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Obama declares we are not a deadbeat nation – really?

The Associated Press in today’s Rockford Register Star article, “Obama: Fight imperils elderly’s checks,” continues the media’s misrepresentation of the facts concerning default on Social Security, unless Congress raises the debt ceiling or the legal borrowing limit.

Excerpt:

Declaring “we are not a deadbeat nation,” President Obama warned on Monday that Social Security checks and veterans’ benefits will be delayed if congressional Republicans fail to increase the government’s borrowing authority in a looming showdown over the nation’s debt and spending.

Remember, President Obama and his administration determines the priority of the bills that get paid, not the Congressional Republicans. If you don’t get your Social Security check or your veterans benefits, blame the Obama administration.

However, also interesting was the president’s comment, “we are not a deadbeat nation.” He also says that “congress needs to raise the debt ceiling to allow the government to pay bills already approved by Congress.” Obama omitted, “and signed by the president.”

However, a nation that borrows more than 40% of its annual budget to pay its bills, is not a deadbeat nation? The president, elected by a majority of the voters, wants an unlimited credit card without reducing spending or the $16.4T debt, is not a deadbeat nation?

A country that does not realize the consequences of competing with its own corporations for capital, reducing growth, and increasing unemployment, is not a deadbeat nation? Or almost 50% of Americans not paying income taxes, with a record number of welfare recipients, is not a deadbeat nation?

The U.S. is quickly becoming a nation of deadbeats, led by the entitlement attitude of the current administration and our current entitled generation. Think deadbeat!

Excerpt:

Far from paying our bills, the current generation of Americans — or some of them — have set records for default which probably have no parallel in the history of the human race. During the last five years, U.S. individuals have walked away from a staggering $585 billion in mortgages, credit card debts and other personal loans. That works out at about $6,000 per household.

Today, we say, “I’m not going to pay that mortgage I signed because the house is worth less than I owe on it.” When the market improves, how many of our deadbeat generation will say, “I’m going to request the mortgage be increased to the higher assessed value?”

Even though personal credit debt appears to have declined by 7% in the last few years, it really is somewhat of a mirage.

Excerpt:

Furthermore, as our chart shows, the majority of that reduction hasn’t come from people paying off their loans, but from banks writing them off.

The total debt reduction from the peak, says the Fed, is $954 billion. Loan write-offs, at $585 billion, account for 60% of that. In other words, for all the chest-thumping about how Americans are repairing their balance sheets and how we aren’t a nation of deadbeats, in the last five years Americans have walked away from $3 in debt for every $2 they’ve paid off.

Households weren’t alone. Corporations have defaulted on $35 billion to $40 billion in debt per year in recent years, according to Moody’s, despite the massive corporate bailouts by the federal government using taxpayer’s dollars.

Sounds like a big increase of deadbeats in our nation to me.

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27 Comments

  1. Hey Ted,

    If you insist on making this issue partisan and attacking Obama, here you go:

    “Republican states, on average, received $1.46 in federal spending for every tax dollar paid; Democratic states, on average, received $1.16.”

    Oopsie. Looks like the Republicans are not so perfect after all. Some moight even say they are 25.9% worse!

  2. So yeah, the states most upset with the federal government are the most dependent on it. Who are the deadbeats now exactly?

  3. America is more “deadbeat” than 4 years ago, nobody can argue that.
    More whites, by shear number, are on public aid because there are a lot more white poeple.
    More blacks are on public aid, percentage-wise, than whites. State boundaries are irrelevent, just a broad way to catagorize people. Within every state the stats vary dramatically.
    People on “disability” are way up, with a lot of them shifted from long-term unemployment to make the unemployment numbers look better. Or else we have a health epidemic that just started a couple years ago.

  4. Confucious say: “Fill bird feeder at night, next morning bird lined up around block”

  5. Our current “entitled generation?” What generation would that be, Ted? You and the Baby Boomers who drove us into the ground with a military industrial complex that led to two wars under your boy, GWB, that President Obama is now forced to pay for? That generation? Or the generation that refuses to have anything to do with cost of living reductions or means testing for SS or Medicare? Oh, that’s right, same generation. Yours.

