"Don't raise the debt limit, defaulting will teach us a good lesson."
Defaulting on debt is not an unheard of thing for the U.S. Treasury. In 1979, the U.S. failed to make timely payments to all its bondholders. The result was not unlike what would happen if any of us failed to make the minimum amount due to any of your credit cards or other debts. If you miss one payment, the interest rates on all your loans goes up. This is because interest rates are set by a creditor's perceived ability to repay the debt at hand. Missing only a single payment is often enough to downgrade a credit score, for a very long time.
The previous U.S. Treasury default was over a mere $120 million dollars, and occurred in the middle of a debt ceiling debate, similar to the one occurring now. Even though the Treasury had some $800 billion outstanding at the time, the amount actually defaulted on was a very small proportion of the debt. At issue was the fact, that a few checks just didn't get written and sent out, due to bookkeeping and or computer problems, and this caused the federal interest rate to rise by .6%. This raised interest rate was not applied only to the $120 million that was defaulted on, but rather to the entire debt at the time, which was close to a trillion dollars. So, missing the $120 million in payments to bond holders cost the Treasury alone about $6 billion in increased interest.
The debt limit was eventually increased and the U.S. was then able to meet its following obligations, but even after 6 months of paying our bills in full, the interest rate was not decreased.
With a current debt of $14.5 trillion, a tiny rate increase of .6% would add an additional $87 billion to the interest we are already paying. Add to that, that the interest rates of all American debt, both private and public, would go up, further weakening an already unstable market and further tightening the loan industry's purse strings.
It is 30 years later, and the Congressional Freshmen brought into office by the Tea Party want no part of raising the debt limit. They are urging their Republican brethren to stand their ground and refuse to raise the debt limit, and demand that we cut spending, while at the same time refuse any notion of increasing taxes. The consequences of another U.S. default are both real and unrealized by the Tea Party.
Defaulting on our debt has in the past, and will most certainly in the future, cost Americans greatly. Sadly the Tea Party's history books, don't include past Treasury defaults and its effect on the debt and its interest rate.
Thursday, July 28, 2011
Thursday, July 21, 2011
The End of the Shuttle Program
"We should stop wasting money on manned space flight."
As a child of the 70's, the Space Shuttle was the only space craft I saw in operation. The movie "Space Camp" spawned my short lived 'wanting to be an astronaut' fantasy, wherein a group of camp kids get a free ride into space when they are aboard, when the Shuttle accidentally launches. The notion of someday looking down upon the Earth from heaven was and still is very appealing to me.
Within a short period of that I witnessed the Shuttle Challenger explode shortly after launch. Even at the age of 10, I understood that the Shuttle's launch was performed in stages. So when there was an explosion well before the solid rocket boosters were set to detach, I knew something was seriously wrong. While there were reports that some cheered unknowingly at the explosion, I feared the worst. The reality of how dangerous space travel truly is was made plainly clear, as the reporter described the scene as a "...major malfunction."
Less than 20 years later, I would witness another Shuttle come apart during re-entry, as Columbia's heat shield failed to protect the astronauts from the temperatures closing in on 3000 degrees. As with the Challenger, I knew immediately that all those aboard had perished. Space flight is dangerous, as humans have suffered losses in both flight operations and training procedures. The Shuttle was intended to ferry men back and forth into orbit, like our own space taxi, but re-ready procedures proved both lengthy and costly.
Shuttle Atlantis just touched down, for it's last official mission, bringing an end to the program. Shuttles Discovery and Endeavor had already been decommissioned and the hangared strip down process had begun. While Shuttle Enterprise never made it into space, it will be displayed as a museum piece soon. With these ends, so follows our immediate progress into the great unknown. There was a time when man sought to expand his frontiers, with an unbridled enthusiasm. Where has that spirit gone?
Have we lost the notion of how important it is to make our world bigger, our technology more capable, and our reach further? We will now rely on the Russians for space-service. If it was a marathon, I guess the Russians finally won the space race. It is no wonder, we can't even adopt the advance green technologies or solar panel or wind turbines. We have stopped leading the world, in anything but military endeavors.
