Home > Budget > Debt Ceiling: What’s in it for Virginia?

Debt Ceiling: What’s in it for Virginia?

July 5th, 2011

Richmond Times Dispatch

Jeff Schapiro

Could this red-white-and-blue weekend augur red ink for Virginia?

Default by the federal government, unless the debt ceiling is raised by Aug. 2, has potentially devastating effects for state government.

The flow of dollars from Washington to Virginia — No. 1 in federal spending per capita — would slow to a trickle. Federal workers wouldn’t be paid, driving up unemployment and choking off income-tax revenue. Medicaid, the federally financed, state-managed health-care program for the poor that is Virginia’s fastest-growing expense, would go begging.

To keep the budget in balance as required by law, Gov. Bob McDonnell would have to start cutting.

Also, transportation dollars would evaporate, potentially slamming the brakes on a defining feature of McDonnell’s just-passed road-building program: debt. He is planning to issue $1 billion in bonds backed by an anticipated federal handout.

With Uncle Sam unable to borrow money, interbank lending would stall; so, too, would a segment of the economy that depends on other people’s money: the still-struggling housing market. Another downturn would further imperil important sources of cash for local government, including property taxes and levies on land and building sales.

But perhaps the most embarrassing consequence for Virginia would be the most abstract: the possible loss of the highest credit rating, triple-A. It has been a badge of honor for Virginia since risk ratings were first issued for states in the late 1920s. Lower ratings mean higher costs for taxpayers who back bonds, paying principal and interest.

Virginia saved its triple-A rating in 2004 by increasing taxes but could lose it if Washington fails to increase the debt limit.

That’s because, in the view of the three rating agencies, the creditworthiness of government — at all levels — is tied to that of the nation, the so-called sovereign rating. U.S. debt is triple-A. If it falls, so could Virginia’s. Local governments, such as triple-A Fairfax County, wouldn’t be spared.

Moody’s Investor Services, one of the credit agencies, this past Thursday warned of the cascading effects of federal default. A summary of the report said, “Some (triple-A)-rated states and local governments, however, may be more vulnerable to credit pressure under the circumstances that would lead to a sovereign downgrade and, in turn, more vulnerable to rating actions.”

Translated: oops.

But you don’t have to take Moody’s word for it. Just ask Bill Boinest, plain-talking retired head of a Main Street bond house. “The fallout is there,” he said. “If the triple-A rating of the country is lost, the states and municipalities will eventually feel the effects of a downgrade.”

Is this what Virginians want?  That is a pretty impressive record with the triple-A bond rating since the late 1920s.  Our bond rating survived the Great Depression and the Near Great Depression on 2008-2009.  The economy is all inner-related.  Virginia needs that debt ceiling raised.  We don’t need the default to tickle down so we can’t pay our bills. 

  1. Starryflights
    July 6th, 2011 at 03:05 | #1

    The Repugs want to default on our debts in order to win political points. This will have devastating effects all across the country, especially Virginia. That is very irresponsible and immature. They need to grow up and do what’s right for the country. Taxes on the wealthiest must be raised in order to close budget gaps and honor our financial committments.

  2. marinm
    July 6th, 2011 at 07:26 | #2

    What kind of political points will be won if we default as a nation? If just as above that Virginian’s will suffer because we are so attached to the govt teet?

    Starry, I think you are off here. It’s not about political points. It’s about trying now to make effective change.

    If I live by financing my life on a credit card and I’m near my limit do I beg to the bank for a credit limit increase or do I figure out what I ‘need’ and what I ‘want’ and then adjust my spending accordingly? I’ll tell you what Bank of America would say if I were to ask… Pound sand.

    We have a chance to get this right. I say hold the line.

  3. July 6th, 2011 at 07:51 | #3

    But the USA doesn’t live on a credit card and it has the unique ability to be able to print its own money. Virginia doesn’t. Virginia has to have a balanced budget. It cannot print its own money.

    Taxes will eventually have to be raised. Let’s do it the smart way. It is absurd to keep protecting the very wealthy from a 1 or 2 % tax hike.

    The current attitude about no new taxes isn’t realist and attempts to put the USA in a 2nd rate position. Why on earth should someone making $5 million a year be protected from a small increase by people making far less? Why not just put a big sign on our backs saying kick me.

    There are a lot of us than there are of them. Why are we being stupid? Have they poisoned the well?