    • Ted Biondo

      Monkey, feeling guilty about your generation’s lack of planning expecting someone else to do it for you, obviously you are not a Baby Boomer, and I am also too old to be part of the Boomers.

      As far as “means testing” Social Security, it’s just another liberal “means” of wealth redistribution, where the people who save and sacrifice to have something set aside for their old age, and not be a burden on society, are penalized by those who do not.

      Most people, who paid the maximum amount to Social Security, a misnomer if there ever was one, along with their employer’s contributions for over 4 decades, would have amassed up to ten times more through their own investments, and it would be in their estates, not the government’s pot.

      Oh, I forgot the government taxes you even after your death – no reason to leave that money in your family! Plus, the money would actually exist, instead of being already spent by our government, with nothing but IOUs somewhere in West Virginia – another great government program – thanks for reminding me.

  6. Here in Illinois, we have living proof:

    http://www.myfoxchicago.com/story/20601722/1-in-3-illinoisans-lives-in-or-near-poverty-level-report

    CJR1,

    How much of that money being dispersed is in the form of Medicare and Social Security which is a payback to seniors for their decades of participation in the government run ponzi scheme? Subtract those numbers and get back to us. Also, please provide a lost of what is considered a Republican State and a Democratic State?

  7. Adam Faber

    Ted, this post is preposterous. First, consider how dictionaries actually define the word deadbeat:

    Merriam-Webster: one who persistently fails to pay personal debts or expenses.

    Dictionary.com: a person who deliberately avoids paying debts.

    Next, look at President Obama’s statement in context:

    “Well, Chuck, the issue here is whether or not America pays its bills. We are not a deadbeat nation. And so there’s a very simple solution to this. Congress authorizes us to pay our bills…. And — and I just want to repeat, because I think sometimes the American people understandably aren’t following all — all the debates here in Washington, raising the debt ceiling does not authorize us to spend more. All it does is say that America will pay its bills. And we are not a deadbeat nation. And the consequences of us not paying our bills, as I outlined in my opening statement, would be disastrous.” (http://www.nytimes.com/2013/01/14/us/politics/full-transcript-of-president-obamas-press-conference.html?pagewanted=all&_r=0)

    You said: “However, a nation that borrows more than 40% of its annual budget to pay its bills, is not a deadbeat nation?”

    That’s correct, so long as the nation pays its bills one way or another. Refer to the above definitions of deadbeat that are straight from dictionaries.

    You further said: “The president, elected by a majority of the voters, wants an unlimited credit card without reducing spending or the $16.4T debt, is not a deadbeat nation?”

    By definition, so long as the nation pays its bills, it is not a deadbeat nation. In fact, your headline was “Obama declares we are not a deadbeat nation – really?” Obama was correct: while the federal government has come close, it has not yet defaulted. Therefore, like it or not, Obama was correct.

    “A country that does not realize the consequences of competing with its own corporations for capital, reducing growth, and increasing unemployment, is not a deadbeat nation?”

    So long as the nation pays its bills, it is not a deadbeat nation. See a pattern developing here?

    You continued by citing a Marketwatch.com article that claimed that “President Obama said on Monday that ‘we are not a nation of deadbeats,’ but instead a people who ‘pay our bills.’” Refer to the transcript I cited above: Obama never said those words. Indeed, the two times he used the word “deadbeat” are included in my citation above and it referred only to the federal government and not its citizens. Only a foolish reader would conflate the words “we are not a deadbeat nation” with “we are not a nation of deadbeats”. But, let’s continue down that path to expose the problems with that line of argument.

    “[A]lmost 50% of Americans not paying income taxes, with a record number of welfare recipients, is not a deadbeat nation?”

