Sunday, October 13, 2013

The SPITE House

Vets protest moved to the now and forever known as...for as long as Obama's in office that is...SPITE House. Barricades dropped at Obama's front yard.  Absolutely gotta love it!  
Wooo-Hoooo vets!!!


You would have had to be under a rock to miss our President stating that recently. He mouthed that repeatedly during the budget debate and the government shutdown. It became his mantra leading up to the impending vote for raising the debt ceiling. The constitutional lawyer was apparently absent the day they taught that we have three co-equal branches of government. More than anything else, Mr. Obama apparently does not understand how the debt ceiling works.

President Obama has regularly repeated “I will not negotiate over the full faith and credit of the United States.” Certainly he may mean that, but it appears he does not really understand the nature and the history of the debt ceiling. Or like many other things he may just be choosing to ignore it.

As with many other things, there was not always a debt ceiling. It was not part of our Constitution, as I am sure the Founders of our country never envisioned us being this much in debt. In fact, until 1917 the Congress had to authorize every specific incident of the country contracting debt. Then the United States entered World War I. Six months after our entry into the war, the Congress passed the Second Liberty Bond Act. The concept of a debt ceiling was created in this act. The law allowed the executive branch to issue bonds or incur other debt without Congressional approval. The debt could be issued up to a pre-established limit. The law was signed by the then most liberal President (Wilson) the country has had (other than the current one). It was passed by a Congress that had a plurality of Republicans in the House and a majority of Democrats in the Senate.

You may wonder what the leaders were thinking at the time. You can surmise that they wanted to provide flexibility to the President during a time of war. But since financial matters originate in the House, they did not want to provide a carte blanche to the executive branch to incur unlimited debt.

Thus, they established that a vote would have to be taken any time the debt ceiling would be raised.

And it has been that way for 96 years. A vote in the Congress is by definition a political event. During the past 96 years there have been numerous votes regarding raising the debt ceiling, and I cannot remember a President flatly stating he will not negotiate.

Just to be clear there have been 53 votes to change the debt ceiling just since 1978. Of those votes only 26 were passed without being tied to other policy issues. The other 27 times (more than half) the debt ceiling was raised as part of either a comprehensive package or tied to significant reforms.

One of the arguments the President makes for his unique position revolves around the manner in which the debt was created. Mr. Obama states that the Congress is just approving the debt for expenditures to which they have previously committed. But our President once again deliberately misstates the facts. He seems to forget that his partner-in-crime, The Undertaker, has not passed a budget out of the U.S. Senate in four years. Well, that is technically incorrect. The Senate did pass a budget, but the Undertaker has ordered Senator Patty Murray, chair of the Senate Budget Committee, to not conference with Paul Ryan and the House Budget Committee as directed by the Constitution.

That is why there has been a fight over a continuing resolution to keep the government operating. We once again have no official budget. But why should the Democrats in the Senate follow the law when they know they are doing the right thing?

One writer stated “I know of no other developed nation that has a debt ceiling. This is purely a recurring symbolic vote to make people feel good by voting against it.” That may have been so when Mr. Obama was in the U.S. Senate and voted against raising the debt ceiling during the Bush Administration. But times have changed. We have a President who has spent recklessly, and we have a Senate that has enabled him by not following their Constitutional obligation and approving a budget which might control that spending.

When Liberals are screaming about how irresponsible those crazy Republicans are with trying to negotiate over the debt ceiling, you can now educate them with facts. Then again, as has been said, facts to a liberal are like kryptonite to Superman.

Since the single topic of the press conference that President Obama staged with his party's media collaborators on Tuesday, 8 October 2013 revolved around the topic of what could happen if the U.S. government chooses to default on its debt obligations, or as will more likely be the case, doesn't default on those obligations and instead doesn't spend as much as U.S. politicians would like it to spend, we thought we would go straight to the bottom line and find out how much the U.S. economy would be affected.