  4. July 6th, 2011 at 08:41 | #4

    Taxes cut and spending increased since 2000. Hmmmm…who did that? Does that even make sense? It seems that the party who made the mess wants to keep making it worse.

    I am sick of political games. The debt ceiling needs to be raised.

    What have the Republicans brought in from the mid term elections? I sure don’t see anything. All that bullsnot and bluster about how they would fix the economy and create jobs? Where are those jobs?

    They haven’t created jack…only obstructionism. Where the jobs? Where are the jobs?

  5. Starryflights
    July 6th, 2011 at 09:04 | #5

    @marinm

    I don’t believe in living off a credit card either which is why I support raising taxes. We do not need to be giving tax breaks to oil companies who are already experiencing record profits, or for businesses to deduct private jets and yachts. We all have to make sacrifices.

  6. Dan Cooper
    July 6th, 2011 at 09:26 | #6

    @Moon-howler

    Well geeze Moon, just look at what they inherited from Nancy Pelosi. It’s going to take some time, the worst speaker this country has ever seen put us in the situation we are currently in.

  7. marinm
    July 6th, 2011 at 09:26 | #7

    @Starryflights

    What sacrifices are the 50% of people that don’t pay taxes making? Why don’t they have any skin in this game?

    MH, the debt limit *IS* our credit card. We’re living off borrowed money. The USA printing it’s own money doesn’t mean it can just turn on the printing presses and the problem goes away.

    If it were that easy (reminds me of a Staples commercial) I think Geitner would be pouring more ink into those presses as quick as he could.

    All the tax plans put forward by the -R’s have been squashed in the Senate. As Reid controls what can be debated there is no opportunity to raise or debate the issue. So, it’s easy to say that the -R’s haven’t put anything forward (neglecting the evil Ryan or Paul plans unless someone wants to say that the -R’s want to take away Medicare) because they simply can’t.

    If we’re talking about shared sacrifice I do agree with you. Let’s everyone get taxed at 5%, 10% or whatever rate we set. EVERYONE. No deductions. If we’re giving out the KICK ME sign let’s all wear it and not exclude anyone.

  8. July 6th, 2011 at 09:55 | #8

    Nancy Pelosi was not the only congresswoman nor was she the leader of the country. As I recall George Bush was president. Where was the leadership? Who wanted the tax cuts? Who wanted the spending? Who wanted the wars?

    Stop saying Nancy Pelosi. She is but a pawn in the big picture. Stop making excuses. I sure heard lots of chest thumping once Obama took office about what those big Bad Republicans would get done.

    Well, have at it. Let’s see it!! What are the Republicans doing that those they threw out of office wouldn’t have gotten done? Come on! 6 months was good enough for Obama to turn back a recession. A bunch of Republicans ought to be able to get it all done.

  9. July 6th, 2011 at 10:03 | #9

    @marin, About 40% don’t pay federal taxes and those are the people making $40k and less. That 50% figure being tossed about was from 2009–when the recession hit.

    The fact that 40% of the people are making less than $40k should probably be a red flag. Do you want to tax them rather than someone making a million dollars?

    We have always had debt. We also have a triple A bond rating that will probably go up in smoke after the R’s finish with it.

    This simplistic version of America won’t fly. You cannot compare a family budget to a national budget that is deeply immersed in a global economy. There is no comparison. The American people aren’t simple minded, I don’t think.

    The main reason the American people aren’t up in arms over this court with another financial disaster is that most people don’t have that firm of a grasp on macro economics, myself included. Everyone is just going around parroting a bunch of bs that the politicians who also don’t understand are spouting.

    This is a very serious situation that needs to not be reduced to political posturing.

  10. Dan Cooper
    July 6th, 2011 at 10:03 | #10

    Starryflights :@marinm
    I don’t believe in living off a credit card either which is why I support raising taxes. We do not need to be giving tax breaks to oil companies who are already experiencing record profits, or for businesses to deduct private jets and yachts. We all have to make sacrifices.

    I LOVE how liberals bash tax breaks for jets. Do you even realize why these were originally put into place? It was to protect union jobs believe it or not. However, have it your way. Lets end ALL tax breaks for private jets and just sit back and watch all of those union jobs that build and maintain these jets move over seas. Great idea Starry!

