Tuesday, July 26, 2011

Obama’s prime-time lies and deception

As anticipated, we get another highly partisan, highly inaccurate and misleading speech from the Great Divider…and it didn’t take long for the Alinsky drinking game to start:

1:43 – ‘investments’
2:49 – ‘balanced’ approach
2:54 – ‘sacrifice’
5:14 – That’s not right. It’s not ‘fair’.
5:55 – ‘millionaires and billionaires’
5:57 – ‘share in the sacrifice’

Then between all the rhetoric and blame, the attacks on Bush, the rich, even his own party, why a Democrat proposal of promised cuts and immediate taxes is better than a desired Republican focus of cutting government spending (when neither of the current incarnations are up to the challenge of fiscal sanity, IMHO), and so forth, Obama once again invokes Reagan out of context from a 1982 speech, “Would you rather reduce deficits and interest rates by raising revenue from those who are not now paying their fair share, or would you rather accept larger budget deficits, higher interest rates, and higher unemployment? And I think I know your answer.” Makes one scratch their head and go, ‘huh’, right? Well, once in context, you'd realize, as a Washington Times editorial makes the case, Obama misappropriates the Gipper to justify tax hikes:

At that time Mr. Reagan had reluctantly agreed to a deal in which the Democratic Congress promised to reduce spending by $3 for every $1 in new revenue. But this Faustian bargain only demonstrates why House Speaker John A. Boehner, Ohio Republican, is holding the line on taxes today. During the Reagan years, Congress went ahead and imposed the agreed-on taxes but quickly broke the spending-cut pledge and instead pursued even greater budget increases. As Reagan later lamented, "Congress never cut spending by even one penny."

But Mr. Reagan would not be fooled again. In a 1983 debt-ceiling debate, Reagan threatened to veto any measure that contained tax hikes. "I am unalterably opposed to Congress' efforts to raise taxes on individuals and businesses," he said. His administration "did not come to Washington to raise the peoples' taxes. We came here to restore opportunity and get this economy moving again. We do not face large deficits because Americans aren't taxed enough. We face those deficits because the Congress still spends too much."

Also to note, in that same ’82 speech, Reagan pushed for a balanced budget amendment. Obama didn’t feel the need to mention that, did he? Oh, and while he was quoting Reagan, Obama forgot to quote himself. Remember when he was against it before he was for it, “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure,” and after further rhetorical elaborations, voted against a hike.  He must have just forgotten about that, huh?  Obama must have also lost sight of the fact that the U.S. holds the industrialized world's most progressive income tax, but it's more likely that he just doesn't think it's progressive, or high, enough!

I can’t begin to tell you how many times I found myself calling BS on so many of Obama’s statements, as they were blatantly misleading, and some just outright untrue. Obama said, "Understand, raising the debt ceiling does not allow Congress to spend more money, it simply gives our country the ability to pay the bills that Congress has already racked up."  And just look what your administration has racked up in the past few years!  But even so, this is BS, as we currently have the tax revenues to cover the most important debt obligations, and I'll explain in a moment.  Obama went on to say, "We have to do it by next Tuesday, Aug. 2nd, or else we won't be able to pay all of our bills."  Also BS, this date is as arbitrary as anything else Obama and Geithner have come up with.  And after blaming Republicans for risking “America’s first-ever default,” which is technically incorrect, as there have been defaults in 1933 and another in 1979, Obama said, “If that happens, and we default, we would not have enough money to pay all of our bills – bills that include monthly Social Security checks, veterans’ benefits, and the government contracts we’ve signed with thousands of businesses.“ Other than repeating myself from a number of recent posts, I’ll use a couple of new sources to dispel these outright falsehoods and scare tactics.

On the matter of ‘default’, a New York Post columnist explains, “there's no reason for default even if there's never a debt-ceiling hike.”

