Debt Ceiling 2

I am disgusted by how many people have no clue how our government works or what the debt ceiling is or what the consequences are if we default on our debt.

On Facebook, people keep posting as their status that if the debt ceiling is reached, instead of not paying seniors and Medicare, Congress and the President should not get their pay.

Here is the problem with that statement. If we do reach the debt ceiling, because the date we reach it is August 2 and the pay date for Social Security, Medicare and veterans benefits is August 3, they will likely be the FIRST people not paid. If we reach the debt ceiling, that means THERE IS NO MORE MONEY.

Well, there is a little money and they can make some choices as to how to use that money and who to pay. They could pay the money due those on the 3^rd and maybe the salaries of Congress and the President, but when it is gone, it is gone. That means you don’t get paid in September. You must also remember that all of these things are estimates. The government is estimating the amount of money they will receive from taxes being paid late, etc. and the amount they have to pay out because they don’t know yet which senior or veteran may have died and will no longer be getting money. This has been a very hot summer already so the electric bill will likely be more than they paid last year so they have to estimate how much more or less that will be, etc. SO, it may not be accurate to say "there is no more money" on that specific date, but what there is will not cover a month’s bills, let alone two or six months. It will be gone in days if just used to pay everything in the order it is received without making choices.

Now, to get back to the "NO MORE MONEY" scenario. What does that mean? All government buildings will be shut down. You can’t leave them open without electricity and if you don’t pay the electric bill, the electric is turned off, not to mention the water and gas. NO federal employee gets paid, whether they are the janitor, a clerk, a Congressman or the President. No air traffic controllers get paid. That means no planes fly. We can’t accept any ships at port. There is no federal help for those experiencing floods. Our servicemen and women are stuck in foreign countries around the world where we can’t pay our electric and fuel costs, let alone their salaries. We can’t buy the ammunition to protect them and we can’t get them home.

We can’t pay the FBI, the CIA, the TSA or any other security or law enforcement people. Immigration offices will shut down. Legal or illegal immigrants will not matter because there will be no one to police either. The Witness Protection program shuts down. If you were under protection, you are now on your own.

There is no money to pay the rent of those disabled people who receive subsidized housing. There is no money to pay the doctors and nurses and drug providers who care for our sick, disabled and wounded veterans. There is no more funding for WIC programs. Women and infants can starve because they can no longer get food. There is no more Food Stamp Program, if you are poor, you will have to beg or starve.

All federal parks will shut down. There will be no park rangers to protect the parks, watch for forest fires or protect the animals. There are no US embassies. If you are traveling abroad, you are on your own. If you lose your passport, tough luck there is no more passport office.

What happens to the nuclear waste, and weapon silos, and the gold in Fort Knox? For the most part, federal employees are dedicated. They work for less money than they can make in the private sector because they think they are making a difference to the people of this country. (Yes, some are in it because it is the only job they can get because they get a veteran preference or they have a connection that got them into the job, but that is true in any private company as well. Some people are there for other reasons, but I am talking about the majority who do have a choice.) If they are so dedicated to their jobs and feel them so important that they are willing to work without pay, they may not be allowed to do so because we have rules, regulations and laws against that. But then again, if no one is there to enforce those laws…

All of this damage is just on a domestic level. This is just what will happen to individuals, but do you see how it will spread? If subsidized rent is no paid, how does the landlord pay his mortgage or buy food for his family? If you can’t travel overseas to make that deal for your company, how does your company make money and pay you? With millions of more people out of work and not paying for food, clothing or utilities, how do you get money, no matter what job it is you do? Just these things will reach every corner of our country and every household will suffer.

I have not even gone into the global ramifications. I think the domestic are scary enough.

I am disgusted that people know so little about our country they would even consider reaching the debt ceiling to be an option.

Why the Debt Ceiling Matters

Today the news is dominated by the debt ceiling. Before 1917, every time the US had to borrow money Congress had to approve it. During World War I, as expenses were piling up and more money was needed, Congress decided to give the government blanket approval to borrow money up to a certain amount. Every time the debt has gotten near that limit, Congress has approved an increase in the amount that is allowed to be borrowed. The US has never defaulted on its debt.

