Brian Wesbury and Bob Stein of First Trust Advisors raise an interesting conjecture (bold is mine):
Back during the budget showdown of 1995, when President Clinton faced off against the new Republican Congress, then-Treasury Secretary Robert Rubin repeatedly warned that the rating agencies could put the US on review for failing to increase the debt limit. The political angle was that a review would jack up interest rates, leading the Republicans to capitulate on trying to reduce government spending. The markets, however, scoffed at Rubin, and interest rates fell during the budget “crisis.”
This time around, we wonder whether in the next couple of years President Obama will declare a fiscal emergency that only a tax hike can solve, using the threat of a rating downgrade as a way to put political pressure on his opponents. If so, we need only look at the UK, where the threat of a downgrade comes despite large tax increases already built into their budget.
Spend, spend, spend…Solvency will soon become America’s # 1 issue placing us in the world’s bankruptcy court for restructuring, just like GM and Chrysler. Who could have ever imagined such a thing like the top two auto makers going bankrupt? But America has the “gimmees,” the “I wannits,” and the “poor mees” real bad lately. And our leaders keep handing the kiddies the cookie jar. We just cannot continue to keep spending like this on credit while unemployment is eating away at the revenues coming in folks! We must demand a ballanced, carefull, pay-as-you-go approach to solving our nation’s problems. And we have to let the people who will not act responcibly fail, so that they can pick themselves up by their bootstraps and learn from their mistakes. We must not feel sorry for adults who will not grow up!
Or they will never grow up!
Who is going to pay for all this magnimity?
The backsides of the stupid drowns who still go to work everyday while the users take advantage of their labor… That’s who! We conervative, hard-working folks are being outnumbered by the users who have no problems feeling entitled because they were raised on other people’s money, the “Do it for me Mommy” mentality and MTV.
Sickening! Just sickening! America is no longer the land where the industrious, independant, responcible people are rewarded for their efforts. No, Robin Hood is robbing the “rich” responcible people to reward the “poor me” folks who will not act responcibly.
My question is…how much leaway does our leadership think there is between our current net earnings weekly and the actual cost of living we tax payers face? That difference is the headroom there exists between the taxpayer being able to stay solvent themselves and the possible increase in taxes our leaders can tax us further to pay for all this warm-fuzziness. For most of us the cost of living runs pretty close to our net income… So where is there room for all our taxes to increase to pay for all this philanthropy going to come from?