Even if Congress and the president remain deadlocked past the Aug. 2 deadline, when the feds are supposed to run out of money to pay all their bills, a default still leaves them with plenty of cash to pay the most important ones. Uncle Sam takes in $2 trillion in tax revenues yearly and spends around $200 billion on debt interest. Geithner can cover the bond payments just fine -- and hold off on sending out other checks. Of course, it wouldn't be pretty to stiff defense contractors and agribiz giants while a budget deal is hammered out, but it's way better than the financial calamity a default is likely to spark.

So, Obama’s claim of default based on whatever happens with the debt ceiling is a lie. But to address the other side of the lie, paying out beneficiaries, I’ll turn to Prof. Michael McConnell to cover a portion of that one, as he states, “[Obama] must not be consulting with his lawyers, because this attempt to scare Social Security recipients is without legal foundation. As recently explained,…reaching the debt ceiling will not affect the ability of the Social Security Administration to pay its obligations.”

The Social Security trust fund holds about $2.4 trillion in U.S. Treasury bonds, which its trustees are legally entitled to redeem whenever Social Security is running a current account deficit. Thus, if we reach the debt ceiling (which I continue to think is a remote prospect, even if less remote than it seemed a week ago), this is what will happen. The Social Security trust fund will go to Treasury and cash in some of its securities, using the proceeds to send checks to recipients. Each dollar of debt that is redeemed will lower the outstanding public debt by a dollar. That enables the Treasury to borrow another dollar, without violating the debt ceiling. The debt ceiling is not a prohibition on borrowing new money; it is a prohibition on increasing the total level of public indebtedness.

Similar arguments can be made for all the other benefits Obama feels the need to hold hostage.

Also, Obama made the statement that “For the first time in history, our country’s Triple A credit rating would be downgraded.” Although I’ve seen some in the media begin to acknowledge this, where has Obama been? Egan Jones already cut our AAA rating a few weekends ago, Weiss and Dagong Global downgraded the U.S. last week, and it’s very likely that Moody’s, S&P and Fitch will follow suit, all having nothing to do with the debt ceiling.  These ratings are based on speculative assumptions that the U.S. might falter on its debt obligations down the road, not due to the debt limit, but the borrow-and-spend mentality of the federal government and its eventual inability to cover the growing debt. But even then, any default won’t happen on Aug. 2nd, or perhaps even the remainder of the year, depending on how soon we put the brakes on our current spending trajectory.  Also around the same time as that downgrade, Goldman Sachs departed from government estimates and further slashed our growth forecast.  Once again, Obama has defaulted back to the mentality that his administration came in with, "never let a crisis go to waste."

Obama ventured on to spell out a doomsday scenario if Republicans didn’t drop their plan and follow the Democrats’ lead. Yeah, that’s worked wonders thus far, hasn’t it? And then continuing to drone on, and on…and on, leading up to a final message of compromise (remember, that means ‘cave’) in an attempt to rally the leftist troops in flooding their Congress members with what he actually desires, instead of what the Will of the People want. You’re welcome to enjoy the rest below, but just following the lies and deception has exhausted my senses…

If you ask me, although I don’t think the Speaker’s latest proposal is a serious one that conservatives could or should reasonably rally behind, Boehner did manage to come across more presidential than the placeholder in the East Room…

Though, it’s pretty amazing how both Boehner, or McConnell for that matter, can get in front of the cameras and give a potentially riveting speech with tough talk…then once you make sense of the words he's saying, you realize that they're not going to translate into principled ACTION. Although, I will commend the Speaker for at least getting out there, responding immediately to the President’s address, and explaining the simple fact that all Obama wants is a ‘blank check’ to raise the debt ceiling; it’d still be courageous if he could share (if he even believes) the information surrounding the actual prospects that would lead to default, as well as the obligations of paying out beneficiaries, and how the tax revenues currently collected cover our necessities.  You know, like the info I just shared with you and CONSERVATIVES are speaking out about!

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