By Charles Biderman
The idiocy in Washington on both sides is almost too tough to watch. First off, there is no government shutdown. Yes, about 500,000 government workers are on furlough and not getting paid right now. But over 20 million direct and indirect government workers are still on the job and getting paid! So how can a 2.5 percent, yes 2.5 percent, temporary reduction in workforce be called a shutdown?
This is nothing more then The Big Lie that George Orwell first popularized as to how big government manipulates the sleeping populace. A 2.5 percent cut in the workforce is really nothing. Would any business entity forced to layoff 2.5 percent of its workforce say that has shut them down? Of course not. But what this government has done as part of the Big Lie is to shut the non-essential public interface such as museums, national parks, and even internet sites – stuff that costs very little.
Then there is the total bullshit that not lifting the debt ceiling will create a US government default. How many of you know that the US government collects around $220 billion a month in taxes? And interest payments on publicly held government debt is around $30 billion a month? $220 billion in monthly tax collections is more then enough money to pay $30 billion in interest payments.
That’s not a default. That’s just more of the big lie. To make this more understandable, let’s eliminate six digits from the prior numbers and imagine that you or I make $220,000 a month and have monthly interest payments of $30,000 a month. Would we in default? Of course not, we would have more then enough money to pay the interest on our debt.
But lets take the analogy of comparing the government with you or me one step further, and imagine that you or I had made commitments to pay others $300,000 a month. Yes, that is more than our $220,000 a month income, and our lenders are saying they won’t lend us any more money. That is not a default. That is a problem of overspending. How would or I you solve the problem of making $220,000 a month and spending $300,000 a month? Simple, you or I would have to cut back on spending and life would go on.
But wait, what is most of our spending is wasteful and ineffective at providing services? A cap on borrowing would be a great way to eliminate waste and financial fraud both by government workers and the recipients of government largesse.
The next Big Lie to refute is that the US economy is rebounding thanks to Mr. Obama. What total, total bullshit! To truth is there is no rebound. In fact the economic growth is down year over year. Our analysis of daily withheld income and employment taxes says wage and salary growth before inflation has dropped to 2 to 3 percent this year from 3 to 4 percent in 2012. That’s a roughly 1 percent drop in growth. Why? Simple reason, starting in January income and employment taxes have been raised by about 1 percent. So in 2012 jobs grew by about 160,000 a monthly and this year jobs are growing by about 110,000 a month. That is a decline, not growth. Growth is going the wrong way.
Oh, yes $20 billion a higher taxes with very little growth in spending the government has reduced the deficit a bit. But Obama’s big lie says a rebounding economy is reducing the deficit. No, the deficit down only because of higher taxes and that is a one time event. Unless of course the government keeps raising taxes. Which apparently is exactly what Obama wants to do even though higher obviously has to reduce income growth and job creation.
We, our children and the rest of the world will be much better off telling the truth about what is so right now, rather then playing The Big Lie game to justify the ever strangulating growth of the US government.
Tags: Biderman default Economics Economy government shutdown Government Spending Jobs Stock Market