Monday, August 01, 2011

Five Big Debt Debate Lies



Transparency: After months of dire warnings about not raising the debt ceiling, the public is still not convinced it's a big deal. Maybe that's because they've been repeatedly lied to about what's at stake.

Even with the clock ticking down, twice as many Americans still say lawmakers should vote against a debt ceiling hike as say they should vote for it. President Obama has said this is because the public isn't paying attention.

Just as likely is that they are paying attention, but have been turned off by the many falsehoods being bandied about — most of them by Obama himself. The five big ones:

Aug. 2 is the drop-dead deadline: This has been the White House line for months, and it's so widely accepted that several news outlets have countdown clocks on their sites. It's not true.

The New York Times on Tuesday reported that the government will have enough cash to pay all its bills until Aug. 10. And Wells Fargo Securities chief economist John Silvia says the debt ceiling won't be hit until sometime in September.

We risk defaulting on the debt: Despite countless warnings, there's zero chance the federal government will default, since each month the government takes in far more in taxes and fees than it pays in interest.

The White House itself, while publicly clanging the default alarm, has been privately reassuring banks that it won't default on the debt, even if the debt ceiling isn't raised.

Social Security payments are at risk: "I cannot guarantee that those checks go out on Aug. 3 if we haven't resolved this issue, because there may simply not be the money in the coffers to do it," Obama claimed earlier this month.

Also a complete fabrication. In June, for example, the government took in more than $250 billion, according to Treasury's monthly report. That was enough to pay that month's worth of interest, plus all Social Security, Medicare, Medicaid and veterans benefits, and all Defense and Homeland Security costs, with billions of dollars left over.

A long-term debt ceiling hike is a must: Democrats refuse to sign a short-term hike, claiming that poses a risk to the economy. "A short-term extension would not provide the certainty the markets are looking for," Senate Majority Leader Harry Reid claimed. Obama has echoed that concern.

But it's a phony connection. For example, Congress raised the debt ceiling 17 times during President Reagan's eight years in office — an average of once every 5 1/2 months — and the economy boomed.

Obama wants a deal: We can't prove this is a lie, but Obama's given every indication that it is. After all, he's done nothing to lead this to a resolution and plenty to disrupt it, all while claiming he wants an agreement. More likely, Obama thinks a debt crisis he can pin on Republicans is the path to victory in 2012.

There's no question that failing to raise the debt ceiling in a timely fashion would be economically disruptive, if for no other reason than that the economy is so anemic it can ill afford any shock.

But it's also clear that, even if Congress misses the Tuesday deadline, the sun will still come up Aug. 3, and many of Obama's big lies will be exposed.

Sunday, July 31, 2011

Take A Chainsaw To The Budget By John Stossel


On my show tonight at 10pm, I lay out a way to completely get rid of the deficit.

I don't claim to be a budget expert. But others, such as Chris Edwards at Cato and Stuart Butler at Heritage, are. They found lots of serious cuts. My staff found a few more, and put together a list that would completely balance the budget:

Defense cut by 2/3: $475 billion (Federal Budget, pg. 58)

Medicare/Medicaid*: $441 billion (Cato Institute)

Social Security Means Testing: $170 billion (Heritage Foundation)

Eliminate Dept. of Education (includes Pell Grants): $106.9 billion (Cato Institute)

Social Security*: $85.7 billion (Cato Institute)

Eliminate Dept. of Transportation: $84.8 billion (Cato Institute)

Tax Amnesty: $80 billion (Rep. Jared Polis D-Co.)

Eliminate Dept. of Labor*: $78.6 billion (Department of Labor and White House)

Eliminate HUD: $60.8 billion (Cato Institute)

Eliminate Dept. of Agriculture*: $33 billion (Cato Institute)

Cut civilian employee compensation: $30 billion (Cato Institute)

Stop maintaining vacant federal property: $25 billion (Heritage Foundation)

Eliminate Foreign Aid: $21.2 billion (Cato Institute)

Eliminate Dept. of Energy*: $20.8 billion (Cato Institute)

Eliminate NASA: $19.6 billion (Cato Institute)

Federal Drug War: $15 billion (White House)

Earmark moratorium: $16 billion (Heritage Foundation)

Eliminate Fannie/Freddie Subsidies: $14 billion (Federal Housing Finance Agency (p. 10))

Eliminate Dept. of Commerce: $13.9 billion (Department of Commerce)

Eliminate Dept. of Interior: $12 billion (White House)

Legalize Pot, Online gambling, Immigrants: $12 billion (Rep. Jared Polis D-Co.)

Privatize Army Corps of Engineers: $10.6 billion (Cato Institute)

Cut federal employee travel budget: $10 billion (Heritage Foundation)

Eliminate National Science Foundation: $7.4 billion (National Science Foundation)

End EPA’s State and Local grants: $6.5 billion (Cato Institute)

Repeal Davis-Bacon: $6 billion (Republican Study Committee)

Privatize TSA: $5.7 billion (Federal Budget)

Cut Dept. of Justice’s State and Local grants: $5 billion (Heritage Foundation)

Privatize Post Office: $4 billion (White House)

Eliminate Small Business Administration: $1.8 billion (Small Business Administration)

Lease coastal plain of ANWR: $1.5 billion (Heritage Foundation)

Eliminate Federal Flood Insurance: $1.3 billion (CBO, pg. 3)

Abolish SEC: $1.3 billion (SEC)

Eliminate Corporation for National Community Service: $1 billion (Cato Institute)

Suspend acquisition of federal office space: $1 billion (Heritage Foundation)

End subsidies for public broadcasting: $500 million (Cato Institute)

Eliminate the Neighborhood Reinvestment Corp: $480 million (Heritage Foundation)

Eliminate the FCC: $439 million (FCC)

Eliminate the Endowments for Arts/Humanities: $332 million (NEA/NEH)

Total Cut: $1,882,619,000,000

Current deficit: $1,645,000,000,000

Surplus Achieved: $237,619,000,000

(Research by Maxim Lott and Charles Couger.)

They don't need to drive us deeper in debt. They choose to. Tune in tonight at 10pm to see how they could choose differently.


Department of Energy is eliminated except for Nuclear arms maintenance

Department of Agriculture is eliminated, except for food programs for the needy

Department of Labor is eliminated, except for 26-week unemployment benefits

Defense budget would still be $243 billion, more than twice what the next highest country (China) spends

Medicare and Medicaid savings breakdown:

Block grant Medicaid and freeze spending (226)

Repeal 2010 healthcare law (87)

Increase Medicare premiums (39.8)

Cut non-Medicare premiums (37.7)

Cut Medicare payment error rate by 50% (28.6)

Increase Medicare deductibles (12.6)

Tort Reform (10)

Social Security savings breakdown:

Price index initial benefits** 41.1

Raise the normal retirement age** 31.4

Cut Social Security disability program by 10% 13.2