But first, we'll need some numbers, which CNBC tracked down for us:
Treasury Secretary Jack Lew is about to face the very same choices confronted by any financially struggling American household: Which bills to pay and when to pay them. 
If Congress fails to raise the debt ceiling by around Oct. 17, Lew, who has been in the job less than a year, will have to sit at his desk and figure out how to make due on roughly one-third less in the way of government funds for the bills he has to pay.
Because he can no longer borrow, according to the Bipartisan Policy Center, government spending will fall by about 32 percent, or $108 billion in the first month.
On a side note, to put that situation in context, this is no different from what could very well happen just 20 years from now when Social Security's trust fund has been fully depleted, as expected. At that time, the federal government will reduce all payments to Social Security beneficiaries by roughly 26%, unless it significantly increases the amount it borrows. And that's if everything goes as U.S. politicians have promised without any spending reform - this is one reason why the political fight over the debt ceiling and government spending levels is taking place now, because waiting will make needed reforms so much more painful. Not to mention, more necessary.

Back now to the question at hand: how much would a government spending cut of that magnitude affect GDP?

The good news is that we can answer that question with just back-of-the-envelope math! And we can do it on a "daily" basis.

The Multiplier Effect - Source: Lion Investing That $108 billion reduction in federal government spending works out to be $3.6 billion per day. We know that the GDP multiplier for all government spending in the U.S. is 0.6, which we know from research published by the U.S. Federal Reserve applies when the nation's official unemployment rate is over 7.5%. Which is the case at present, thanks to the furloughing of federal government employees! If it were under 7.5%, we would need to use a GDP multiplier of 0.5 to account for the shock of a sudden change in government spending, as government spending is considered to deliver even less of an impact to GDP when the economy is in a healthier state.

Taking our potential government spending reduction of $3.6 billion per day, and multiplying it by our GDP multiplier for government spending of 0.6, we find that the U.S. economy will lose out the equivalent of $2.16 billion worth of GDP per each day that Uncle Sam doesn't have his credit limit reset to a higher level.

Now, to measure the impact upon GDP, just multiply that number by the number of days the U.S. federal government operates in that situation!

If played out through the remaining 78 days of 2013, assuming we stick with President Obama's planned schedule for putting the U.S. federal government into default, that would reduce the nation's GDP for the fourth quarter of 2013 by $168.48 billion.

To put that number into perspective, the fiscal drag produced by the $56.3 billion by which U.S. federal taxes will be higher in the fourth quarter of 2013 than they were in the fourth quarter of 2012 thanks to President Obama's tax hikes that took effect back in January 2013, GDP in the U.S. will be nearly $168.92 billion smaller in 2013-Q4 than it would otherwise have been given the GDP multiplier for taxes.

Why, that's almost exactly the same amount! Perhaps that explains why President Obama has been so intent on doubling down on his "no negotiation with the duly elected representatives of American citizens" strategy - he'll produce twice the negative fiscal drag on the U.S. economy in 2013-Q4 if only he and his supporters can stick with it!

And yes, numbers like those mean a recession, as the Federal Reserve's quantitative easing programs won't produce enough juice for the economy to offset that kind of fiscal drag, offsetting only somewhere between $250 billion and $290 billion of the hit if the debt ceiling isn't increased by 31 December 2013.

Of course, if the debt ceiling situation is resolved sooner than than, it is very much possible that the U.S. will have positive economic growth in 2013-Q4 - only seeing slower growth than it would have had instead. Which is pretty much the story for every quarter during President Obama's entire tenure in office.

NOT good...NOT good at all...

Jihadi media company releases Arabic translation of U.S. Department of Defense handbook on combating terrorism

From Jihad Watch / Posted by Robert Spencer

How did they get this? One might almost think that jihadi sympathizers had infiltrated high levels of the U.S. government. Naaah -- that would be "Islamophobic."

"Jihadi Media Company Releases Arabic Translation Of U.S. Department Of Defense Handbook On Combating Terrorism," from MEMRI, October 4 (thanks to Pamela Geller):

261G.jpg

On October 4, 2013, Fursan Al-Balagh, an independent online media foundation which specializes in translating jihadi materials into various languages, released an Arabic translation of a U.S. Department of Defense handbook that provides protective measures for counter-terrorism personnel.

Happy Birthday NAVY

Happy 238th Birthday to the greatest NAVY the world has ever known...THE UNITED STATES NAVY...and to ALL the sailors who serve or have served. Here's to 238+ more!


Op-ed:
Standing strong a must when surrounded by RINOS
By: Diane Sori

And so it continues…

“Congress must do its job and raise the debt limit to pay the bills we have incurred and avoid default,” White House mouthpiece Jay Carney bloviated a few days ago.

