Posted by
Steve on Wednesday, June 08, 2011 11:38:02 AM
As a country we are in a financial hole. The vote to raise
the debt ceiling is imminent. They want to raise the debt ceiling from $14.3
Trillion to $16.3 Trillion. China has been dumping our Treasury Bonds lately.
As a result, Treasury bonds are difficult to sell. The government is
considering raising the interest rate on the bonds to make them more
attractive. The problem with that is if you raise interest rates before the
economy is ready, you can destroy the economy. Whenever that situation has
happened, you end up with hyperinflation and total financial meltdown.
It was reported in the news yesterday that the Republicans
are considering a short-term default on some of the debt payments. That would
be devastating to our sales of Treasury Bonds. No government wants to be late
on a payment for a Treasury bond. To be late means you are in the process of a
financial meltdown. Or at least that is generally what it means.
On the debt ceiling, if we do not raise the debt ceiling we
have the money to pay the debt off and some essential government services but
not much else. The Democrats are saying that we would have a total financial meltdown
if we did not raise the debt ceiling. Their rationale is that we would continue
to spend at our current rate when we did not raise the debt ceiling. Of course
that would be a catastrophic situation. You cannot continue to spend at our
current rate and not raise the debt ceiling. If you do not raise the debt
ceiling, severe cuts would have to be made in the current year budget. In my
mind, that would be a good thing. We are spending way too much on government
right now. Cutting way back on government spending would be great. It would
remove a large portion of the government off of our backs.
I am no financial guru. My background is in science. If you
talk about biology, chemistry or even climate, I am your guy. If you talk about
history, I am an amateur historian. I specialize in American history between
about 1620 and 1880. My primary emphasis in history is the period leading up to
the Revolution and continuing through the end of the Revolutionary War. I have
very little financial training. So any comments I make are based on the
information I obtain from Talk Shows and News reports.
We need to get our financial house in order. When my family
has financial trouble, we cut back in the things we do. The essential things
are kept fully funded. The extra things are cut back or eliminated until the financial
situation turns around. The government should do the same thing. With Democrats
in charge, the non-essential things are kept fully funded and the essential
things get cut back. The Democrats also think that raising taxes brings in more
revenue. That is completely false. According to history, if you cut taxes you
bring in more revenue. That has been proven by both Republican and Democrat
Presidents. Today’s Democrats are more interested in “fairness” than they are
in total revenue. So, in the interest of “fairness” they believe that raising
taxes on the “evil” rich will be fair. The rich pay too much in taxes as it is.
Taxes should be something everyone pays, not just the “rich”.
I heard someone say that we should institute a policy
whereby someone that receives a handout from the government gives up their
right to vote. The reason behind that is that people that receive handouts and
vote will vote to continue to receive the handout regardless of what it does to
the country. Voting should only be for those people who really have a stake in
the country. Those people who have a stake in the country are those who really
pay taxes. The people that receive handouts would receive their vote back when
they start paying taxes. They just temporarily give it up to receive the
benefits. I like that idea.