Debt Crisis Looms. Congress Is Broken. There Is A Fix. All That Is Needed Is Some Honesty Out Of Washington.

Your laughing, right? Honesty out of Washington? When is the last time we saw honesty in Washington? Well, enjoy the chuckle because you may want to cry before you finish reading this post.

Debt Crisis Looms

What is the biggest threat to America? Last night, Mitt Romney said it was a nuclear Iran. One friend of mine says if we don’t fix the illegal immigration problem, nothing else will matter because in a short time third world immigrants will be the majority in America. Hard to argue with that. Another friend would say if we don’t stop the stealth destruction of our country by the proponents of Agenda 21 and Smart Growth and Sustainable Living, we will wake up one morning and the socialist will have achieved their take over of America. Also hard to argue with. However, for me, the debt crisis is the greatest threat to America.

For the purposes of this post I am assuming that Mitt Romney will win the election for president. If Obama were to win, I would have no hope for America.

So, after the election we will have a lame duck congress and a lame duck president. They will be charged with dealing with the immediate taxmagedon and debt ceiling breach and the sequestering of $500 billion from the military budget. The payroll tax cut is expiring, the so-called Bush tax cuts are expiring, and some of the ObamaCare taxes are about to kick-in. Moody’s and Standard&Poor are threatening to cut America’s credit rating again and they probably will. I predict that there will be a lot of gnashing of teeth and threats from both sides of the aisle and in the end the lame ducks will kick the can down the road for three or six months more. In other words, the looming debt crisis will continue and the new Romney administration will, in my opinion, have no choice but to get serious about eliminating deficits and paying down the debt or risk a complete financial, economic, monetary collapse.

Congress is Broken

The approval rating of Congress is as low as it has ever been and deservedly so. Most people have a low opinion of Congress because the their pork barrel spending or because of gridlock. Me? I wish Congress had been gridlocked for the last fifty years. But, I am about to tell you why Americans should hold Congress in contempt. Congress is not only broken it has been perpetrating a fraud against the citizens of the United States for a very long time.

I said in yesterday’s post how much I appreciate political bloggers because I learn so much from them. Alex Gimarc wrote a post last week a American Thinker that for me was an education in why our government keeps on growing no matter which party is in control of Congress. I learned something about congressional budgeting that I should have known but didn’t. Please consider this article a must read.

Alex first takes us back to 1974:

In 1974, a Democrat-dominated Congress in the throes of Watergate passed the Congressional Budget Act of 1974. Among other things, the act established the Congressional Budget Office and codified the notion of baseline budgeting. A budgetary baseline increases about 6% per year. Any expenditure less than that 6% yearly increase is portrayed as a budget cut by Democrats and their media lackeys.

That one little paragraph explains so much. Since 1974, each year every department and agency of the federal government gets a six percent increase over what they spent in the previous fiscal year unless Congress specifically gives them more or gives them less. And, because of the Sesame Street accounting practices of the CBO, if Congress fives a department an increase in their budget of less than 6%, it is scored as a budget cut, for which our Congressmen and Senators will brag to the public they are cutting the budget. Let me state it another way. Under the Congressional Budget Act of 1974. Romney could come into office in January and push through a 5% across tha board cut for all of government and all of government could actually get a 1% increase in their budgets. Do we ever hear anybody in Washington talk about this? Of course not. This is the best kept secret in Washington. Although the 1974 Act was passed by Democrats, no Republican has to my knowledge ever voiced a concern. Since 1974 out Congress and Presidents have been defrauding the American citizens. But, hang on, because it gets worse.

One of the games played by Democrats under this law is the passage of stimulus bills. When a stimulus is passed, it adds immediately to the budget baseline for that year and then for every succeeding year. So the Obama-Pelosi-Reid stimulus passed in 2009 added $787 billion of new spending to the federal budget in 2009. It then went on to add $834 billion of new spending in 2010 ($787 billion times 1.06 for the 6% yearly increase); $884 billion in 2011; and finally $937 billion in 2012. Over the last four years, this totals $3,442 billion more than would have been budgeted through the normal process — which is precisely why the Democrats wanted it passed as a stimulus.