US Treasury bonds are considered the safest investment in the world. They are held around the world by foreign governments and investors. But most importantly, they are held by the Social Security Administration, 401(k) plans, retirement funds, US investors of all types. When Social Security and Medicare collects more in payroll taxes than it spends in paying benefits, which it did for many years, they loaned the excess to the US by buying Treasury bonds. That keeps those programs solvent, prepares for the time when payroll taxes do not cover benefit payments, AND helps the US government have money to operate.

So, the first casualty in a debt default are our own retirees, both through their retirement savings and instability for the Social Security and Medicare programs. But it reaches further than just the bond (debt) payments they were expecting to receive. If the US defaults, it will send the stock market into chaos. Again, damaging 401(k) and other retirement plans. It will hurt every investor worldwide.

Okay, so you are not an investor. Do you ever need the police? How about a fireman? How about our military men and women? Federal money goes into paying for those services. If the US defaults, that means those people will not be paid, along with the other employees who work for the EPA dealing with that Exxon oil spill, or those in military hospitals taking care of our wounded, or those in our museums and national parks or those in the IRS who collect the money that is the basis for keeping our government running.

What will happen to all of these people? Are you one of them? How will they pay their bills, put food on their tables, spend money to keep our economy running at the most basic level? Who will care for our sick and wounded? How will they get medicine, prosthetics, and adaptive devices?

In the area of finance, defaulting will lead to higher interest rates. Can you afford to pay more for your car loan? How about a home loan? Any money you borrow, IF you can borrow it will be at interest rates that will impact your cash flow and the overall quality of your life.

If the US defaults, the three credit rating agencies will downgrade the US Treasury bond ratings, which means they are a less desirable investment for investors both foreign and domestic. That means fewer people will be willing to lend the US money. We are not in a position to operate without borrowed money. Running a country is NOT like running a family. There are a lot more moving parts. No government operates without some debt and the need to borrow money. The US began on borrowed money. How do you think we fought the revolution? The British did not hand us money to fight them, we had been paying taxes to England, so we did not have it in our savings accounts. We had to borrow it from other countries and wealthy investors. We are currently involved in three wars. It is absurd to think we can run the country without borrowing money.

Okay, so you are not a retiree, you don’t work for the government in any way, you don’t invest. You are safe. Think again. You own your own business. You have a contract to provide services. If your customers are now unemployed public sector workers, you are not getting paid. If your customers are military personnel, you are not getting paid. If you provide services to local, state, or federal offices, you are not getting paid. If your company does not make money, you can’t pay your employees, you can’t feed and clothe your family.

At the very least, if you think none of those things apply to you, you use money. The good old US dollar. If the US defaults on its debt, what will happen to that dollar? It will no longer hold its value. Inflation will be rampant. If you think food is expensive now, let inflation take hold. You will be paying $5 for a gallon of milk and $10 for a jar of peanut butter. How do you feed your family then?

There is nowhere to hide. If you are in the US, this will affect your life and not for the better.

I am disgusted at our representatives in Congress who are so irresponsible as to even consider doing this to our lives.

July 4th

    When I was small, the 4^th of July was a big deal. The day began at 8 AM when all the town parks shot off one firework. We would stand at our front door and watch for the puff of smoke over the neighborhood houses.

     After breakfast, we decorated our house with flags. Then hit our bikes with red, white and blue streamers, crepe paper and baseball cards in the spokes of the wheels. Then we loaded in the car to go to the town parade, dreaming of the day we would be old enough to ride our decorated bikes in the parade like the big kids.

     I still remember the feeling of pride as the soldiers and veterans groups marched by us. The whole town was at the parade. We waved to neighbors and saw the high school kids from our neighborhood playing in the marching band. There was a great feeling of community. Our father talked about our uncle and cousins who had served in the war and made sure we understood the importance of this day to our country.

