Reaping What We Have Sown: The Debt Standoff

Robert Laszewski

First posted 7/27/11 on Health Policy and Marketplace Review

On this blog a month ago, I said the politicians were starting to scare me with the apparent eagerness of some to actually take the government to default to make a political point.

For weeks we have heard political leaders on both sides tell us there would be no default.

But the two sides have so backed themselves into opposite corners that they have left no opportunity to meet in the middle. Democrats say they have to have a tax increase, or failing that no cuts to entitlements. Republicans say absolutely no tax increases and they need to see entitlement cuts.

This only gets fixed if somebody capitulates. The consequences for any side doing that might be the loss of their own base going forward.

There isn’t any middle ground here because there is no middle ground left in Washington, DC. The last few elections have seen the replacement of “moderates” by evermore far right or far left senators and representatives. This process has only been exacerbated by the gerrymandering of Congressional districts to ensure they were safe for either side but at the same time leading to their coming under the control of party activists pushing their representatives either far left or far right. It also hasn’t helped that each side is so certain of their cause and only has to dial their favorite channel to be assured of that. Continue reading “Reaping What We Have Sown: The Debt Standoff”

The Debt Limit, Medicare, and Medicaid

Joe Paduda

First published 7/13/11 on Managed Care Matters

While the news this morning is not good, I still don’t think Congress will fail to raise the debt limit; the economic consequences would be catastrophic, and there’s too much political risk for either party to allow it to go that far.

Continue reading “The Debt Limit, Medicare, and Medicaid”

The Debt Ceiling Debate – Some Of These People Are Nuts

Robert Laszewski

First posted 6/27/11 on Health Policy and Marketplace Review

I don’t know about you but the politicians are starting to scare me with their inability to make progress in the federal debt limit discussions. Worse, is the apparent eagerness of some to actually take the government to default to make a political point.

I know a lot of conservatives say missing the August 2 deadline isn’t a big deal but I think it is.

The 2011 deficit is projected to be $1.6 trillion, or about $133 billion a month.

Said another way, the 2011 federal budget is $3.8 trillion. But federal revenues are only about $2.2 trillion—a gap of $1.6 trillion.

That means that 40 cents of every dollar the U.S. government spends in 2011 has to be borrowed!
Continue reading “The Debt Ceiling Debate – Some Of These People Are Nuts”