Sunday, January 01, 2006

Administration Seeks To Raise Debt Limit For Fourth Time In Five Years

Treasury Secretary John Snow, in a letter to lawmakers, said Thursday that the Bush Administration will soon ask Congress to raise the government's debt ceiling, now capped at $8.18 trillion.

It will be the fourth time in five years that the administration will seek to increase the debt limit. Failure to do so would likely cause a federal default by March -- an unimaginable crisis that would rattle bond markets, force interest rates higher and shake the economy.

Congress is likely to raise the limit by next month.

***

President Bush doesn't talk much about the federal deficit, which has grown by more than $2 trillion under his watch.

Officially, the White House lists as one of Bush's "accomplishments" that the administration remains "on track to cut the budget deficit in half by 2009." The budget deficit for the current fiscal year -- $333 billion -- was trumpeted by Bush as a sign Bush-onomics was "working."

But the $333 billion figure was phony -- under-representing the cost of the Iraq and Afghanistan wars and not factoring in additional expenditures to fix the alternative minimum tax.

When he's not patting himself on the back for the $333 billion annual deficit, Bush has been thanking the Republican-led Congress for its deficit reduction skills. The Bush-onomics math? Entitlements were cut ($39.7 billion) to offset Bush's latest planned tax cut for the wealthy ($100 billion). No wonder the deficit is growing.

Federal Reserve Chairman Alan Greenspan -- no dummy when it comes to economics -- paints a different picture when discussing Bush-onomics.

Here's what he said before the Senate Budget Committee in April: "(T)he federal budget is on an unsustainable path, in which large deficits result in rising interest rates and ever-growing interest payments that augment deficits in future years. ... Unless that trend is reversed, at some point these deficits would cause the economy to stagnate or worse."

The Republican-led Congress will rubber-stamp Snow's request and raise the debt ceiling next month. But perhaps the Bush Administration should spend less time spinning the deficit, and more time reducing it.

26 Comments:

Blogger don dzikowski said...

Here's a line lifted from the Republicans' Contract With America back in 1994:
"THE FISCAL RESPONSIBILITY ACT: A balanced budget/tax limitation amendment and a legislative line-item veto to restore fiscal responsibility to an out- of-control Congress, requiring them to live under the same budget constraints as families and businesses."

They are a bunch of hypocrites. (Oh, I forgot, "9-11 changed everything.").
And just wait to see this story about raising the debt ceiling buried by the media so that when Republicans claim during the mid-term elections: "we are the fiscally-conservative party" middle-America will stop and say, "hmmm, okay."

9:45 AM  
Anonymous clarence swinney said...

KING OF DEBT
Reagan was King with 1700 Billon and Bush will replace him with an awesome 3759 Billion Increase in Debt.

Bush 2005 KING OF DEBT--
Budget-Five Year Forecast--Historical Tables 116-117.

Republicans scream--CUT GOVERNMENT--BALANCE THE BUDGET--TAX CUTS WILL PAY THEIR WAY

CUT GOV--Reagan said it many times. But, he increased the size of government more than any president. He increased Spending by 80%. Some Cut.

TAXES PAY THEIR WAY--

Reagan cut by 750 Billion but borrowed 1700 Billion to pay for it.

Reagan Income Tax Revenue Increase was 140 Billion. Little short of 750.

Bush cut 1700 Billion but will borrow 3759 Billion to pay for it.

Democrat Presidents use Fiscal Policies which Spend but Tax to Pay Their Way.

Republican Presidents Spend But Borrow and let our kids pay tomorrow.

From 1921 to 2004 Democrat Presidents created an average of 1,800,000 (rounded)new jobs per year.

Republican Presidents created an average of 800,000 per year.

Which party would you want managing your business.

clarence swinney
political historian
burlington nc--- www.cwswinney@netzero.net quote me

3:41 PM  
Anonymous ash said...

Speaking of that contract, Don, did you catch Newt on Face the Nation this morning? declaring the Republicans the party of reform, while Liberals were merely interested in same-old, same-old, status quo?

The best laugh I've had all year.

7:51 PM  
Blogger NV Mojo said...

Figures. And I am sick and tired of these "fake" lying assholes in the Bush Administration and at the head of the Republican Party in this country. When do we get them for treason and other crimes against America?

7:57 PM  
Anonymous Anonymous said...

This comment has been removed by a blog administrator.

4:36 PM  
Anonymous texpatriot2004 said...

Tell the son-of-a-bitches NO! NO! NO!

5:35 PM  
Anonymous indepat said...

'Puke fiscal conservatism at work for all America

5:36 PM  
Anonymous ticapnews said...

The debt to the penny (through Thursday) $8,087,357,559,005.85
Debt when Shrub took office: $5,727,776,738,304.64
% increase: 41.2%

Estimated debt, January 2009: $11,425,614,948,417.40
% increase: 99%

For comparison, under Clinton:
4 year growth in the debt: $1,029,212,651,712.31 (24%)
8 year growth in the debt: $1,539,684,631,121.04 (36.7%)

5:36 PM  
Anonymous alias: "cutiepie" johnson said...

Thanks, ticapnews. That's very helpful, and helps prove that if you want fiscal conservatism, hire a Democrat.