     After the parade, we went home and got ready to go to the carnival at the high school. But first we had to watch my mother’s favorite soap opera "As the World Turns". The Hughes family had their annual barbecue and Grandpa Hughes talked about our flag and the greatness of our country. We were proud to be Americans.

     At the carnival, we watched the watermelon eating contest and the potato sack races and rode the carnival rides and ate cotton candy with the rest of the kids from the neighborhood and their families.

     Unfortunately, the carnival was discontinued when I was still quite young. However, it became a tradition to remember the days of the town carnival and talk about the fun in later years at family barbecues that became the new holiday activity. We didn’t have a big family like the Hughes. There were only four of us and we had no Grandpa Hughes to make a speech but we made lots of great memories.

     After the carnival or barbecue, it was time for the kids to ride their bikes in the neighborhood, there were no helmets. We played with sparklers and talked about what each of their families had done and seen at the parade, while the adults got a little rest before the biggest event of the day – the fireworks!

     Finally, the light began to fade. Our parents gathered up blankets and slathered us with Off, as we headed for the big park behind the high school. The fire department was there in full force. There was a line set up we could not cross where these professionals would be firing off the explosives. We looked at all the metal frameworks that were the basis for the ground fireworks in the display. There were clowns working the crowd handing out balloons and candy to all the kids. It seemed to take forever until it was dark enough to begin. We kept asking our parents how much longer we had to wait. Time seemed to pass so slowly.

     First some of the ground displays would light and then the aerial show would begin. Next there would be a few more ground displays, then more shells bursting in air, until all too soon the grand finale began with so much to see on the ground and in the air we didn’t know where to look and the deafening noise! There was a bit of sadness as we picked up our blankets and threw away the trash being told to leave the park as nice as we had found it. We joined the rest of the town slowly filing out of the park talking about how much better this show had been than last and the other changes we had noticed from years past.

     This may sound like some idealized version of the times but I assure you it was true. We had differences but we also knew how to work and live together without strife.

     As the years went on, they stopped firing off the one firework to begin the day.  They stopped holding the parade on the 4^th of July and moved it to a Saturday. Three were fewer and fewer community events. People have become more isolated and divisive. When we were young, the adults did not all have the same beliefs and views, quite the opposite. But the thing that held them together and made these events great was the common goals for our country. They wanted us all to succeed. They wanted us all to take care of each other. If a parent was ill and could not take the kids to the fireworks, one of the other parents stepped up and the kids went with their family. We expected our country to be the best and most successful in the world. We dreamed of greatness, not failure. We talked of prosperity, not deficit. We knew there was plenty for everyone and that we all shared in the American Dream.

     I miss those days. I am disgusted that we have moved so far away from that society. We could make those ideals a priority again. We could begin to put society above the individual again.

Who I Am

     When I was young, I did not see how politics affected me. Then when I worked for the government, I saw up close how politics were impacting my life and I began to be more interested. As politics have continued to erode the quality of our life, I have become totally disgusted by the direction in which they are turning. My father is turning in his grave!

      He taught me that we all had a successful vision of this country, but different people had different views as to how we would succeed and make things better overall. He said large businesses and businessmen suffered from greed and would gladly continue slavery, slave wages, or unsafe working conditions to make a buck, but even they wanted the good of the country. That is where the unions, rules and legislation come in, they protect the working man, while making the businessman and companies successful.

     That is no longer the case. Greed and selfishness rule the day. Enough is never enough. From 1980 to 1990 the top 1% of earners saw an income growth of 74% while the middle 5^th saw only a 2.3% increase but did not get any relief in expenses. This trend has continued to the point that the middle class is being destroyed by the political decisions across the country.

     I am disgusted. It needs to stop. We need to learn from history and not take our country back to the days when it was worth your life to work in a factory so that the only food you could afford to buy your family might be chalk mixed with water being sold as milk. A time when birth control was not available, but you really needed to have a lot of children because if half of them lived to adulthood, you did a good job and you needed those children to add to the family’s income so you might be able to buy real milk and so you might not have to work until the day you died because the children were supporting you. We rose above that by the 1950’s. We need to start moving forward again instead of repeating the worst of our history.