  11. Dan Cooper
    July 6th, 2011 at 10:14 | #11

    Here is a good article about ending tax breaks for private jets and how it will kill 10′s, if not 100′s of jobs (which are mostly union jobs):

    “The General Aviation Manufacturers Association (GAMA) and the International Association of Machinists and Aerospace Workers (IAMAW) sent a letter to the president following his remarks expressing “deep concern” about his ideas and said that his proposals “would negatively impact the entire general aviation industry.”

    The letter also said Obama’s policies have led to the layoff of 20,000 IAMAW workers.”

    http://cnsnews.com/news/article/obama-calls-ending-tax-breaks-aviation-i

  12. Dan Cooper
    July 6th, 2011 at 10:17 | #12

    Dan Cooper :Here is a good article about ending tax breaks for private jets and how it will kill 10′s, if not 100′s of jobs (which are mostly union jobs):

    Should have read 10′s, if not 100′s of THOUSANDS of jobs (which are mostly union jobs)

  13. Dan Cooper
    July 6th, 2011 at 10:21 | #13

    @Moon-howler

    Hey, I agree with you Moon. I’m pretty disappointed with them so far. They have been weak and have caved and compromised with way too many of the minority’s demands. I fear they will do the same here with the debt limit as well. So far I’m not happy with much of what they have done and even more disappointed with what they haven’t done.

  14. Cato the Elder
    July 6th, 2011 at 10:46 | #14

    Queen’s Gambit.

    There’s a deal to be made here. Were I the speaker, I’d launch a very public, very loud offensive and essentially say that raising taxes is a last resort. Unfortunately, we’re down to the last resort. Therefore we will back returning the tax rates to the Clinton years in return for the rescission of unsustainable spending (Obamacare) and entitlement reform. You want tax increases, then Obamacare must go.

    My Queen for Yours.

  15. marinm
    July 6th, 2011 at 10:48 | #15

    @Moon-howler

    “About 40% don’t pay federal taxes and those are the people making $40k and less. That 50% figure being tossed about was from 2009–when the recession hit.”

    40% or 50%. Either way they pay $0 towards the federal system. They have no skin in the game. Why not hit these people at 20% like everyone else?

    “This simplistic version of America won’t fly. You cannot compare a family budget to a national budget that is deeply immersed in a global economy. There is no comparison. The American people aren’t simple minded, I don’t think.”

    Maybe. But, I think in their gut people know that as a nation we have to pay our debts and that we cannot continue to just simply borrow more and never pay back the original note. I think the average person wonders why it’s gotten so bad in so few years (Bush+Obama) and how we can ‘fix’ it. If that means less services maybe that’s the route we go.

    “This is a very serious situation that needs to not be reduced to political posturing.”

    I 100% agree with this statement but your posturing on blaming Republicans goes against that statement. I think both parties need a good kick in the Jimmy. I blame both parties. I blame an out of control government. We need to reduce spending now and come up with a plan for living within our means.

    As Dan said above if that means putting a hundred thousand union workers out of business so be it.

    We need a sustainable model. We don’t have that now.

    So, let’s FIX it and not just say we’ll deal with it tomorrow because we can raise the limit today.

  16. July 6th, 2011 at 11:16 | #16

    I blame the Republicans because they say they will not compromise. Have Democrats said that also? I think not.

    Marin, you want to hit those making $40k and less with 20%? Why? What kind of saddist are you? That beings someone making $40k down to $32K. That is absurd.

    Dan, have you contemplated what not having the debt ceiling raised will do? Do you think that is good for America? Will it be good for your company? Will you still have a job when its all over with? You don’t even want to think about that kind of tail spin.

  17. Censored bybvbl
    July 6th, 2011 at 11:24 | #17

    Maybe. But, I think in their gut people know that as a nation we have to pay our debts and that we cannot continue to just simply borrow more and never pay back the original note. I think the average person wonders why it’s gotten so bad in so few years (Bush+Obama) and how we can ‘fix’ it. If that means less services maybe that’s the route we go.

    I wouldn’t be too sure of that – witness the number of foreclosed houses nationwide. I think that gives you some idea of the average person’s view of debt and his/her financial outlook. I realize a lot of people have wised up but there are many waiting to jump back in to real estate no wiser. It’s all about thinking you (general “you”) deserve everything you want when you want it. Congress reflects that.