As a child of the 70's, the Space Shuttle was the only space craft I saw in operation. The movie "Space Camp" spawned my short lived 'wanting to be an astronaut' fantasy, wherein a group of camp kids get a free ride into space when they are aboard, when the Shuttle accidentally launches. The notion of someday looking down upon the Earth from heaven was and still is very appealing to me.
Within a short period of that I witnessed the Shuttle Challenger explode shortly after launch. Even at the age of 10, I understood that the Shuttle's launch was performed in stages. So when there was an explosion well before the solid rocket boosters were set to detach, I knew something was seriously wrong. While there were reports that some cheered unknowingly at the explosion, I feared the worst. The reality of how dangerous space travel truly is was made plainly clear, as the reporter described the scene as a "...major malfunction."
Less than 20 years later, I would witness another Shuttle come apart during re-entry, as Columbia's heat shield failed to protect the astronauts from the temperatures closing in on 3000 degrees. As with the Challenger, I knew immediately that all those aboard had perished. Space flight is dangerous, as humans have suffered losses in both flight operations and training procedures. The Shuttle was intended to ferry men back and forth into orbit, like our own space taxi, but re-ready procedures proved both lengthy and costly.
Shuttle Atlantis just touched down, for it's last official mission, bringing an end to the program. Shuttles Discovery and Endeavor had already been decommissioned and the hangared strip down process had begun. While Shuttle Enterprise never made it into space, it will be displayed as a museum piece soon. With these ends, so follows our immediate progress into the great unknown. There was a time when man sought to expand his frontiers, with an unbridled enthusiasm. Where has that spirit gone?
Have we lost the notion of how important it is to make our world bigger, our technology more capable, and our reach further? We will now rely on the Russians for space-service. If it was a marathon, I guess the Russians finally won the space race. It is no wonder, we can't even adopt the advance green technologies or solar panel or wind turbines. We have stopped leading the world, in anything but military endeavors.
Thursday, July 14, 2011
Debt Ceiling Negotiations
"There are no tax increases of any kind, on the table."
Our country is in debt, and our yearly expenditures exceed the total tax revenue collected. One party doesn't want to raise taxes, or the debt limit, and seeks to cut federal spending to eliminate the deficit, but has no plans on how to recover from the debt. The other party is willing to cut some federal spending, in order to get a debt limit increase, and some new tax revenue, but also has no plans to solve the debt. The curious aspect is that BOTH parties are willing to cut funding to both Social Security and Medicare, to attack the deficit. I always thought one party was different than the other, in that it was supposed to stand up for protecting entitlement programs and responsible tax rates?
In order to merely pay our bills, liberals are willing to provide less health care and means on which to live to those who can least afford to provide for themselves. The only conclusion one can draw from this, is that liberalism is taking on new meaning or the the Democratic party is now conservative. How is it progressive to tell grandma that she gets a few less medical check-ups this year, and that she now will certainly be deciding between food and that prescription medication? Why aren't we standing up to say, "No, no, NO. We ARE going to meet our obligations to our fellow citizens. We ARE going to pay our bills on time, and we ARE going to raise taxes to do so." Surely there's one party is willing to step forward and say that we should meet our financial obligations head-on in a fully responsible manner?
The latest offering by Senatorial Republicans is to simply give President Obama authority to raise the debt limit unilaterally. This measure is intended to take their fingerprints off the matter, so they can go back to their voters and claim, "I didn't raise the debt limit, the President did!" Which I find ironic, because according to the Constitution, the President could have declared the debt limit entirely unconstitutional, and just raised it all by himself. When that notion was floated, Republicans bristled and claimed such efforts, a "silly notion".
In the end, neither party is willing to say that anyone is entitled to current entitlements, both are willing to cut from those who can least afford to sacrifice any more. One expects Republicans to quash compassion, but why are liberals now wearing the same hat, touting the same garbage?
Could it be that both parties are controlled by big money, and that neither has the middle class in mind?
Our country is in debt, and our yearly expenditures exceed the total tax revenue collected. One party doesn't want to raise taxes, or the debt limit, and seeks to cut federal spending to eliminate the deficit, but has no plans on how to recover from the debt. The other party is willing to cut some federal spending, in order to get a debt limit increase, and some new tax revenue, but also has no plans to solve the debt. The curious aspect is that BOTH parties are willing to cut funding to both Social Security and Medicare, to attack the deficit. I always thought one party was different than the other, in that it was supposed to stand up for protecting entitlement programs and responsible tax rates?
