — just one and/or the other until accounts are balanced. She points out that tax increases tend to concentrate the minds of taxpayers to oppose greater spending by government. Otherwise, as long as governments — local, state and federal — can hide the true costs of their “services,” more will be spent, and more debt incurred, than the people can afford, or want.

That’s why this friendly CPA founded Truth in Accounting, a nonpartisan, non-profit group working to “compel governments to produce financial reports that are understandable, reliable, transparent and correct.”

Too much to ask? No, if you ask me, or you, or Sheila, or anyone else … until we inquire of politicians, and then, well … apparently, yes. And not merely at the federal level.

“For years, citizens have been told that their home state budgets have been balanced,” Weinberg recently told Watchdog.org. “If that were true, state debt would be zero …”

Yet, last month, Truth in Accounting issued its 2014 Financial State of the States report disclosing that state governments are truthfully — whether they admit it or not — a cumulative $1.3 trillion dollars in arrears. Individually, all but 11 states are carrying debt.

Lies won’t set us free. Or pay the bills.

This is Common Sense. I’m Paul Jacob.

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Tags debt, deficit spending, federal debt, federal spending, government spending, tax, tax policy

Accountability folly national politics & policies responsibility

Failing in the Future Biz

future, predicting the future, political, politics, collage, photomontage, illustration, prophecy, fortune teller, mistake

If you can’t sell us the future, you’re doing it wrong. We all want to get there in one piece.

Right now, a horde of Republican presidential candidates and a small cohort of Democrats vie to present themselves as visionaries, leaders.

Yet, what they all have in common is that they ignore the most serious issue facing us. Bigger than borders and terror and ISIS and gay marriage and all that, is the financial stability of the United States. Our future is in peril because of the continual Washington stalemate of never-ending deficit spending and continual debt growth — total debt being around $100 trillion.

The reason for this enormity? Politicians like to promise things, lots of things, very expensive things like wars and entitlements, to win our votes. But these same promiscuous over-promisers have more than a little difficulty agreeing on the taxes that would pay for all those “things.”

Why the difficulty? Because Americans already pay plenty in taxes and very few of us non-Omaha-based non-billionaires care to fork over even more of our hard-earned pay to a wasteful leviathan.

Any respectable vision of the future must acknowledge the current predicament, and provide a way out — before it’s too late, like it may very well already be … for Greece.

Wanting something for nothing isn’t Greek to any of us, unfortunately. That’s why we need leaders with the honesty and courage to present a vision more real than government providing ever more goodies on credit ad infinitum.

Credit just doesn’t add up, infinitely. The more you rack up debt, the more finite your future.

This is Common Sense. I’m Paul Jacob.

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