  18. marinm
    July 6th, 2011 at 11:29 | #18

    MH,

    “Marin, you want to hit those making $40k and less with 20%?”

    You’re right. I’m wrong. It should be 25%.

    10% on taxable income from $0 to $8,500, plus
    15% on taxable income over $8,500 to $34,500, plus
    25% on taxable income over $34,500 to $83,600, plus
    28% on taxable income over $83,600 to $174,400, plus
    33% on taxable income over $174,400 to $379,150, plus
    35% on taxable income over $379,150.

    So, assuming 40K and single they should be putting in the 10% of 8500, 15% of 34,500 and 25% upto 40K.

    I’m not a saddist. I think it’s absurd to call for increased taxes on “the top 2%” when we don’t tax the bottom 40%. They need to put some skin in the game. If they’re calling for a ‘shared sacrifice’ I want to see it from the bottom 40%.

    Borrowing Cato’s term. Queen’s Gambit. You get 1% on the top 2% if we tax the bottom 40% like we’re supposed to. That’s compromise in my book.

    We still need to tackle spending and entitlements.

  19. marinm
    July 6th, 2011 at 11:34 | #19

    “I wouldn’t be too sure of that – witness the number of foreclosed houses nationwide. I think that gives you some idea of the average person’s view of debt and his/her financial outlook. I realize a lot of people have wised up but there are many waiting to jump back in to real estate no wiser. It’s all about thinking you (general “you”) deserve everything you want when you want it. Congress reflects that.”

    Damn good point Censored. I blame MTV and that actions have no negative consequences.

    Moral hazard. See Rick Santelli. http://www.youtube.com/watch?v=bEZB4taSEoA

  20. July 6th, 2011 at 11:57 | #20

    And what do you mean by entitlements and spending. Let’s throw some definitions out.

    Tax tables are very complex. At first glance there is something wrong with $34,500 to $83,600 being at the same tax rate. That one just hops out at me.
    Taking someone below the poverty level makes no sense and wanting to do so represents some sort of mean-spiritedness and impracticality. We tax them so we can turn right around and give them food stamps and welfare? What kind of sense does that make?

    You must envision yourself as a CEO some day, making $10 million bux a year. There is no other reason to want to protect them from a measly 1% while you want to extract blood from the poor.

    I am still waiting to see all these jobs that the rich are trickling down? Where are they? 9 years of tax cuts and I still don’t see these jobs.

  21. Censored bybvbl
    July 6th, 2011 at 12:20 | #21

    M-h, the old horse and sparrow theory didn’t work so well in the olden days and its not working so well now. What’s that saying about doing the same thing over and over again and expecting different results…

    Marinm, if you make poor people poorer, they’ll have to double, triple, quadruple up to live in that apartment or townhouse or maybe 12 or 15 in the single family house next door. Oh, we’ll call zoning on them! Then they can live in the woods when the shelters are full.

    How did the poor rich people survive before Bush gave them a tax cut (temporary – cough, cough)? Were they leaving the country in droves? Did they have to fly business class? How much of their time did they have to spend trying to figure out how to invest, shelter, or spend several tens of millions each year (and that’s the poorer rich)? Oh, the headache of it all!

  22. marinm
    July 6th, 2011 at 12:48 | #22

    @Moon-howler

    Elimination of entire Agencies of the government. Education, Commerce, Energy, Health & Human Services, etc. Allow younger workers to opt out of SS and fund retirement how they choose.

    Food stamps and welfare? Those would be eliminated as well.

    A CEO one day? That’d be nice. We’ll see what the future holds. I know in this country the limits set upon me are generally only the ones I set on myself.

    ‘Extracting blood’ or ‘making poor people poor’. Can we move to an arguement with less emotion and more substance?

    I just do not see it as logical to point out that we need to tax success when we allow so tens of millions of Americans to skip out on paying their fair share.

    No bite on my suggestion? No compromise?

    • July 6th, 2011 at 13:24 | #23

      Marin, before anyone agrees to get rid of welfare and food stamps you need to offer a program that will provide food, shelter and clothing for the poor.

      You just can’t will them away to die on the street grates.

      What are you considering an entitlement? And which spending are you referring to? Let’s deal with specifics. ‘Entitlements’ and ‘spending’ really are fairly empty words.

  23. July 6th, 2011 at 13:16 | #24

    Education would be fine. I don’t think that department does a lot of good and I also believe that education should be more local. HHS? Let me think on that one. Energy and Commerce–needed.