In order to merely pay our bills, liberals are willing to provide less health care and means on which to live to those who can least afford to provide for themselves. The only conclusion one can draw from this, is that liberalism is taking on new meaning or the the Democratic party is now conservative. How is it progressive to tell grandma that she gets a few less medical check-ups this year, and that she now will certainly be deciding between food and that prescription medication? Why aren't we standing up to say, "No, no, NO. We ARE going to meet our obligations to our fellow citizens. We ARE going to pay our bills on time, and we ARE going to raise taxes to do so." Surely there's one party is willing to step forward and say that we should meet our financial obligations head-on in a fully responsible manner?
The latest offering by Senatorial Republicans is to simply give President Obama authority to raise the debt limit unilaterally. This measure is intended to take their fingerprints off the matter, so they can go back to their voters and claim, "I didn't raise the debt limit, the President did!" Which I find ironic, because according to the Constitution, the President could have declared the debt limit entirely unconstitutional, and just raised it all by himself. When that notion was floated, Republicans bristled and claimed such efforts, a "silly notion".
In the end, neither party is willing to say that anyone is entitled to current entitlements, both are willing to cut from those who can least afford to sacrifice any more. One expects Republicans to quash compassion, but why are liberals now wearing the same hat, touting the same garbage?
Could it be that both parties are controlled by big money, and that neither has the middle class in mind?
Thursday, July 7, 2011
Overzealous Prosecutions
"That witch killed her kid, she's gotta die."
And this is how people get both longer sentences than they truly deserve and how some guilty are allowed to go free. With Casey Anthony, the prosecution 'thought' they could prove murder one, and because of that mistake, someone responsible for the death of her own child, will end up spending less than 5 years in prison.
Casey is now protected by double jeopardy, and can not be retried on lesser charges, for the same crime.
The problem of course is our appetite for revenge. A child is dead, and the mother had something to do with it. After that story hits the news, constituents start screaming for blood. Rather than follow where the evidence leads, prosecutors here allowed screaming mob obnoxious talk show hosts to set the agenda. Had the prosecutor went with a less charge, he would have been accused of being soft on crime. In the end, we are still Rome, and those in attendance at the Colosseum, still want blood for blood.
In this instance justice was served because jurors were unable or unwilling to arrive at the prosecutors' position. Believe it or not, the worse outcome would have been a finding of guilt, without a reasonable doubt. Now, conservatives are all up in arms, because a child killer will end up walking after merely a few more months behind bars.
If only prosecutors weren't elected based on their 'perceived' stance on crime... If only talk show hosts didn't whip listeners and viewers into frothing frenzies, over allegations and accusations, but merely reported on JURY's 'findings'... If ONLY the media treated people like 'innocent' civilians, UNTIL they are found guilty in a court of law.
If only...
And this is how people get both longer sentences than they truly deserve and how some guilty are allowed to go free. With Casey Anthony, the prosecution 'thought' they could prove murder one, and because of that mistake, someone responsible for the death of her own child, will end up spending less than 5 years in prison.
Casey is now protected by double jeopardy, and can not be retried on lesser charges, for the same crime.
The problem of course is our appetite for revenge. A child is dead, and the mother had something to do with it. After that story hits the news, constituents start screaming for blood. Rather than follow where the evidence leads, prosecutors here allowed screaming mob obnoxious talk show hosts to set the agenda. Had the prosecutor went with a less charge, he would have been accused of being soft on crime. In the end, we are still Rome, and those in attendance at the Colosseum, still want blood for blood.
In this instance justice was served because jurors were unable or unwilling to arrive at the prosecutors' position. Believe it or not, the worse outcome would have been a finding of guilt, without a reasonable doubt. Now, conservatives are all up in arms, because a child killer will end up walking after merely a few more months behind bars.
If only prosecutors weren't elected based on their 'perceived' stance on crime... If only talk show hosts didn't whip listeners and viewers into frothing frenzies, over allegations and accusations, but merely reported on JURY's 'findings'... If ONLY the media treated people like 'innocent' civilians, UNTIL they are found guilty in a court of law.
If only...
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