    Not according to the definition of “deadbeat”. Nothing about a lack of income tax liability precludes those individuals from paying their bills. Included among the posited 50% of Americans who don’t pay income tax are those who have saved their income for retirement and are now using their savings to pay their bills. Individuals who receive unemployment compensation use that money to pay their bills and are thus not necessarily deadbeats.

    “When the market improves, how many of our deadbeat generation will say, ‘I’m going to request the mortgage be increased to the higher assessed value?’”

    Again, homeowners who refinance their house are not inherently deadbeats so long as they pay their bills. Indeed, lenders would be hesitant to refinance if the homeowners showed a history of not paying their bills.

    “Sounds like a big increase of deadbeats in our nation to me.”

    But you don’t employ logic or actual facts or quotations, so anything sounds possible to you.

    You could have used your platform to discuss the importance of reducing government spending but instead you chose to try to alter the definition of the word “deadbeat”, misquote the President and inaccurately label blocs of citizens as deadbeats. What was the point, Ted?

  8. Adam Faber

    Terry, OASDI is not a “government run [P]onzi scheme” as you incorrectly aver. Indeed, Wikipedia teaches us this:

    “One criticism of the analogy is that while Ponzi schemes and Social Security have similar structures (in particular, a sustainability problem when the number of new people paying in is declining), they have different transparencies. In the case of a Ponzi scheme, the fact that there is no return-generating mechanism other than contributions from new entrants is obscured whereas Social Security payouts have always been openly underwritten by incoming tax revenue and the interest on the Treasury bonds held by or for the Social Security system. The sudden loss of confidence resulting in a collapse of a conventional Ponzi scheme when the scheme’s true nature is revealed is unlikely to occur in the case of the Social Security system. Private sector Ponzi schemes are also vulnerable to collapse because they cannot compel new entrants, whereas participation in the Social Security program is a condition for joining the U.S. labor force.”

    Actual knowledge is a powerful weapon that you may want to consider adding to your arsenal if you want to be taken seriously.

  9. Ted, there’s this little thing called “divide and conquer”. As a liberal Democrat, I’m writing to convey my sincerest gratitude to you. By ceaselessly focusing on political-capital-burning fiascos that a) serve no long-term purpose, and b) make zero headway in the advancement of any conservative principles, I think I speak for a great deal many on my side of the aisle in expressing exasperated glee watching you do exactly what my party wants you to do each and every single day until November 4th, 2014. Nancy Pelosi couldn’t engineer a better way for the right wing of the House GOP to self-immolate and tip the balance of power in the House to the Democrats. I tip my hat to you, sir!

    • Ted Biondo

      You are welcome Jake. However, the capital burning is well deserved and is strengthening our side of the aisle to continue to fight those of you who believe that one size fits all government, setting the standards at the lowest common denominator and stealing the earnings of these who work – to pay for those who live off the rest of society will make our society fair – America will simply become the lastest European country or Greece. You are Welcome to your president’s, the Senate and Pelosi’s lack of vision.

  10. Ted,

    First of all, he’s our president, not merely mine. I think your side should take note of this more often than you probably feel comfortable doing because it’s true.

    Secondly, everything else you said is irrelevant. Why? Because your side is going to lose this fight. The debt ceiling has absolutely nothing to do with anyone’s earnings, the distribution of income, or any number of European countries. All the debt ceiling pertains to is financing the spending Congress has already appropriated.

    You are essentially articulating in favor of turning the federal government into a deadbeat. What I am arguing, is that Democrats welcome the opportunity to watch your side articulate as often and as clearly as possible that we should not finance the spending we already incurred. What’s lost in this, as I have already stated, is that the debt ceiling will be raised, it will be raised without anything attached to it, and you will lose this battle. You will lose. And you will have lost while spending all your political capital doing it, capital that you will need but no longer have to fight other battles.

    That you believe this strengthens your side at all is a remarkable display of a vast ignorance of entry-level politics. As Mr. Obama once said, please proceed.