    SS should be an option. I don’t care if young people opt out if they have a mandatory plan they must contribute to.

    Food stamps and welfare…as much as I would like to see people not on them…what do you do? Do you let people starve? How about the disabled? How about the children?

    Taxing the already poor does make them poorer. Nothing emotional about that. Simple math.

    Taxing success makes more sense than taxing non success that you are already supporting in some cases. Know that those poor who aren’t paying federal tax are paying FICA, state and local taxes.

    See, you are aspiring to make 10 million so that is why you are protecting them. That’s a long shot.

    Obviously someone making millions can spare a little more money than someone making $75k. I am not sure why this continues to be a mystery to some. Obviously the old trickle down jobs bs is just that–bs.

    Until I see politicians who will agree to put a 1-2% increase in taxes for the very rich, I won’t be voting for them. I am certainly not alone in thinking this.

  24. marinm
    July 6th, 2011 at 14:05 | #25

    Entitlements would be programs such as Unemployment, SSI, Medicare and Medicaid. The programs need either to be reconstructed or eliminated. Faith based groups can provide for feeding, clothing, and sheltering the poor or disabled.

    Spending as I indicated above would be accomplished (rather, restricted) by elimination of entire agencies of the government. In effect we’d need to spend less as a government if government itself were smaller.

    I object to a ‘mandatory’ plan for young people to opt into. If they wish to ‘self-insure’ they should be free to do so. If they wish to enroll in an IRA, a 401K or a passbook savings account OR do nothing. I should have no say in it. I also am not obligated to provide for that grasshopper if he doesn’t prepare for winter.

    My heart goes out to the disabled or children in a bad position. But, the taxpayers should not be milked to transfer wealth from the middle class to them. As much as possible people should be encouraged to give time, materials and money to charitable organizations that will look out for those that can’t help themselves.

    “See, you are aspiring to make 10 million so that is why you are protecting them. That’s a long shot.”

    Because if we ask more of them we should also ask it of ourselves. If you want to tax them I say we get the 40% to ante up AND then add the additional 1 or 2% tax that you crave for higher-end earners. Either we are equal or we are not.

    “You just can’t will them away to die on the street grates.”

    There are not enough rich people to soak to get to a position where all the social programs + required spending can be paid for. It just doesn’t add up. We have to cut back spending.

    WSJ Opinion piece

    http://online.wsj.com/article/SB10001424052748704621304576267113524583554.html

    Consider the Internal Revenue Service’s income tax statistics for 2008, the latest year for which data are available. The top 1% of taxpayers—those with salaries, dividends and capital gains roughly above about $380,000—paid 38% of taxes. But assume that tax policy confiscated all the taxable income of all the “millionaires and billionaires” Mr. Obama singled out. That yields merely about $938 billion, which is sand on the beach amid the $4 trillion White House budget, a $1.65 trillion deficit, and spending at 25% as a share of the economy, a post-World War II record.

    Say we take it up to the top 10%, or everyone with income over $114,000, including joint filers. That’s five times Mr. Obama’s 2% promise. The IRS data are broken down at $100,000, yet taxing all income above that level throws up only $3.4 trillion. And remember, the top 10% already pay 69% of all total income taxes, while the top 5% pay more than all of the other 95%.

    It’s not about one day hoping I make 10M/year so I want to have the laws favorable to me. It’s understanding that if the idea spreads that these people can afford to give something up because they make ‘X’ what’s to say ‘X’ won’t be lowered at a future date so that I’m now part of ‘X’?

    If people think 250K is ‘rich’ what’s to say in the future that 200K is rich? 150K? 100K? 50K?

    • July 6th, 2011 at 17:36 | #26

      Marin, you live in a dream world. There aren’t enough faith based charities to pick up the slack. I don’t know what the answer is. You can’t allow people to starve to death. I understand the frustration of seeing people who should be out working living on the dole. Many of them often didn’t take advantage of the education afforded them, or made other bad choses that left them less than capable of earning a living to support themselves and their kids. Often people have kids they cannot afford and fail to use contraception and fail to mate with people who are responsible enough to take care of their kids.

      I wish I knew how to get people to make better choices, but I don’t. Let’s pull unemployment and medicare away from your list. Employers pay unemployment insurance and those who work pay medicare. When you actually go on medicare you also pay, quite a bit, I might add, if you are middle class. So lets not act like that is welfare either.

