Raising the debt ceiling: Look at the big picture

Rep. Eric Cantor leads talks to raise the debt ceiling.

Republican negotiators have walked out of talks to increase the debt ceiling. Why? Let me summarize: Democrats don’t want to cut spending, and Republicans don’t want to raise taxes. To this point, some cuts have been agreed on, but no tax increases are being considered by the Republicans.

These talks are taking place because the debt ceiling needs to be raised in order to avoid a bond default on August 2nd. Ideally, both sides would develop some common sense and use this as an opportunity to set the budget straight, to truly fix it, rather than just make temporary repairs. » read more

The U.S. government needs to have its credit cards cut in half

Treasury Secretary Timothy Geithner wants the United States to keep borrowing.

Let’s say you have an individual that is in deep financial trouble. This person constantly uses their credit cards, spends their money as soon as they get it, and are generally irresponsible. If this person is having trouble paying their mortgage, electric, and grocery bill, what should they do? If you have common sense, you would probably suggest that this person stop nonessential purchases. By doing this, they’ll have enough for their bills, and hopefully, some left over to pay off their credit card balances, which will increase their monthly cash flow.

That solution makes sense, but I have another suggestion. What if the person called up the credit card companies and asked for a credit limit increase? If the banks agreed, they could keep spending lots of money, then use the borrowed funds to take care of their monthly expenses. Eventually, they would reach their credit limit, but they could just make more calls to the credit card companies, and continue to have their credit limit increased. Problem solved! » read more

So much for deficit reduction: CBO says health care bill will be $59 billion in the red

Do you remember how Democrats (rightly) criticized Republicans for passing a prescription drug plan that added to the deficit? Democrats criticized their irresponsible behavior and vowed that health care reform would not only be deficit neutral, but that it would also reduce the deficit. Well, now it looks like the Democrats are being exposed as the hypocrites they are. The Congressional Budget Office found that the proposal would be $59 billion in the red. I can’t to hear how Nancy Pelosi, Harry Reid, and Barack Obama will spin this latest piece of news.