That is how we get $1.4 trillion deficits for the last four years. And, it will happen again in the fiscal 2013 budget or continuing resolution that will  happen in the next one or two months.

There is a Fix

The fix should be obvious. And frankly, it can be done without all that much pain. First the 1974 Congressional Budget Act must be repealed. Every department of government should have justify any increase in spending and Congress would have to approve it. And, the CBO must use accounting practices that are closer to the GAAP that all businesses must use.

Secondly, if we cut from the 2013 fiscal budget the 6% compounded Obama 2009 stimulus package, we would reduce our deficits by $1 trillion. Who can argue that prior to the housing bubble collapse in 2008 that we didn’t have all the government we needed, which without the stimulus has incresed at 6% each year. Minimum pain. Still, we would have continuing deficits of about three to four hundred billion per year.  But, Mr. Gimarc tells us there were two more Reid/Pelosi stimulus packages in 2007 of $ 152 billion and in 2008 of $146 billion. These two stimuli became part of the baseline budgets and have been growing at a compounded rate of 6% ever since. So, if we were to cut those from the 2013 budget as well as the 2009 stimulus we would have a balanced and with the other plans Romney is planning we would have a surplus and could start paying-down our debt. All of that theoretically could be done at minimum pain.

All that is needed is some Honesty Out of Washington

Seriously, that is all it would take; one honest man. That man would have to be Mitt Romney. If he went before the people and explained what I have written above, he could pressure Congress to change its ways and make the cuts that would solve our debt crisis. Will he do it? Sadly, I have my doubts. The fraud that is Congress is well intrenched. I suppose it depends on who Mitt Romney really is. Is he the Republican statist that has already been bought by Goldman Sachs and friends as many libertarians believe he is? Or, is he the man described by Ann Romney and others at the Republican national Convention some weeks back? maybe he is somewhere between those two descriptions. If he wins in November, we will soon find out. If he loses, then none of this matters and the debt time bomb will surely go off in the next five to ten years.

Well, now you know what I’m thinking.  What are your thoughts?

29 thoughts on “Debt Crisis Looms. Congress Is Broken. There Is A Fix. All That Is Needed Is Some Honesty Out Of Washington.

  1. Lets hope we at least get a chance to find out about Romney. We sure cannot do worse…on the bright side.

    1. I am in agreement, B. We cannot do worse. We have seen what almost 4 years of this administration has done, does it take much to understand that it has not worked? Not sure what people are thinking and if they apply the same logic to their everyday life, they must surely be screw-ups. Well, that is what I think, anyway.

      1. Just a couple more days of paper signing and formalities and should be able to breath. Thank you for asking and yes the grandbaby is fine…children have a way of putting things in perspective for us. We sat and “watched the Fords go by” on his front porch, as my Mom used to say, had some time to reflect on what is really important in life, so it tends to renew my resolve to fight this administration and change things for the better.

  2. I don’t think it will ever be solved. Governments exist to expand. And every time we try to cut someone starts whining: No no…we need the $2,000 allocated to albino cowboys named Billy who sing falsetto. It’s important!

    Well if we can’t cut that how are we supposed to cut billions?

  3. Agreed…
    More than anything else, our long-term debt is the single greatest threat to U.S. national security. It is a ticking nuclear bomb.

    The fiscal cliff is the short-term enemy we must meet and defeat on the battlefield.

    Obamacare is the philanthropic veiled enemy within.

    Green energy policy is the sniper that shoots middle-income pocketbooks with deadly precision.

    Your suggestions have merit, but can they win the battles we are in and defeat the enemy? Show me the math and I’ll become a believer.

  4. The GOP passed H.R. 920, the Baseline Reform Act, earlier this year to eliminate the current services baseline clause. Of course, Reid never let the Senate version, S. 1896, see the light of day in the Senate.