      SSI and medicaid, that’s another story. In a million years churches couldn’t pick up the slack for all that. These people will still be here, even if Marin is king for a year. You will never get elected to much of anything with that kind of thinking. Medicare is very popular. Unemployment is not a bad thing either. Things change and you never know when it might be you. You might think you are driving the gravy train now but down the road, when new tchnology replaces what you know how to do, and it will….it could be you who gets left out in the cold. That’s just it. You never know.

  25. Cargosquid
    July 6th, 2011 at 14:17 | #27

    @Starryflights
    “for businesses to deduct private jets ”

    Um….it was YOUR man, Obama, that put that tax break in for jets.

    Nice that you can read talking points, though.
    Please, tell me how much money is going to be raised from increasing taxed on the “wealthy,” however that is defined, when confiscating 100% of their wealth would not close that gap.

  26. Cargosquid
    July 6th, 2011 at 14:34 | #28

    Where are the jobs? Everywhere you look. But, the GOP has not gotten anything enacted, unlike the Democrats. The GOP entered office with the statement that they would work to stop Obama from killing jobs. And they’re trying.

    But, you go right ahead and blame everyone except those responsible. Pelosi? Blameless. Someone else was responsible for the biggest spending increase in our history. Someone else was Speaker of the House when the deficit was almost quadrupled in one year. Someone else LOCKED OUT the GOP from any bill planning. Someone else RAMMED and BRIBED Obama’s health care down our throats.

    So…of course, it was the Republicans. Our President STILL blames them for everything. Why not you? We’re used to it. Its never the failure of liberal policies. THEY’RE too smart to fail…just ask them. Its always someone else’s fault. All of their solutions would work right if we just throw more money at it, if we just find the right person to control it, if we just add MORE laws to control the populace.

    So, Moon, you want a 1% tax on the wealthy? Ok. Let’s get Obama and the Democrats to reform the tax code so that corporations actually pay taxes, instead of profiting from the tax code by gaming the system.

    • July 6th, 2011 at 17:41 | #29

      yes Cargo, I want a 1% hike on the wealthy. I’m just tired of all of you all finger pointing so I thought *I* would point out a few things. You all hounded Obama before he got off the Capitol balony after taking the oath of office. Just handing a little back at you. I haven’t seen crap from them. They all were telling Obama how to do it.

      I would suggest that perhaps it is a little tougher than it looked and now some of these people are in a position to create change…it needs to start. It is far easier to criticize than to actually make something happen.

  27. Kelly3406
    July 6th, 2011 at 23:19 | #30

    Even for the Democrats, it took a concerted effort to create annual deficits greater than $3 trillion. A cynical view point of view might hold that the Dems created this crisis to provide an opportunity to raise taxes, make the tax code more progressive, and perhaps introduce a VAT tax. After all, it was this administration that didn’t want a good crisis to go to waste. Just sayin’ ….

    • July 7th, 2011 at 00:39 | #31

      Just be glad you aren’t in the middle of a recession. Ever talk to someone who lived through that?

  28. Cargosquid
    July 7th, 2011 at 00:40 | #32

    Actually its not tougher than it looks. See, Obama had a completely cooperative Congress. They said that their programs would “stop the seas from rising.” They said that, if only we spent these trillions, we would barely feel this recession. Well, they enacted their bills, even though they were told it would not work and were shown where such ideas had previously failed. Yes we hounded him. His vain

    This time, the GOP is in control of ONE house. So, go ahead and be childish. We’ll wait.

    But if Congress is serious at all, and if Obama is serious at all….this is how it has to be done. Not with 1% token tax raises to make a statement about “rich people.”

    http://danieljmitchell.wordpress.com/2011/07/06/im-willing-to-go-along-with-president-obamas-balanced-approach-to-deficit-reduction-but-only-if-we-use-honest-math/

    If they want to raise the debt ceiling…fine, all they have to do is cut spending. And if they want to raise taxes, cut spending. REAL cuts.

  29. Cargosquid
    July 7th, 2011 at 00:41 | #33

    @Moon-howler
    You mean, like the one that we’re living through now…..Or my mom who lived through the Depression……

    • July 7th, 2011 at 06:28 | #34

      And what did she have to say about the Depression? Not fun. Was she a child or an adult?