5:37 PM  
Anonymous texpatriot2004 said...

Repeal those tax cuts for the wealthy you bastards.

2:53 AM  
Anonymous Mossadeq said...

Here is a interesting article on the issue (from the Washington Post):

"What does it do about the deficits? If you believe Putnam, House Majority Leader Tom DeLay and other Republicans, this budget "reduces the deficit in half over four years."

But if you read the fine print, here's what you find: The budget envisages the national debt increasing by $683 billion next year; by $639 billion the second year; by $606 billion the third year; by $610 billion the fourth year; and by $605 billion the fifth year.


What does the budget do for Social Security? It transfers the roughly $150 billion "surplus" in Social Security taxes over this year's Social Security payments to help pay the bills for this year's government spending and to finance the additional $106 billion in tax cuts the president wants to hand out.

2:54 AM  
Anonymous HypnoToad said...

It's going to shake and shatter regardless. Let them do what they want.

Also, people need to know WHAT is being cut. Of course, the mentally challenged won't know what's about to be done to them, so it must be okay then.

2:55 AM  
Anonymous cliss said...

Think of a small family going broke. The credit cards are maxxed out. They have bounced checks. So many that the bank has closed the checking account. Friends and family have been tapped out. The community is losing patience with this bunch.

Disaster is about 1 week away.

Now, multiply this by 288 million, and you've got the U.S. We're going to suck the entire world into our whirlpool.

2:55 AM  
Anonymous ContraBass Black said...

Funny, I thought he started with a surplus.

2:56 AM  
Anonymous texpatriot2004 said...

He did start with a surplus.

2:56 AM  
Anonymous Golden Raisin said...

The spending is so wildly irresponsible

I sometimes think its deliberate and part of the neocons' playbook: run up the debt to insane levels (they've already done that) and ruin the economy to the point that the market eventually crashes and our foreign creditors start redeeming their chits. If we then have domestic economic panic (hyper-inflation, bank closures, bread lines and all the rest), they can declare martial law and stay in power. Our insane national debt is like a tsunami. It builds and builds and builds until sooner or later it has to crash against the shoreline. I always thought Republicans were supposedly the party of tight spending and spartan fiscal policy. No more, it seems. One thing is for sure: you can bet Poppy, Babs and all their kids won't starve.

2:56 AM  
Anonymous fortyfeetunder said...

Excuse me? After these sorry so and so's raised minimum payment percentages on unsecured credit, and added new restrictions on bankruptcies, they expect us to let them skate on their debt responsibilities? Maybe they need to get some fiscal discipline like the average American is dealing with.

3:00 AM  
Anonymous rob of wilmington, del. said...

the neocon playbook is to create an aristocracy. the tax benefits are for those who inherit their wealth, rather than for those who are trying to climb the ladder.

best example is the estate tax (or as Frank Luntz labeled it, the "death tax.") Republicans wouldn't allow an exemption for estates over $2 million in value -- they would only accept no taxation on estates, no matter the size (even as they claimed they were looking out for the small businessman or family farmer).

On the House floor, the former Olympian turned Republican from Kansas, Jim Ryun, talked about all the family farms that would have to be sold if the estate tax wasn't repealed. It was a moving speech, but devoid of facts -- an Iowa State University study found that from 1955-2000, not a single family farm went into bankruptcy or had to be sold at auction because of taxes owed by heirs.

3:01 AM  
Anonymous Rainscents said...

I wonder how LOU Dobb is going to spin this! He is going to hit the fan!

3:01 AM  
Anonymous NI4NI said...

I just don't understand how any economy can be good when it's up to it's eyeballs in debt.
I should have paid more attention in school instead of lookin' up the teacher's dress.

11:39 AM  
Anonymous Justice Is Comin said...

It's downright scary to listen to Dorgan explain it. They stold every dime out of the social security surplus, 224 years worth of presidents combined borrowed less from foreign countries than this moron did in five years. We owe Japan 700 billion, China 250, Germany 100, Taiwan 75, Korea 69. That's only some of them. We even owe Canada 50 billion.

And all the baby boomers are just about to retire. We're heading for the second great depression with this dickwad.

11:39 AM  
Anonymous texpatriot2004 said...

it is scary

11:37 PM  
Anonymous alias: "cutiepie" johnson said...

Reaganomics #2

But at least with Reagan, he realized that his tax cuts of 1981 went too far, and actually raised taxes in 1982 to compensate.

Bush the elder, reneging on his "no new taxes" pledge, raised taxes to try to decrease the deficit.

Clinton, of course, raised taxes modestly for the wealthy, and watched an economic boom (which Republicans falsely take credit for).

And Bush the younger ...

11:38 PM  
Anonymous NI4NI said...

Reaganomics? Is that when low income families get trickled down on?

11:38 PM  
Anonymous proud patriot said...

Bad bad bad , stupid stupid Stupid
seems like a pretty dumb thing to do

11:38 PM  
Anonymous Telly Savalas said...

What's the point of the debt limit? That's not a rhetorical question.

Any credibility Congress gets by putting a debt limit in place is more than wiped out when they have to raise it. So why do they have it in the first place?

11:39 PM  

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