Storm Warning

Over the past couple of days, the ratings agency Stardard & Poor's has warned that they will down-grade the US bond rating from AAA...if this does in fact occur (and I see no reason for it not to, with the moribund stupidity of our ruling class thinking that they can spend without consequences) then it will cost vastly more for America to borrow money to pay for government services...The Wall Street Journal's editorial says,

Chief White House economist Austan Goolsbee declared that S&P had made a “political judgment,” and we’d have to agree, though probably not for the same reasons. The bulk of S&P’s analysis is taken up with repeatedly citing what it sees as next-to-no chance that Washington will do anything significant on deficit reduction this year or next.


“The outlook reflects our view of the increased risk that the political negotiations over when and how to address both the medium- and long-term challenges will persist until at least after the national elections in 2012,” said the credit rating outfit. S&P’s announcement is almost wholly a political analysis of the budget outlook.

There is only one reason the rating agency could suddenly have turned this dark on politics in Washington: President Obama’s speech at George Washington University last Wednesday. Mr. Obama’s “fiscal policy” speech may have sent progressive pundits cart-wheeling, but its political effect was to poison the prospect for budget negotiations.

Think about that.  It willl cost much more to fund our government.  Yet, politicians in DC are arguing over cutting less than .35% out of this year's budget.  The Democrats are calling it extreme cuts, while those of o the GOP leadership are calling them "historic."  Both sides are leading us to disaster...the deck chairs have been rearranged enough, it's time to completely balance the budget and stop spending money we don't have.

Don Surber put's it bluntly;

President Obama is a fool. He has been given everything in life and never had to earn it and so he is ignorant about how the financial world operates — and is blissfully incurious about the subject.  He sees business life in cartoonish stereotypes that date to the 1890s. Oh those grand industrialists with their [broken sentence??] He T-totally misjudged the economy in 2009. At a time when smart people would have reined the government in and quit printing money, he went full Keynesian.  Rather than put people back to work, he gave them a federally paid two-year vacation through an extension of unemployment benefits to 99 weeks. Unemployment is earned for 26 weeks. That’s what unemployment insuranc buys. After that it is welfare. Now we have this chump ignoring the reality of the inflation and stagflation he has unleashed upon the Republic. His partisan budget speech was an embarrassment to his supporters and an insult to the American People who in last November’s referendum on Obamanomics overwhelmingly said NO!  Republican gains in Congress were historic, a rebuke of this president’s policies. In January, he piously called for civility. In April, he acted as if he were a ward healer in Chicago. Maybe that is his true aptitude.

That is the state of our leadership.  They are leaderless and floundering with a clue as to what to do.

Balanced Budget Amendment

 Here's my take on a balanced budget amendment:

29th Amendment to the United States Constitution 
The purpose of this Amendment is to provide that the Congress of the United States will not spend monies that exceed those taken by the IRS and Treasury Department.

• Section 1. Prior to each fiscal year, the Congress shall adopt a statement of receipts and outlays for that year in which total outlays are no greater than total receipts. The Congress may amend such statement provided revised outlays are not greater than revised receipts. Whenever three-fifths of the whole number of both Houses shall deem it necessary, Congress in such statement may provide for a specific excess of outlays over receipts by a vote directly to that subject. The Congress and the President shall ensure that actual outlays do not exceed the outlays set forth in such statement.
• Section 2. Total receipts for any fiscal year set forth in the statement adopted pursuant to this article shall not increase by a rate greater than the rate of increase in national income in the last calendar year ending before such fiscal year, unless a majority of the whole number of both Houses of Congress shall have passed a bill directed solely to approving specific additional receipts and such bill has become law.
• Section 3. The Congress may waive the provisions of this article for any fiscal year in which a declaration of war is in effect.
• Section 4. The Congress may not require that the states engage in additional activities without compensation equal to the additional costs.
• Section 5. Total receipts shall include all receipts of the United States except those derived from borrowing and total outlays shall include all outlays of the United States except those for repayment of debt principal.
• Section 6. This article shall take effect for the second fiscal year beginning after its ratification.
• Section 7.  If Congress fails to pass a balanced budget, then both chambers will be disolved and a Special election will be held in 90 days following the recess without passage of a bill.  This election will be fore the remainder of the current session of Congress.

 

The Limited Government Amendment

 From PajamasMedia is an excellent idea...an amendment to the US Constitution that forbids Congress from spending money we don't have:

Section 1: The annual rate of growth in total federal spending shall not exceed the rate of inflation, plus two percentage points, and neither budgeted nor actual spending shall exceed this limit, apart from the exceptions listed below. If no budget is passed, then the most recently passed budget, excluding any exceptions granted in Section 2, shall apply.
Section 2: Defense spending shall not be limited during a time of formally declared war, and further exceptions to the spending limits specified in Section 1 may be granted by the legislatures in three-quarters of the several states, upon the application of two-thirds of both houses of Congress, as they deem necessary; but any such exceptions shall not be included in determining spending limits for subsequent years.
Section 3: The spending limit for the first fiscal year following the cessation of hostilities in a declared war shall be the limit that was established for the fiscal year preceding the declaration of war, excluding any exceptions granted in that year, and adjusted for compounded inflation through all fiscal years completed in the interim.
Section 4: The rate of inflation used in determining spending limits shall be the rate from the most recently completed fiscal year prior to the passage of a given year’s budget, and the method of measuring inflation shall not be altered substantially from long-established norms. Spending that is not defense spending shall not be characterized as such; each exception granted by the states shall apply only to one fiscal year if not granted anew; and every citizen of the United States shall have standing to sue in federal court to enforce the language of this amendment.

 It's time to take back the government from the spendthrifts who have nearly spent our nation into bankruptcy.