  11. So, Jake, what is the answer? Do we capitulate to Obamunism, and watch as this once-proud nation turns into the 21st century version of the Weimar Republic, or do we fight, tooth and nail, to try and preserve this Country as the beacon of freedom and individual initiative that it has been for well over 200 years?

    BTW, the Federal government IS a deadbeat. It has no money, except for what it takes from the productive citizens, and even that isn’t enough. The government STILL borrows $.40 of every dollar they spend, over a TRILLION dollars a year, with no end in sight. Obama’s spending makes Bush #43 look like a piker, by comparison. If you can’t see that this is a problem, then I submit that YOU, and those like you, are a major part of the problem.

  12. BTW, a little wisdom from the past….

    The democracy will cease to exist when you take away from those who are willing to work and give to those who would not. – Thomas Jefferson

    We are nearing the tipping point, between a Representative Republic, and socialism/Marxism.
    What will you choose?

  13. Here is a great article from the WSJ that shows we are becoming a nation of mooches:

    Unemployment is back where it was four years ago, yet there are now 7,000,000 more people on food stamps.

    In 1990, there were 3,000,000 people on SocSec disability, now there are 8.6 million. Have jobs become that much more dangerous?

    And thhere is more…

    http://online.wsj.com/article/SB10001424127887324461604578193141690993174.html?mod=googlenews_wsj

    Adam,

    The only difference between SocSecurity and a Bernie Madoff Ponzi scheme is forced participation of the new people into the group and the ability of the gov’t to borrow or print money to cover its debts. I have been paying into SocSec for 35 years. No where is there an account with my name on it and the amount I am GUARENTEED to receive.

  14. Bargain for spending cuts. Use the legislative process. Win elections and, particularly, the presidency. This is a democracy and a Democratic president just won reelection, while the GOP concurrently did not win a Congressional mandate. That means that Republicans don’t get very much of what they want. I’m sorry, but that’s just the way it is. You don’t threaten to trash the country’s finances because you don’t like the spending we incurred in the past. That’s outrageous. And frankly, it’s destroying the Republican’s ability to negotiation anything at all, from this point onward, because they’re increasingly revealing themselves to be complete lunatics when it comes to negotiating policy.

    Disagree? Then put that effort towards a) electing a president who shares your values, and b) electing a Congress that can enact your prescribed policy initiatives. Until then, stop whining. For goodness sake, stop complaining. You aren’t getting anywhere and you’re reducing your negotiating position while gaining absolutely no leverage on any front.

  15. Adam Faber

    Snuss says: “BTW, the Federal government IS a deadbeat. It has no money, except for what it takes from the productive citizens, and even that isn’t enough. The government STILL borrows $.40 of every dollar they spend, over a TRILLION dollars a year, with no end in sight. Obama’s spending makes Bush #43 look like a piker, by comparison. If you can’t see that this is a problem, then I submit that YOU, and those like you, are a major part of the problem.”

    Sorry Snuss: look at the definition of the word “deadbeat”. I’ve cited it above for you. None of these issues you listed involves the government not paying its bills, so it’s not a deadbeat, is it? Words have definitions. Why is that so hard for you and Ted?

    I never said that these aren’t problems; indeed, they are huge problems which we should address but instead of discussing spending you and Ted would rather take quotes out of context and call names that don’t apply. All emotion and no substance — it’s not productive.

    Terry says: “The only difference between SocSecurity and a Bernie Madoff Ponzi scheme is forced participation of the new people into the group and the ability of the gov’t to borrow or print money to cover its debts.”

    Again: no, that’s not true. The difference is in transparency. The government has never misrepresented that the younger workers pay for benefits for the older workers. A Ponzi scheme obscures the fact that new investors are only paying prior investors. Why are you contending otherwise when that’s clearly not how OASDI or Ponzi schemes work?

