August 11, 2011
There Are NO Cuts - House Passes Bill To INCREASE Spending By $7 Trillion Over The Next 10 Years
Stop The Budget Lies
1) Corporate journalists and financial pundits know NOTHING about budgets.
2) The Boehner led House passed legislation this evening that INCREASES spending by $7 TRILLION over the next ten years versus a baseline budget that would have increased spending by $9.5 TRILLION over the same period.
3) CBO said today that LESS than 2% of the decrease in the GROWTH of spending will come before the 2012 elections. The remainder come after the election.
4) Defense and war machine spending will grow at 3% per year instead of 4% per year.
5) This was nothing but an agreement to agree at a later date to look for reductions in planned spending GROWTH.
6) A Super Congress will decide on a mix of tax increases and reductions in planned spending growth to meet the targets at a later date.
7) No one in Congress even considered Ron Paul's simple plan, now endorsed by Time Magazine as well as liberal economist Dean Baker, to wipe out $1.6 trillion in fake debt owned by the Federal Reserve. Debt that we owe to ourselves, that is entirely legal to wipe away.
8) CBO says under this plan, the national debt will INCREASE from $14.4 TRILLION currently to more than $25 TRILLION over the next 10 years.
9) The assumption for #8 above assumes the economy grows at 3% per year over the next 10 years, and that Treasury interest rates stay at historic lows. When rates increase, and bet your life that they will, interest on the debt will increase and so will annual deficits, leading to a national debt much higher than the $25 TRILLION that CBO estimates.
10) Regarding Treasury rates and interest on the debt, get educated about a concept called 'DURATION RISK.' Turbo Geithner and his MENSA bed-fellows at Treasury have chosen to finance the great majority of recent and future borrowing in short-term bills, which means that they have to be rolled over frequently. This is perhaps the least-discussed and most dangerous issue related to Treasury debt.
11) If S&P or Moody's has the sack to downgrade the U.S. AAA rating, a Sovereign CDS default will be triggered and Global Financial Armageddon will be unleashed.
12) The bill passed by Boehner tonight was the BEST they could do after 6 weeks of fighting.
Thank you and good night.