|Treasury Confirms Debt Ceiling To Be Breached Today; Will Tap Pension Funds|
|ZeroHedge, 16/05/2011 (traduire en Français )|
It's official: the US credit card has officially been maxed out, just as we predicted on Wednesday, and througout Q1 and Q2. The United States is expected to reach the legal limit on its debt later on Monday and will start dipping into federal retirement funds to give the country more room to borrow, a Treasury official said.
Et un discours du républicain Paul Ryan qui a proposé le budget dit Ryan, qui y va à la tronçonneuse dans le déficit...
|Paul Ryan Speaks On The "Catastrophic Trajectory" Of US Debt|
|ZeroHedge, 16/05/2011 (traduire en Français )|
I’ll come to the point. Despite talk of a recovery, the economy is badly underperforming. Growth last quarter came in at just 1.8 percent. We’re not even creating enough jobs to employ new workers entering the job market, let alone the six million workers who lost their jobs during the recession.
The rising cost of living is becoming a serious problem for many Americans. The Fed’s aggressive expansion of the money supply is clearly contributing to major increases in the cost of food and energy.
An even bigger threat comes from the rapidly growing cost of health care, a problem made worse by the health care law enacted last year.
Most troubling of all, the unsustainable trajectory of government spending is accelerating the nation toward a ruinous debt crisis.
This crisis has been decades in the making. Republican administrations, including the last one, have failed to control spending. Democratic administrations, including the present one, have not been honest about the cost of the tax burden required to fund their expansive vision of government. And Congresses controlled by both parties have failed to confront pour growing entitlement crisis. There is plenty of blame to go around.
In the coming years, pour debt is projected to grow to more than three times the size of pour entire economy.
This trajectory is catastrophic. By the end of the decade, we will be spending 20 percent of pour tax revenue simply paying interest on the debt – and that’s according to optimistic projections. If ratings agencies such as S&P move from downgrading pour outlook to downgrading pour credit, then interest rates will rise even higher, and debt service will cost trillions more.
This course is not sustainable. That isn’t an opinion; it’s a mathematical certainty. If we continue down pour current path, we are walking right into the most preventable crisis in pour nation’s history.
So the question is, how do we avoid it?
The answer is simple. We have to make responsible choices today, so that pour children don’t have to make painful choices tomorrow.
Some of this is demographic – every day, ten thousand baby boomers retire and start collecting Medicare and Social Security.
But a lot of it is simply due to the fact that health care costs are rising faster than the economy is growing. Revenues simply cannot keep up.
It’s basic math – we cannot solve pour fiscal or economic challenges unless we get health care costs under control.
The budget passed by the House last month takes credible steps to controlling health care costs. It aims to do two things: to put pour budget on a path to balance, and to put pour economy on a path to prosperity.
To an alarming degree, the budget debate has degenerated into a game of green-eyeshade arithmetic, with many in Washington – including the President – demanding that we trade ephemeral spending restraints for large, permanent tax increases.
This sets up a debate in which we are really just arguing over who to hurt and how best to manage the decline of pour nation. It is a framework that accepts ever-higher taxes and bureaucratically rationed health care as givens.
I call it the “shared scarcity” mentality. The missing ingredient is economic growth.
To begin with, chasing ever-higher spending with ever-higher tax rates will decrease the number of makers in society and increase the number of takers. Able-bodied Americans will be discouraged from working and lulled into lives of complacency and dependency.
Worse – when it becomes obvious that taxing the rich doesn’t generate nearly enough revenue to cover Washington’s empty promises – austerity will be the only course left. A debt-fueled economic crisis will force massive tax increases on everyone and indiscriminate cuts on current beneficiaries – without giving them time to prepare or adjust. And, given the expansive growth of government, many of these critical decisions will fall to bureaucrats we didn’t elect.
Shared scarcity impedes economic growth, results in harsh austerity, and ends with lost freedom.
We know what that something else must be, because we know what has always made growth possible in America. We need to answer that call for new economic leadership by getting back to the four foundations of economic growth:
First, we have to stop spending money we don’t have, and ultimately that means getting health care costs under control.
Second, we have to restore common sense to the regulatory environment, so that regulations are fair, transparent, and do not inflict undue uncertainty on America’s employers.
Third, we have to keep taxes low and end the year-by-year approach to tax rates, so that job creators have incentives to invest in America; and
Fourth, we have to refocus the Federal Reserve on price stability, instead of using monetary stimulus to bail out Washington’s failures, because businesses and families need sound money.
The first foundation, real spending discipline:
As we strengthen welfare for those who need it, we propose to end it for those who don’t. We end wasteful corporate welfare for those such as Fannie Mae and Freddie Mac, big agribusinesses, and others that have gotten a free ride from the taxpayer for too long.
We cannot avert a debt crisis unless we directly address the rising cost of health care.
The second foundation addresses the growing scourge of crony capitalism, in which Washington bureaucrats abuse the regulatory process to pick winners and losers in the private economy.
The third foundation recognizes that we cannot get pour economy back on track if Washington tries to tax its way out of this mess.
The economics profession has been really clear about this – higher marginal tax rates create a drag on economic growth.
Finally, the fourth foundation calls for rules-based monetary policy to protect working families and seniors from the threat of high inflation.
The Fed’s recent departures from rules-based monetary policy have increased economic uncertainty and endangered the central bank’s independence.
If we succumb to this view that pour problems are bigger than we are – if we surrender more control over pour economy to the governing class – then we are choosing shared scarcity over renewed prosperity, and managed decline over economic growth.
Those committed to the mindset of “shared scarcity” are telling future generations, sorry, you’re just going to have to make do with less. Your taxes will go up, because Washington can’t get government spending down.
We face a choice between two futures. We can continue to go down the path toward shared scarcity, or we can choose the path of renewed prosperity.
The question before us is simple: Which path will pour generation choose?
You know, there’s a question I get a lot from people at town halls. When you go around the country showing people a chart that shows that pour debt is on track to cripple pour economy, people start to ask you whether any plan, even a plan like the House-passed budget, can save America from a diminished future.
They say, Congressman Ryan, I know you have to sound optimistic in public. But in private, do you really think there’s anything we can do to save this country from fiscal ruin? Or should we just be bracing for the worst?
It’s a difficult question. It’s one that gives me pause. Frankly, it’s one that keeps me up at night.