This week, Moodys placed our country's AAA bond rating under review. We are now no longer weeks away from default, we are days. The threats are real, the consequences are great and the implications for our country's future financial health are frightening.
Over the past few weeks, we've seen divisiveness and political gamesmanship like we've never seen before. We've seen a new wing of the Republican party emerge with one goal and one goal only and that is to defeat President Obama in the upcoming election -- even if it means killing the jobs recovery and risking our country's financial stability.
I want to be very clear. If these Republicans do not join with President Obama to raise the debt ceiling, it will have a devastating effect on our state and every state across our country.
Public workers would be laid off, thousands of people would lose vital health services and every state would risk a downgrade to its bond rating -- a rating which helps us fund important public projects, like schools and roads, at a lower cost to taxpayers.
But there is a way forward, There's a way forward that doesn't involve a debt default or drastic cuts that hurt America's working families. There's a way to balance budgets, pay our bills and make investments that create and save jobs while moving us toward that better future that we all prefer. And I know this because this is what we -- and every other Democratic Governor -- are doing in our states every day.
Here's how we move forward. We must start by retiring the Bush-era tax cuts for millionaires and billionaires -- tax cuts that helped created the economic mess that we're in now and the deficit we're working to pay down. We must look for cost-savings from efficiencies in Medicaid and Medicare. We must make cuts where they make sense.
But the best way to retire the Bush deficit and get us out of this mess is by accelerating our nation's job recovery. And the best way to do that is with investments in education, innovation and infrastructure projects that rebuild and restore our communities while putting people back to work.
We need to come together as Americans. We must educate, innovate, rebuild and restore if we want America to survive and thrive. There are very real threats facing our nation, but there is also a way forward. We have the wherewithal, we just need the will.
Follow Gov. Martin O'Malley on Twitter: www.twitter.com/governoromalley
Peter M. Shane: What May a President Do if He Cannot Pay Our Bills?
You mention medicare and medicaid. Only changes in the system for everyone will help those programs, and help people stay out of serious debt or bankruptacy from using the current system. We have a lot of great elements of health care here in Maryland, the health care commission, a bunch of county innitiatives like healthy howard, medicare, medicaid, and all the rest. Isn't it time to eliminate the duplication of services and put all these things together as single payer for all. And save everyone money.
How easily the lie about "default" drops from the pig lips. There will be no
"default" unless the Piggies make it so in their desperate flailing about to save their borrow-spend-elect machine. Tea overboard.
If we eliminated the entire discretionary budget ( half of which is defense ) it would barely cover it. Of course we'd shut down all military operations, and shut down such useful things as air travel ( no air traffic controllers ).
If we completely eliminated medicare and medicaid. ( and kept paying medicare taxes ) it would only cover about half of the deficit. It would also lead to the collapse of much of the health care industry.
How about stop paying social security? ( ignoring that people will still be paying social security taxes ) We'll only close most of the nursing homes in the country and leave millions of the country's most vulnerable citizens financially ruined.
There isn't $1.3 Trillion dollars to cut without inflicting severe damage to this country. No magic pool of a trillion dollars of wastful spending we can cut. Even if the president gave paying our debt interest payments top priority ( and it's legally questionable whether he can choose one debt over the other ) we'd still face financial disaster from all the other cuts.
Are they? Or are they real only while we believe they are real? In the same way that money is real. You may or may not be aware of the techniques used to prod people, into buying things they don’t actually want or need. It is even possible to walk up to a large percentage of people in the street, and have them willingly hand over their possessions.
"there is a way forward"
Question the illusion. If its real it should withstand scrutiny, shouldn’t it?
"Here's how we move forward"
Hold the referendum, that no republic would ever permit. Do the people want GOTP, BTP,FTP or not?
Then Barack may have the majority mandate, to do what the ruling minority so desperately resist.
"We need to"
Challenge a "reality" that’s no more than rhetoric.
"we just need the will"
to bequeath back our birthright.
Just imagine the banks wanting higher interest rates on the money they borrow the US government and the individual states.
A lower rating for the US would also mean that other countries realise that the risks of lending money to the US becomes bigger. And apart from no longer wanting to finance the US deficit, they will also sell all their dollars. The dollar will go down, and fast.
This may seem good news since it will mean American products abroad become cheaper for people in China or Europe. But, if the fall of the dollar goes too quickly, the OPEC may decide to change the currency for oil from dollars to euro's (a move that has been suggested already in the past). This would mean that with a sliding dollar, the prices of oil in euro's will go up rapidly.
Since almost every commodity is in someway tied to oil, all commodities (natural gas, cotton, rubber, iron ore etc etc etc) will become more expensive for the US industry. Thereby increasing the costs of production but not increasing the revenues.
Less profits, companies will shut down, unemployment will go up, closed companies can not pay taxes to the government, unemployed people can not pay taxes to the government. As a result the revenue for the government (federal, state and local) will go down. The deficit goes up and the circle starts all over again.
If nothing else, we have to use the McConnel "punt" resolution to deal with the debt ceiling, and work with some combination of the Gang of Six/Simpson Bowles recommendations to deal with our future fiscal issues. It's not that hard unless it's confounded by certain Congressmen who behave more like religious zealots than workers in a democratic process. Democracy is the art of compromise - when you regard the act of compromise as if it was a violation of a sacred creed, you render democracy useless.
Not just us. If the Republicans do not join to raise the debt ceiling, it will have a devastating effect on the whole world. http://www.businessinsider.com/its-official-the-whole-world-thinks-republicans-are-dangerous-maniacs-2011-7
Question to the financially savvy: Should I pull my limited capital out of the markets before the end of the month? Why or why not?
Europe is barely holding itself above water with its constant bailouts. The PIIGS nations would definitely go under.
Japan's economy is already stressed given recent events. It wouldn't take much.
China's economy is an export driven bubble. Once the US, Europe and/or Japan go under. It will simply pop.
As for the rest of the world..... Let's see what happens when the price of food triples in countries where the majority of people already spend half their income on food. Wars will sprout up. Nations will collapse.
That enough doom and gloom?
It is as simple as that.
So let me get this right, you want to balance the budget by raising taxes and spending more. The House is simply asking that the federal government do what your tates law mandates you do. BALANCE YOUR BUDGET.