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Debt Ceiling Ultimatum -- Obama's Missed Opportunity during his July 25th. National Address

By       Message Ayesha Nariman       (Page 1 of 7 pages)     Permalink    (# of views)   1 comment

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President Obama missed an opportunity when he addressed the nation on Monday, July 25, 2011, prime time.    

First, the President needed to lay out the facts, i.e., the debt ceiling needs to be raised to pay for past spending and tax cut Bills passed into law (Reagan - Bush 2 & now Obama).  

  A comparison of the debt added by Bush 2 and Obama is shown in the Chart below:

What's also important, but not evident, on this chart is that Obama's major expenses were temporary -- the stimulus is over now -- while Bush's were, effectively, recurring. The Bush tax cuts didn't just lower revenue for 10 years. It's clear now that they lowered it indefinitely, which means this chart is understating their true cost. Similarly, the Medicare drug benefit is costing money on perpetuity, not just for two or three years. And Boehner, Ryan and others voted for these laws and, in some cases, helped to craft and pass them.

To relate this specifically to the debt-ceiling debate, we're not raising the debt ceiling because of the new policies passed in the past two years. We're raising the debt ceiling because of the accumulated effect of policies passed in recent decades, many of them under Republicans. It's convenient for whichever side isn't in power, or wasn't recently in power, to blame the debt ceiling on the other party. But it isn't true.

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By Ezra Klein   |   01:00 PM ET, 07/25/2011

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Footnote: This chart is from Erza Klein in the NY Times.   My understanding is the 2 Bush Tax cuts, and another Business stimulus in 2002 cost $2.3 T not $1.812 T.   So my numbers on the Bush side of the equation are higher.

Obama, should have also explained clearly to the nation that this is the first time an opposition party is holding a President and the country "hostage" over raising the debt ceiling. (See Appendix A)

Hence, during his national address, Obama should have, after explaining the reason for the debt ceiling increase, thrown down the gauntlet and issued an ultimatum.   He should have clearly enunciated that t he USA will not be held hostage to politics under his watch.   The debt ceiling will be raised in an unencumbered "clean" vote.    We will not allow the USA Debt to lose its AAA rating.

  Hence, anyone in Congress who voted for:

Direct costs:

>   The 2 Bush tax cuts (2001 & 2003)

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  > The 2 Bush Wars (2001 - 2011..)

  > The Unpaid for Medicare Part D (prescription drug benefit) (2004)

> TARP 1 & 2 (2008-2009)

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I am originally from Bombay India, born 1948. I came to the US in 1974. I have two grown sons.

Post my divorce, I obtained an MBA from SUNY at Buffalo, in Financial Institutions & Markets. I own a Financial Planning Practice (as a (more...)

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