Desperate Dancing View 685 20110725

View 685 Monday, July 25, 2011

Niven is coming over to discuss fiction so this will be brief.

The Deficit Dance grows more frantic. Obama wants to scare everyone until they pressure the Republicans into giving Obama what he wants, which is to get past the Deficit Limit Kabuki and postpone the next crisis until 2013. And of course he insists on “revenue increases” as part of deficit reduction. The formula is new revenue now – either by “Closing loopholes” like deductions for state taxes and mortgage interest, or outright raises in taxes – while the budget “cuts” will be referred to committees or commissions or some other entity: there won’t be any cuts. The Bunny Inspectors and the NEA SWAT Team and the NASA SWAT Teams will continue. We won’t cut spending levels back to , say, 1998 or 2000 levels (where they were already far too high). We won’t eliminate programs and actions that may or may not be desirable for government to do in times of prosperity but are almost certainly not worth borrowing money to do. In fact, not much will happen except that there will be new Commissions which will require staffs of New Government Employees.

And if we don’t do that, then the Social Security checks won’t go out, and a lot of people will be ruined because they can’t make their mortgage payments. Obama is making it clear that he prefers Bunny Inspectors to paying the Army.

Actually the Social Security Trust Fund holds well over a trillion dollars in US Treasury bonds. The Social Security trustees are legally obligated to cash in those bonds to make Social Security payments. The Trust Fund has plenty of money, more than enough to make Social Security payments for years. The money is in the form of Treasury Bonds, but those are as good as cash. If Social Security needs to send checks, they cash in their bonds. When a bond is cashed in, the Debt is diminished by the amount of the bond: meaning that they can then sell another bond and not go over the debt limit. Social Security payments have no effect on the National Debt. You don’t have to raise the Debt Limit to pay Social Security.

And of course if the government were really worried about running out of money, it could stop spending so much. Every Bunny Inspector laid off is another Social Security check that can be written. And of course Obama is telling us that if we don’t keep borrowing and spending we won’t be able to “invest in education.” I presume that paying the Department of Education SWAT Team is a really good investment in education.

I really don’t like to ascribe malice to people, but when everyone in Washington acts as if they are ignorant of basic facts that they absolutely have to know, it becomes harder to understand.

The way to reduce deficits is to stop borrowing money to do things you don’t have to do. Every beginning writer and family understands the concept of “eating money.” You’d think at least a few of those in Congress would. Obama has probably never met anyone who had to pay his own bills. Even so, one can be pretty sure that they are aware of these things both on Capitol Hill and in the White House. We don’t hear them acting as if they did.

It sounds as if the best the Republicans hope for now is to raise the debt limit so that spending can continue until April. A Commission will go find some cuts to make, and it will get around to doing that Real Soon Now, after which both the House and Senate will have to agree with the cuts recommended: in other words, there will be rejoicing among the political consultants and lobbyists who will become rich, and many people in Congress will receive campaign donations, and some symbolic “cuts” will be made – the NASA SWAT Team to guard Canaveral might well be one of them since not much will be going on there now – and the spending will go on. We will continue to “invest” in bunny inspectors, enforcers of the Americans with Disabilities Act, regulators who harass business until they leave the country. The beat goes on.