A Contrived Crisis

Every month, households across the nation consciously or unconsciously perform a simple, but necessary budget exercise.  They look at what bills must be paid, their available income, and any extra items they would like to purchase.  They decide how to pay these expenses by setting a priority order.  Families will usually ensure they pay for the house, utilities, food and utilities before deciding whether additional items can be bought.  Businesses do much the same, prioritizing payroll, benefits, materials, and such before making new capital investments. 

Most marginally responsible families stop the spending at or before the money runs out.  Dire consequences result if they were to borrow enough money to pay for both necessities and desires every month.  Nearly every person with a grade school education is smart enough to understand this.  Not so with our current congressional representatives and president.  They ask for an open line of credit so their spending is not limited in any way.

During the recent debt ceiling crisis, Obama and his loyal minions made statements saying that if the debt ceiling was not raised, the United States would default on loans.  They also claimed they could not guarantee paychecks to soldiers or Social Security payments to seniors.  This was a contrived crisis.  Each month the United States takes in enough tax revenue to pay debt service, military payroll and Social Security checks with billions left over.  If the debt ceiling had not been raised and interest payments, paychecks or Social Security were not paid, it would be due to a conscious decision by the Obama administration to pay other bills instead.  In reality, there was zero likelihood of a U.S. credit default.  But using the Raum Emanuel tactic of never letting a crisis go to waste, one was created for the sole purpose of scaring Americans and denigrating the Tea Party.

Obama's behavior is analogous to a family borrowing to pay both necessities and desires, and being denied a new loan because of their irresponsible action.  They then threaten their family that they may not have a home next month because the bank would not loan more money.  The fault is not with the bank.  The problem is their spending habit.  The same is true with our government. 

Now take it a step farther by imagining the bank saying they would loan more money if the family would come up with a plan to live within their means.  The family opts instead to reduce the amount they will increase spending in the future but decides to make no real spending decreases.  Because of the poor spending habits and a refusal to commit to a plan that reforms the destructive behavior, the credit agencies lower this family's credit score.  Now, every dollar they owe will carry a higher interest rate.  Does this convince the family they have a problem?  It should, but instead they blame the credit agency and the bank.

Obama has given lip service to getting the national deficit under control.  Whenever presented with an idea to do so, he resists.  Congressional liberals have acted even worse.  Senator John Kerry called the credit downgrade issued by the S&P ratings service, "the Tea Party downgrade".  Many might believe him, however the downgrade was justified based on Obama and the democrats refusal to accept reduced spending (not a reduction in planned increases) and a balanced budget amendment.