Rosalea Barker: Pardon my Neagtive Outlook
Pardon my negative outlook
August 7, 2011
Raising the debt ceiling may turn out to be just a tiny skirmish in the scheme of things. Next up is the 2012 Budget itself. But before I get to that, how about some light relief?
::International Beers Day, 2011::
Am I alone in noticing the coincidence of Friday, August 5 being International Beer Day, and the name of the Standard & Poor’s analyst who is appearing in most of the coverage of S&P’s August 5 downgrade of the US credit rating—David Beers? (The audio is eerily apt given the way Mr Beers is being portrayed in the media.)
::Time to dust off the War Bonds?::
Who knew they had iPads during World War Two? Even more interesting than the slate’s illustration of the rush to buy nylons are the “Seven things you should do”. Created by the American Advertising Council (which was renamed the War Advertising Council for the duration of the war), this ad was placed in magazines as a public service announcement to try and curb any trend towards inflation. Interesting that they shifted the responsibility for, and guilt about, inflation onto individuals by telling them not to increase their income, whether it be from wages or the sale of goods and services they provided.
I’m a big fan of 1 and 3 at any time, but the prevailing wisdom these days—as seen on TV—seems to be the opposite: that individuals should just keep buying and living off credit to get the economy working again. As for number 4—Support higher taxes…pay them willingly—I have to wonder how that would fly if World War III were declared tomorrow.
Then again, if you’re inclined to believe that the “War on Terror” IS WWIII, then why isn’t it being paid for with War Bonds? I mean, let’s get real here. Just let the DoD issue bonds to raise the money to pay for its endless wars and take that huge drag on the economy off our fiscal plate altogether. Of course, the biggest buyers of the bonds would probably be companies like Northrop Grumman and Boeing and all the other companies making a killing of the machinery of war, and that would just enrich them even further.
Nonetheless, Mr Beers and confreres would no doubt give US War Bonds a quadruple A rating. Plus, the net effect on the US debt outlook would more than satisfy S&P’s demands that the nation reduce its deficit.
::More pouty-mouth to come::
Now for the serious stuff. The US budget process contains many moving parts, all of which are just crying out for a spanner to be thrown in them. Here is a link to the timeline for the process. What the timeline doesn’t show is that the Budget the President presents to Congress is voted on as 12 separate Appropriation Bills. All of the votes should have taken place by now, leaving September for the House-Senate conference committees to resolve any differences and enact those spending bills, and for the President to sign them before the new fiscal year starts in October.
Here is a link to the status of those Appropriation Bills (a table on the Library of Congress’s website). At this date, a vote has been held in the House on only six of them, and on only one in the Senate. More significantly, three of the House bills still don’t have a committee report, let alone a committee vote and then a House vote, and 11 of the Senate bills are similarly not yet out of committee.
All of which raises the spectre of a US government shutdown like the one that happened in November 1995, when a Republican-dominated House and Senate proposed a stopgap spending bill and President Clinton vetoed it. Funding for government offices ran out and about 800,000 federal workers were ordered home.
(In the end, then-House Speaker Newt Gingrich came out as the bad guy when he confided to reporters that he was just getting back at Clinton because he’d been told to exit the rear door of Air Force One on a trip the President and Congressional leaders made to Israel to attend the funeral of Yitzak Rabin, who was assassinated on November 4 that year.)
What will happen this year if the 2012 appropriation bills don’t get passed, or even reported to the floor of the Senate and House? It will be a never-ending series of pouty-mouthed arguments over stopgap spending bills to temporarily fund the twelve areas the Budget is split into.
A veritable field of dreams for political grandstanders!