    “Although the 1974 Act was passed by Democrats, no Republican has to my knowledge ever voiced a concern”

    It was republican Richard Nixon that signed that bill into law.

    He also believed it actually worked against Congress despite the intent to limit the President from impounding funding. This is likely why you’ll never see any POTUS, regardless of party affiliation, force the issue.

    I’m afraid the only hope for shining a bright light on this issue are blogs like this one. It’s really a leveraging issue between the branches and neither side would be willing to give any up to the other branch.

  5. Jim, I have pondered this very question many times. Please consider this, campaign reform with term limits.

    We need term limits for Congress badly. This would stop these professional politicians from 30 years of corruption. Barney Frank comes to mind. Secondly, campaign contributions must be limited. Lobbying should be forbidden. In the case where Congressmen need additional info- there are other means available to get credible, reliable info without greasing our politicians. Panels, committees, that sort of thing.

    So campaign reform, I believe, must come first. That has to happen before any honesty can emerge. I’d be interested in hearing Rep Mother’s opinion.

    1. I would go along with term limits. Wonder why those in Congress don’t like the idea? Could it be all the perks that go along with what the position has to offer? I pay their salaries, yet I am the one living a simple life, while the vast majority of Congress members end up millionaires. Is there any logic in this, I ask you?

  6. If the lame duck congress doesn’t address the fiscal cliff then I am confident a Romney administration and new congress can roll back the tax cuts for the start of 2013–but for a lot of folks, that extra money coming out of their paychecks for a month or so could really hurt.
    The Senate is vitally important–we need a Republican majority and barring that, are there enough decent Democrats to kick Reid out as Senate leader? If he remains in place it will still be very difficult to get anything accomplished. Reid is probably the most partisan, self-serving politician in congress.

    1. You are absolutely right, Freedom. Without control of the Senate, the future will look very dim, I am afraid. If Romney wins big enough and we still don’t get control of the Senate, there may be ebough scared Democrats in the Senate to want to move more to the center. It’s a long shot though.

  7. Everyone agrees Congress is broken —except for their own representative or senator. This leads us to conclude that our problem with Congress isn’t congress … it is the idiots who keep voting for the same nitwits election after election.

    Now of course, our system isn’t perfect—not by a long shot. But there is something fundamentally wrong with putting the weasels in charge of the henhouse. The good news is Congress, not the president, is responsible for our national budget. The bad news is the Congress is corrupt.

    I agree with your fix, but with this one exception. Congress has no business spending money on anything not specifically enumerated within the United States Constitution. Before Congress passes a spending bill, they should be required to specify the Constitutional provision that makes those expenditures “legal.” Just between you and me, Jim … I’m not holding my breath.

    By the way, after 1 January 2013, Obama Care is about to increase under-employment by another 180,000 people as small franchise restaurants re-designate their full time employees to part time status. And you know that tax that Obama said he would never pass for anyone making less than $250,000 a year? Well, according to the owner of Subway, Obama-Care will force an increase in the cost of sandwiches by fifty-cents.

    Obama is a criminal; we must elect Romney!

    1. Your point about voter responsiblity is spot on, Mustang. Yet, because so many voters are stupid or gullable, isn’t that eveb more reason that politicians shouldd honorable and honest. Brian talked about term limits. But, how to we get dishonest politicians to vote for term limits on themselves. Yeah, I’m not holding my breath either,

  8. I am someone who felt that if Romney got elected he wouldn’t so what really needed to be done to stave off the impending disaster, but we know with Obama that disaster is certain so we must take out chances with Romney and hope for the best.

  9. Your post is very relevant. We have a crisis, even if our leaders refuse to admit the truth.

    I have long been a fan of term limits, even though commenters on my own blog always come up with reasons why they should not be implemented. If lobbying was illegal, term limits would be very effective, in my opinion.

    Personally, I often wonder if we shouldn’t go back to the way it used to be. Senators should be appointed by the states to look after their interests. Representatives should continue to be elected to represent the interests of the people. The original purpose of Congress and the United States Senate has been perverted far beyond the intent of the founders.

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