  16. The only reason that this government can pay its bills, is by using the money of others. The more it borrows, the more it has to borrow, to pay interest on its previous debts. It is like getting new credit cards to make the payments on your previous credit cards. The result is a fiscal “death spiral”. At some point, the lending will cease, and our economy will collapse under the weight of all that unsecured debt, similar to a sub-prime mortgage on steroids. I suppose that, then, we will meet your definition of a “deadbeat nation”, not that the title will mean anything.

    BTW, Illinois IS a deadbeat State, and we have numerous businesses, with lots of unpaid bills, to prove it. Some companies even went bankrupt, because of The People’s Republic of Illinois’ failure to reimburse them in a timely manner.

  17. Adam Faber

    Snuss, it’s not my definition of “deadbeat”; it’s the dictionary’s definition. That’s my entire point: Ted does not get to redefine a word to create a controversy. Ted could have used his platform to discuss the importance of reducing government spending but instead he chose to try to alter the definition of the word “deadbeat”, misquote the President and inaccurately label blocs of citizens as deadbeats. What was the point?

  18. JRM_CommonSense

    “No where is there an account with my name on it and the amount I am GUARENTEED to receive.”

    Clarifications:

    There is a record in the Social Security system with your name on it that keeps track of how much you have contributed and how much you will be paid on a monthly basis based on your contributions, the current Social Secutiry laws, and when you chose to retire. The details of that information are supplied to you every year on “Your Social Security Statement” which you receive in December.

    You are right that there is no amount that you are “GUARENTEED” to receive, because the laws have, and can change (see the efforts of some members of Congress to change the Social Security “entitlement” laws currently being talked about). Besides that, you could die 2 months after you retire and the only thing left is your wife’s ability to draw on your Social Security numbers rather than hers (if she can get more money that way).

    But your statement does say that based on all of the prevailing factors, at this time this would be your retirement benefit when you retire. After all, Social Security is not one of those public employee pension plans that only the chosen few get their unions to negotiate.

  19. Adam Faber

    Ted says: “You are so right Terry on Social Security – I wrote that it is a ponzi scheme in numerous posts.”

    And you’ve been wrong in numerous posts, Ted, but nice job at congratulating yourself on being wrong. Calling OASDI a Ponzi scheme may be a popular talking point with the uninformed but finding other people who are wrong like yourself does not make something actually factual. You link to articles that you’ve written, and I shall now reiterate my comment from your first link.

    “That’s how OASDI works: it takes money from the current workforce and gives it to those who are retired. That is not what a Ponzi scheme is and your comparison is hyperbole, at best. A Ponzi scheme is a fraudulent investment scheme where the fact that there is no return-generating mechanism beyond just contributions from new entrants is obscured; OASDI has always been completely transparent that payouts are underwritten by incoming tax revenue and benefits can theoretically always be sustained by raising taxes on new participants or reducing promised payouts. Whether we like that or not, or whether you even know how OASDI works or what a Ponzi scheme actually is, OASDI is not a Ponzi scheme to to call it such is disingenuous.”

    So, Ted, why do you keep repeating this fallacy when I have repeatedly demonstrated that you’re simply wrong?

  20. Illinois finances are completely wrecked, but it’s disingenuous to compare them to the federal government’s fiscal situation for one very important, and often overlooked reason: The federal government both finances it’s own spending and it prints it’s own currency. Illinois can’t call up it’s own central bank, ask it to purchase its bonds, and accept brand new $100 bills in exchange for the borrowed notes.

    The second reason this isn’t a fair comparison is because Illinois has a substantially poorer fiscal outlook than the federal government has at present, with the portion of future Illinois economic activity required to meet its obligations far, far higher than that of the federal government’s. Right now, the federal government’s debt owed to creditors is roughly 100% of GPD (give or take), with between 6-9% of GDP difference between revenues and spending each fiscal year since the Great Recession. These are two metrics that merit mentioning separately because they imply two things: One, our aggregate national debt isn’t particularly high. Japan’s is over 200% of GDP and their interest rates are near zero, just like ours. Two, the short-term imbalances are relatively high, and not sustainable. So we basically have a poor fiscal situation that is, in fact, not in a “death spiral” and not in any objective measure in any danger of causing a “collapse of the country” any time soon.

