The "Unsinkable" Titanic

Democrats and a few Republicans must harbor the same mistaken assumption concerning American fiscal policy as that of Philip A. S. Franklin, Vice President of White Star Line when he made a comment in response to the sinking of his company’s ship, the RMS Titanic. He said “I thought her unsinkable and I based [my] opinion on the best expert advice available.” America has hit a fiscal iceberg and the ship is rapidly flooding with debt that will soon drag it to the bottom of the sea floor, and instead of bailing water over the bow, Congress is widening the hole allowing more debt to flood in.

Over the weekend Congress gave final approval to a $1.1 trillion omnibus spending measure that increases budgets for federal government agencies an average of 12 percent and gives federal workers a 2 percent pay increase. The bill also includes 5,224 pet projects known as earmarks at a cost of $4 billion. But what’s a few billion when you’re spending over a trillion dollars; we can afford it, right? (To get an idea of what a trillion dollars looks like, check out this link.)

Here is a small sampling of the disclosed earmarks:

• $2.7 million to support surgical operations in space.
• $200,000 for the Washington National Opera.
• $30,000 for the Woodstock Film Festival Youth Initiative.

The organization Taxpayers for Common Sense is meticulously searching through the bill looking for additional, undisclosed, earmarks. Check them out over the next few weeks to find out what else is being funded.

Democrats are not the only ones to blame for the included earmarks. For example, Republican Sen. Thad Cochran is responsible for the $200,000 Washington National Opera earmark and Republican Sen. Judd Gregg pushed for a $1 million earmark for a renovation of the Portsmouth Music Hall. Lets give these “fiscal conservatives” the recognition they deserve.

America’s debt ceiling now stands at $12.1 trillion. This means America can borrow up to $12.1 trillion and put it on America’s credit card. With such a high credit limit, you would think it very unlikely that Congress would ever exceed this and need to increase its own debt ceiling. Doesn’t Congress’s budget work the same as yours and mine? When you and I reach our credit limit, we have to pay it down before we have credit available to use again. You see, there is an expectation that you and I are responsible with our debt, but these rules do not apply to Congress. With this latest spending bill, Congress will have to increase the debt ceiling to around $14 trillion in order to have enough credit to pay for the increased spending.

If all this spending concerns you, then know this, there are a few fiscally conservative Democrats and Republicans who have your back. This group is claiming that they favor a deficit task force and they want any increase in the debt ceiling to be tied to a creation of this task force. So if I understand this correctly, the debt ceiling will have to be raised in order to create this deficit task force? I don’t know about you, but this concept does little to bolster my confidence in Congress’s ability to control spending.

Perhaps this statement by Majority Whip Richard Durbin will massage your fears of excessive spending; “Yes, we are spending more money to keep cops on the street, to keep neighborhoods safe so that families feel secure. I think it is money well spent.” Well, I feel safer already knowing that my security merely depends upon Congress spending money that it does not have.

America is a large ship equipped with the greatest financial engine that the world has ever known. But any ship, no matter how large will eventually succumb to an uncontrolled flow of water rushing in through a breach in the ships hull. Congress must stop the spending, it must cut up its credit cards and exercise fiscal discipline, else we as a country will find ourselves in a deep, crushing financial abyss.

We may all be singing in green tights

XINHUA: Today’s news from Xinhuanet.com calls attention to yesterday’s warning from the credit rating giant Moody’s that the US is in danger of losing its Aaa credit rating.

This report comes out on the same day Christina Romer, Chairwoman of the President’s Council of Economic Advisers testifies before Congress that the Stimulus Package is a failure. We expect Congress to take her testimony as a call to pass Stimulus II, more of the same. (We report on her testimony here.)

It is appropriate that we use XINHUA as our dateline since the Chinese are our biggest creditors. Did our reckless administration and Congress think that they could spend our way into oblivion and the Chinese wouldn’t notice?

Steven Hess, Moody’s lead analyst for the United States, said in a TV interview that the Aaa rating of the United States is “not guaranteed.” He said if the U.S. deficit does not drop to a sustainable level in the next three to four years, the U.S. rating will be “in jeopardy.” Xinhua News Agency

Just last year Moody’s warned the downgrade could occur in 8-10 years. It appears they are moving up the timetable due to Congress’ spending spree. And yet just the day before Moody’s announcement the Senate tries to pass another spending bill for 1/4 trillion dollars.

Tomorrow we are sure it will be business as usual, more talk of deficit spending, running up our bills with the Chinese. Pretty soon the Chinese will yank our credit card, which will lead to the collapse of our currency and way of life. That may just be what the Alinsky-Cloward-Piven crowd in this administration want.