      We aren’t in a Depression now.

  30. Cargosquid
    July 7th, 2011 at 01:11 | #35

    Here ya go, Moon. The Conservative argument for higher taxes

    http://www.powerlineblog.com/archives/2011/07/is-there-conservative-case-for-higher-taxes.php

    This guy does have a point. One can’t “starve the beast” if the beast borrows recklessly to feed itself.

    Soooo, maybe….its time to let the Democrats have their way. Don’t stand in the way of any tax hikes. And make sure the Democrats get the..um……credit….yeah..that’s the word.

    And let’s see how Americans like the bill. Keep on spending and just raise taxes to the roof to pay for it. I mean….we can’t seem to cut spending, so we must pay for it.

    • July 7th, 2011 at 06:31 | #36

      I would start with getting rid of a few wars. You know the tax hikes proposed on the wealthy, Cargo. There are all sorts of cuts that can be made. Lets look at the logical ones first.

  31. Starryflights
    July 7th, 2011 at 01:44 | #37

    Cargo, What do you mean the Repugs haven’t gotten anything? The Republicans got their tax breaks extended last year by Obama, which was a big mistake if you ask me.

    The Bush tax breaks have been in place for over a decade now.

    And what do we have to show for them?

    About 10% unemployment, that’s what.

    • July 7th, 2011 at 06:32 | #38

      I keep looking around for those jobs that trickled down, Starry. Haven’t seen them yet.

  32. Cargosquid
    July 7th, 2011 at 08:26 | #39

    @Moon-howler
    Since the Depression lasted for over 10 years….she was both. And she was working at 13.

    And the jobs that trickled down have been lost. We had a nice run, now the policies are preventing businesses from hiring. When you make hiring more expensive and tax policy uncertain, you don’t get “trickle down.” When you have cronyism, connected businesses make money while small business goes broke.

    If “trickle down” doesn’t work, how do you explain the business booms of the last decade? How is it that we had 5% unemployment? Does increasing the costs of business bring about MORE employment or less? Its as simple as that. Would increasing taxes hurt or help businesses hire more people? Personally, I think that the GOP should have let the so-called “breaks” expire and let the public see how even more disastrous the Democrats can be. When the enemy is making mistakes…let them be.

    • July 7th, 2011 at 08:43 | #40

      What policies are preventing the jobs from trickling down?

      Then why not get your buddies to get in there and vote to change policies? Unemployment rates jump up during near depressions. Why should this one be different? I am just glad it isnt 25%.

      I am saying that protecting your millionaires from a 1% tax increase is just pure crap. I don’t know any other way to put it.

      So we default on our debts to protect the wealthy. Makes perfect sense to me, if I were a serf.

      Put yet another way, are you willing to cut seniors’ social security to protect millionaires from a 1% tax increase? I am not.

    • July 7th, 2011 at 08:45 | #41

      I am still trying to figure out how we have parents the same age. My father was no spring chicken when I came along.

  33. Cargosquid
    July 7th, 2011 at 09:34 | #42

    @Moon-howler
    My mother was born in 1919, father in 1917. I was a surprise.

    What policies? Well, Obama’s health plan. The EPA’s attempt to regulate carbon. The Dodd-Frank finance bill. Obama’s statement that energy prices will “necessarily skyrocket.” The QE money printing..that allows banks to make money by borrowing at….effectively 0% and buying bonds. Why lend money when you have a sure thing? Also, this printing also drive the oil price up and up.

    Successful companies are sitting on cash because they think that future tax policy, energy policy, and health care policy is going to hurt. They don’t trust Obama or the Democrats. Both have demonstrated a willingness to demonize industry and business and to make sweetheart deals with big business to achieve their agendas.

    Cut and simplify the tax rates. De-regulate. Cut gov’t spending. Business will boom.

    • July 7th, 2011 at 12:57 | #43

      I knew you were a surprise. My parents had one too. I wasn’t it though. OUr parents are very much contemporary.

      My mother said people around Charlottesville weren’t hit all that hard by the Depression. Of course that is through her eyes and I knew her family didn’t have it too badly. My father lived in NJ and that was a totally different story. He told me he worked in the bowling alley as a teenager for a while and set up bowling pins for 10 cents an hour.

    • July 7th, 2011 at 13:12 | #44

      I don’t see why Dodd-Frank should do anything to hurt jobs. What jobs is it hurting? My complaint of that bill is that it didnt go far enough.