    The problem with arguments like “economy will collapse under the weight of all that unsecured debt” is both a fallacious premise and a key misunderstanding of what the nature of sovereign debt is. To suggest that we must act now now now, or death will come to all!… that’s needless scare-mongering. It implies that we are on the edge of the abyss. Folks – people on your side have been arguing that we’re on the edge of the abyss for more than 5 years already. In that time – the same period of time that record inflation and economic calamity has been predicted – inflation has declined, interests rates have fallen, and the economy has grown my nearly 9%. What’s more, sovereign debt is not “unsecured” because the vast majority of this debt is owed to Americans. No, we don’t owe all this money to China or Japan or the Netherlands, but the vast majority to American citizens who will receive U.S. dollars in exchange for the maturing notes to spend and save within the United States. The notes are secured by the American people. If you don’t believe we offer enough security to underwrite the debts, that’s your opinion, but the bond markets still call the United States Treasury the most secure, most stable, best long term investment on the planet.

    Finally – this silliness about OASDI being a “Ponzi Scheme” is just a slander against 75 years of government transparency towards a vastly popular social insurance program. You diminish yourselves as unserious, indeed as vastly illiterate and uneducated of even basic math and English, to compare a system with 4 layers of public accountability and 100% transparent finances with a fraudulent investment scheme.

  21. Adam,

    “A Ponzi scheme is a fraudulent investment scheme where the fact that there is no return-generating mechanism beyond just contributions from new entrants is obscured;” – I couldn’t have described SocSecurity better myself. Without the next generation, Social Security goes bankrupt.

    “The difference is in transparency. The government has never misrepresented that the younger workers pay for benefits for the older workers” When SocSecurity was started, it was a fund onto itself and had about 12 workers to one beneficiary. Now its closer to 2:1. Starting in the late 70’s Congress started rading fund. Tansparency has been long gone with SocSec fund.

  22. Jake, in case you missed my reference to the Weimar Republic, printing money, in the quantities needed to pay for our debt creates at least two major problems:

    First, all of our trading partners will demand hard currency (gold, silver, or commodities), because it will severely devalue our currency. Second, any savings that we have will become worthless, and (to quote B. Hussein Obama) “Prices will necessarily skyrocket”.

    BTW, the interest on the debt is being kept artificially low by the Federal Reserve. Once other countries quit buying our bonds because of our fiscal instability, and the fear of being repaid with hyper-inflated dollars, interest rates WILL rise-dramatically.

  23. NAVYFLYER09

    For the first time ever, Obama is right. We are not a nation of deadbeats.

    The American people, except for those who refuse to get off of welfare and also those who scheme the system, are NOT deadbeats!

    However, the politicians at all levels of government — federal, state, county and city — led by the likes of Obama and his fellow dems / libs / progressives and in conjunction with some repbulicans are DEADBEATS.

    These DEADBEATS do not care about the fiscal, and consequently the entire — future of OUR country. All they care about is giving money to their special interests who in turn will vote for them so they can continue getting their handouts.

    The head DEADBEAT Obama is attacking every aspect of our country but knows full well that if he successfully puts a financial burden so great upon OUR country that OUR country will collapse under the burden thus destroying 225+ years of the greatest country and turning it into a socialist state where the politically connected prosper and all others live at or below the poverty level.

    If you doub, you need to look no further than ILLINAUSEA where the state is bankrupt, the politicians prosper, the unions prosper and otehrs connected to the politicans prosper. Then look at Crook County and Chicago.

    It is the politicans who are the DEADBEATS!

  24. Just for the record, now that the Obama regime’s first term is over, he added $5.836 trillion to the national debt. That is $937 billion more than Bush43 added in 8 years.

    The good news, Sen Schumer said the Senate democrats will produce a budget this year. I just hope its not for 2010.

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