Debt Ceiling Debate – The Beginning of the End

Posted by PITHOCRATES - July 31st, 2011

The Republicans will get Screwed

Politics is a murky business.  You hear a lot of sound bites from politicians.  And a lot of spin from the ‘objective’ media.  (I put ‘objective’ in quotes because it’s easier than writing that I’m winking.)  But you don’t know what’s going on behind closed doors.  What kind of deals they’re making. 

There’ve been a lot of news updates today on the negotiations to raise the debt ceiling.  From there was a deal to Nancy Pelosi saying the House Democrats may not support the Senate plan Harry Reid delivers.

So we don’t really know anything yet.  About the only thing we can know for certain is that the Republicans will get screwed.  As they always do in these types of deals.

Future Spending Cuts means no Spending Cuts

So what do we know?  Not a lot.  Word is that the Republicans are winning the tax hike fight.  There apparently will be no new taxes.  But they’re going to pay a steep price for that win (see Sen. Reid signs off on bipartisan debt-ceiling compromise by Alexander Bolton posted 7/31/2011 on The Hill).

It would cut about $1 trillion in spending up front and set up a select bicameral committee to put together a future deficit-reduction package worth $1.7 trillion to $1.8 trillion.

Failure of Congress to pass the future deficit-reduction package would automatically trigger cuts to defense spending and Medicare. An aide familiar with the deal said the Medicare cut would not affect beneficiaries. Instead, healthcare providers and insurance companies would see lower payments.

The last bipartisan agreement to cut spending happened over the negotiations to extend the Bush tax cuts last December.  And it was hell to agree on $100 billion in spending cuts.  And when the smoke cleared, that $100 billion was only about $30 billion.  So, yeah, I’m sure picking the $1 trillion in spending cuts will be easy-peasy with bipartisan love.  And no one will use the ‘taking hostages’ language like they did last December.

Future spending cuts?  Yeah, right.  You know what ‘future spending cuts’ mean in Washington?  No spending cuts.

And you couldn’t ask for worse triggers if you’re a Republican.  Gut defense spending?  It’s a dangerous world out there.  And most of the danger stays off our shores because the bad guys fear our military might.  Because our military protects and defends the United States against foreign enemies.  That’s in the Constitution.  One of the things the Commander in Chief is supposed to do.  But national health care isn’t.  And that’s where we’re heading with this trigger.

Provider reimbursements are already pushing providers out of Medicare.  This trigger will kill Medicare.  Which the proponents of Obamacare will love.  You can already hear the rhetoric.  “Oh, no.  Calamity.  Greedy providers dropping out of Medicare?  That’s just mean.  The government must step in and do something to provide for these seniors.  I mean, if no one else will provide for them then government should.”  And then Bob’s your uncle we have a national health service.

Health Care is easy when the Government runs It

And lest we forget the utopia of national health care, let’s take a look at a British newspaper (see NHS funding ‘moved away from poor areas’, says Labour posted 7/31/2011 on The Telegraph).

Changes to funding formulas means poor health rates will be given less consideration when cash is allocated, the party said.

It suggested areas like Manchester and the London borough of Tower Hamlets would lose out to parts of the wealthy south east, such as Surrey and Hampshire.

Labour based the claims on an assessment of funding reforms by public health bodies in Manchester.

But the government has disputed the allegations and claimed Labour’s figures were misleading.

Health care sure is a lot easier when government runs it.

This is the future that trigger gives us.  And if you thought the debate to raise the debt ceiling was bitter, you ain’t seen nothing yet.  The numbers will be bigger.  As will the stakes.  For they will be, after all, life and death. Who gets health care cash.  And who doesn’t.  And dies.

You know the Future is Bad when George Orwell’s 1984 is the Cheerful Option

When a deal is struck and the details come out, there’s a good chance the credit rating agencies aren’t going to be impressed.  Those future spending cuts are exactly the kind of thing they didn’t want to see.  So they will probably still downgrade U.S. sovereign debt.  Which will be a bitter pill to swallow.  After having to witness this farce.

So, without all the details available yet, here is my prediction.  Actually spending cuts will be less than $100 billion.  The credit rating agencies will downgrade the U.S. bond rating.  The trigger will activate the defense and Medicare cuts.  Defense spending will be gutted, leaving the United States the paper tiger it was at the end of the Vietnam War.  Medicare will collapse.  And Obamacare will morph into a full blown national health service.  Government spending will swell to beyond Greece levels.  There will be austerity riots.  Civil war.  Again.  And this experiment in self-government will come to an end.

Either that.  Or something more cheerful like George Orwell‘s 1984.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , ,

Comments are closed.

Blog Home