Last year congressional Democrats attempted to pass the DISCLOSE (Democracy Is Strengthened by Casting Light On Spending in Elections) Act, which would have required disclosure (hence the strained acronym) of large donors to organizations engaging in political activities, giving the Federal Elections Commission the power to regulate political speech on the Internet, and prohibited federal contractors from donating to political causes. Though the bill passed the House of Representatives, it twice failed to overcome procedural hurdles in the Senate, dooming it to well-deserved defeat.
Walter Reddy is the patriotic organizer of the Committees of Safety, arguably a founding father of the modern Tea Party movement, and his right to keep and bear arms has been taken from him. It doesn't matter that he has committed no crimes, and has not been charged with a crime. A Connecticut judge told him at a hearing that Reddy had no right to an attorney and that "I'm ready to rule" to take his guns away before the patriotic organizer had the chance to say one word in his defense.
With the background of Governor Scott Walker in Wisconsin standing up to public employee unions and those unions, with lots of outside help, trying put an overtly favorable candidate into a theoretically nonpolitical Wisconsin Supreme Court election, one might think that state politicians would be cautious about rolling over and playing dead when public employees unions make outrageous demands.
Regulators in the state of New York proved recently that they have a bit too much time on their hands. New York bureaucrats collectively decided that classic kids’ games such as kickball, tag, Wiffle Ball, and Red Rover pose “a significant risk of injury” and started a campaign to ban these amusements at any recreational facilities. But officials decided to make significant changes to the proposal after media coverage of the plan provoked criticism.
At a Tea Party rally in Madison, Wis., on Saturday, the crackpot left descended into madness again, booing the speakers and the national anthem and hurling "F-bombs" and other foul language at a 14-year-old girl who spoke at the rally.
The victims of the leftist attack were Sarah Palin, "Big" websites founder Andrew Breitbart and homeschooler Tricia Willoughby (picture, left), apparently a regular at Tea Party gatherings. Being home-schooled, young Willoughby is Public Enemy #1 for the school-union fanatics who oppose the spending cuts and pension revisions proposed by Gov. Scott Walker.
First there was Rep. Ron Paul (R-Texas). Then there was Sen. Rand Paul (R-Ky.). Might there soon be Sen. Robert Paul (R-Texas, left) also?
The Fort Worth Star-Telegram reports that this youngest of Ron Paul's sons, a family-practice physician living in Fort Worth, is indeed considering a run for the U.S. Senate in 2012 to replace retiring Republican Sen. Kay Bailey Hutchison.
Within minutes of Monday morning’s announcement by the credit-rating agency Standard & Poor’s that “we have revised our outlook on the long-term rating [for US government debt] to negative from stable,” the Dow Jones Industrial Average dropped 200 points.
In its announcement, the agency tried to soften the blow: "The economy of the U.S. is flexible and highly-diversified, the country’s effective monetary policies have supported output growth while containing inflationary pressures, and a consistent global preference for the U.S. dollar over other currencies gives the country unique external liquidity."
Nevertheless: "Because the U.S. has ... what we consider to be very large budget deficits and rising ... indebtedness, and the path to addressing these is not clear to us, we have revised our outlook." Standard & Poor's also stated: "We believe there is a material risk that U. S. policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013; if an agreement is not reached…this would…render the U.S. fiscal profile meaningfully weaker than [its peers]."
In simple terms, S&P is giving Washington two years to get its act together or it will lose its cherished AAA rating and its continued ability to borrow at historically low rates. And what that means is that interest on the escalating national debt will bury Washington in an avalanche of debt service costs, putting the entire budget spiraling out of control.
Commentators were quick to note the seriousness of the potential downgrade. For example, Alan Ruskin of Deutsche Bank exclaimed, “This is a real shot across the bow for US politicians of all stripes, highlighting the necessity of coming together before the next Presidential election. Not surprisingly, bonds…sold off sharply on the news…a rating downgrade is not an empty threat, and may just usher the political establishment into necessary compromise. ”
Even before Monday's announcement, Steve Rosenbush noted in the Institutional Investor that the Goldilocks fairy tale for government borrowing is about to come to an end: The only reason the U.S. has been able to keep its coveted AAA rating as long as it has is because it has been able to find investors willing to loan money to the federal government at low rates. Those days are now about to become history:
As investors become more skeptical of the U.S.’s ability to meet its fiscal obligations, the ability of the Treasury to borrow at such low rates will come to an abrupt end. That could lead to a sudden and catastrophic increase in U.S. borrowing rates, slowing the economy and limiting the government’s ability to spend. Control of the U.S. economy could shift from the government and the people to their creditors, mirroring the loss of fiscal sovereignty that has accompanied the bailouts of Greece, Ireland and Portugal.
Washington clearly hasn’t found the will to do anything more about cutting government spending than dither, diddle and obfuscate. The recent battle which allegedly cut government spending by a miniscule $38 billion now turns out to have cut real government spending by far less. John Rutledge, a money manager and former Reagan administration official, noted “The spending problem is a very big deal in the U. S., Europe and Japan. Nobody has come close to dealing with it, which will require big cuts in middle class entitlement spending. For the U. S., I don’t think we have the political will to fix the problem. ”
Frustrated fiscal conservatives agree with Rutledge. Explaining his “no” vote on the Continuing Resolution hammered together by the House and the Senate last week, Rep. Mike Pence (R-Ind.) said, “This nation is facing a fiscal crisis of unprecedented proportions. I opposed the Continuing Resolution…because, in the face of our fiscal crisis, this budget deal is not good enough. ” Senator Marco Rubio (R-Fla.) was more succinct: “I just couldn’t vote for this budget deal which is a typical Washington deal. ” He added:
Our debt here is going to double in the next ten years. We have to start solving it now. We can’t wait any longer. We’re running out of time. And this deal just doesn’t do it. In fact, it’s full of a bunch of typical Washington, D.C. gimmicks. I’m just not going to be a part of that.
Even the budget proposals offered by each side of the aisle would, if either were enacted in their entirety, expand the national debt to $20 trillion from its current $14 trillion. According to Moneynews.com, total debt under President Obama’s plan would reach $20.8 trillion in 2016, while Rep. Paul Ryan’s plan “would need a debt ceiling of at least $19.5 trillion. ”
In the absence of any likelihood of politicians growing a backbone, then, bondholders will be the ones reining in out-of-control government spending. They will refuse to allow the purchasing power of their holdings to be frittered away through inflation, and will aggressively seek to offset such risks by charging significant risk premiums. The irresistible force is about to meet the immovable object.
Photo: Standard & Poor's Headquarters, at 55 Water Street in New York.
It is quite appropriate at this time to remind Americans of what the son of Saul Alinsky (left) wrote about Barack Obama back in August 2008 when he received the Democratic nomination for the presidency. It should help explain why Obama acted in such a hostile, ill-mannered way toward Republican Paul Ryan and his plan to reduce the federal debt. As an Alinsky disciple, Obama learned to behave in a manner befitting a socialist revolutionary confronting the pro-capitalist enemy. Obama�s scathing attack was a brilliant Alinsky event.
President Obama announced with a signing statement that he will boldly attack the U.S. Constitution by ignoring the part of the budget law he signed last week that demands defunding four "czar" positions. The law the President plans to ignore is the same budget deal he helped to broker between House Republicans and Senate Democrats, a decision that puts the President squarely at odds with the U.S. Constitution and his own explicit position as a candidate for President.