      I don’t understand the energy price statement. That has nothing to do with Obama. QE hurting jobs? I don’t see how.

      I hope the Republicans reward you. You are almost a perfect Republican. You throw out these statements as fact when in actuality they are pure opinion. There is little evidence that what you said has any basis. Companies sitting on cash don’t want to get caught in the crunch like they were in 2008. It would be easy to attribute anything that came in under Obama as the root cause. Not according to my readings.

      The great near Depression scared the bull snot out of companies. The cash freeze is what hamstrung them. Perhaps they fear getting caught with their pants down again. I postulate that we would be seeing the same thing regardless of who is president. Meanwhile, dividends are sweet.

  34. Cargosquid
    July 7th, 2011 at 14:36 | #45

    Oil is priced in dollars. If you want oil, you buy it with dollars. QE 1 and 2 and subsequent Fed buying of our debt is inflating our dollar, weakening it. Furthermore, Obama’s agenda makes energy development and production more expensive, as he desires.

    Dodd-Frank, those two geniuses that brought us the housing bubble, have decided that our energy and financial markets need more regulation. So this bill puts more of the people that were responsible for the last bust in charge of yet more regulatory power. Since the act now makes energy trading more complex, energy prices will go up. It would probably be better to state that this bill indirectly hurts the job market. Part of the problem is that Dodd and Franks are corrupt bastards that should be out of a job, even if two, even more liberal, politicians took their places. In other words, this is the perfect example of, “”I’m from the government, and I’m here to help.” This bill makes credit harder to get. Even the gov’t doesn’t know how much compliance will cost, so why should business?

    Excerpt from http://www.washingtontimes.com/news/2011/feb/7/dodd-frank-a-costly-way-to-help/:
    *******
    One of the stated purposes of Dodd-Frank was “to protect consumers from abusive financial services practices.” Debit-card fees aren’t fun, but they’re hardly abusive. Even if they were, now we have government trying to “protect” us in typically inept fashion. We’ll wind up paying as much as before, if not more, just at different times and for different reasons.

    Thanks for the “help,” Uncle Sam. Government to the rescue, huh? The problems with Dodd-Frank don’t end there. The law also created a Bureau of Consumer Financial Protection, which, we were told, would protect consumers from unfair practices. But the new bureau is no mere watchdog. It has broad powers to limit the financial products and services that banks can offer to consumers. Yes, the government will “protect” you by limiting your access to certain financial products, even in situations in which you know and understand the risks. Making credit more expensive and harder to get is not exactly a help to consumers. But that’s the practical effect of Dodd-Frank.

    Worse, we won’t know the full impact of the legislation for some time to come. It required nearly a dozen government agencies to write hundreds of rules, reports and studies – and, as they say, the devil’s in the details. In an effort to get some handle on the impending costs, House Republicans recently asked nine of those agencies to detail how much it will cost them to enforce Dodd-Frank.

    *****
    Companies don’t want to get in what crunch? According to Obama, the recession is over. It can’t be his policies that are encouraging companies to restrict hiring. Nah…can’t be. Except that those companies have stated such. I throw out statement that have evidence to back them up.

  35. Cargosquid
    July 7th, 2011 at 14:55 | #46

    Furthermore here is another major problem with Dodd-Frank….it’s vague. It allows non-elected officials to make the law.

    Here ya go: Picture this….a bank forecloses on 1000 homes. Feasible.
    The worth of those homes, on paper, is the value of the loans now in default. Once they sell those homes at reduced prices, the banks show a tangible loss and the assets. If that bank’s “health” is determined to be “weak” by the Dodd-Frank regulators, said bank can be taken over.

    http://www.libertycentral.org/volcker-rule-illustrates-the-problems-with-dodd-frank-2010-07

    Read the whole thing. Says it better than I can. Especially this part: This bill basically says that federal regulators are the ones who need to identify and prevent risks to the economy, despite the fact that they missed all the warning signs of this current economic crisis. There is an absence of accountability for these regulators, and bailouts will continue. Investors will be afraid to put their money into a company for fear that the government may come in and take apart a corporation. This entire bill ensures only gray areas, greater government involvement in business and the need for more legislation and regulation as this bill will fail to prevent economic problems.

    That’s why companies are afraid to spend money.

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