And Jimmy Carter…now the second worst president in US history…called NOT raising the debt ceiling like Obama wants a “threat to the integrity of this government….a short-term deal to avoid default would be better than nothing,” adding but even that “just means you’ll have another crisis.”

This from the man who derailed the American economy before Ronald Reagan came in to clean up his mess.

Then in charged the House Republicans who put forth a compromise bill suggesting a temporary six-week raising of the debt ceiling…suggesting a delay in Obamacare’s tax on medical devices for two years while replacing the lost revenue by altering the way pensions are calculated…suggesting giving increased autonomy to the heads of federal agencies under the constraints of sequester spending levels…and suggesting funding increases for fire suppression.

Notice there was NO delay of the individual mandate section of ObamaCare in the Republican proposal…you know the delay Obama gave businesses…as Boehner and crew caved to Obama’s demand that ObamaCare for the most part is off the negotiation table.

But NO matter as Obama rejected this proposal as the Democrats argued it would set up another fiscal crisis right before the crucial ‘holiday’ shopping season. They can’t even say the Christmas/Hanukkah shopping season now can they…PC sellouts that they are.

By the way, what holiday shopping season as Obama’s failed economic policies have just about destroyed any hope of a successful Christmas/ Hanukkah shopping season that we might have had this year.

But wonders of wonders hell froze over a bit yesterday as ‘Prince’ Harry Reid lost some of his so-thought all encompassing control over the Senate as Senators voted down Obama’s oh so wanted ‘clean’ continuing resolution regarding raising the debt ceiling.

Score one for our side at least.

And so after talks between Obama and House Republicans collapsed on Saturday morning with Obama’s rejection of Boehner’s compromise proposal that would have reopened the government while setting up a budget negotiating process...and after Boehner said the House will present Obama with another compromise bill in a few days...the ire of we patriots throughout the land was awoken en-masse and we can’t say this loud enough, ‘Hey Boehner…NO MORE COMPROMISES PERIOD!

And with ObamaCare the ultimate bargaining chip, it’s high time Boehner puts away his crying towel and stands strong with the wishes of ‘We the People’…uses ObamaCare to our advantage…and NOT accept Obama’s nails on a blackboard bloviations that ObamaCare is off the table.

This is the bottom line…and it’s the ONLY bottom line acceptable…if Obama and the Democrats want the debt ceiling raised then ObamaCare goes…NO ifs, and, or buts…and there is NO compromise on that.

And all that nonsense spewed forth by Obama and the Democrats that if Congress does NOT raise the government’s borrowing limit by October 17th the Treasury will NOT have enough money to cover the country’s bills needs to be strongly countered…for we know that it’s an out-and-out LIE for the true reality is that all that needs to be paid is the interest on the notes due and NOTHING more.

And it’s high past time that this sinks into Boehner’s head and that he throws it back in Obama’s face…that is if he can grow a set and stop cowering in a corner.

Besides, default is NOT an option as defaulting would be in clear violation of our Constitution… the 14th Amendment Section 4, to be exact…which states,
“The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any state shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.”
And if Obama knowingly violates the Constitution…and we know he knows the 14th Amendment because he claims to have been a Constitutional attorney…or perhaps that’s yet another LIE…then that is grounds for immediate impeachment. So Obama does NOT control this game… Republicans do…that is if they can clear the cobwebs from their heads and stop cowering in the corner from fear of the race card being used against them.

And also Republicans need to stuff a sock into the mouths of the kumbaya RINOs who NOT only are doing Obama’s bidding for him…either knowingly or NOT…by attacking the true men of courage within the party for we all know that the reason the likes of John McCain and Lindsey Graham put down and ridicule the likes of Ted Cruz and side with Obama’s demands to raise the debt ceiling is because McCain, Graham, and their buddies..the ‘Old Guard’ if you will…do NOT want to give up power to those like Ted Cruz, Mike Lee, Marco Rubio, and Rand Paul…the ‘New Guard’. And it’s such a sad sight to see when those whose time as party leaders has come and gone can’t step down for to them it’s better to destroy their party from within on their way out then to leave with at least a shred of dignity and honor to their names.
 
These are the men who will NOT stand strong…who continue to push for compromise…who control Boehner and are playing him like a fiddle. But the loser in the end will NOT be Boehner for if he capitulates and gives in to Obama’s demands the losers will be ‘We the People’ and our beloved America…and that is something the RINOs will own…hook…line…and sinker.