Note: Blogger has changed its look for us bloggers. I hate it. I can't find anything. I can't find any comments made by readers so please forgive me if I do not respond right away to comments.
One important issue that will have gigantic ramifications on the elections in November has been entirely ignored. You have heard of the October surprise. Well what of the September surprise? Its the looming hitting of the debt ceiling coming in September. I am sure you remember the debate of the issue last year. What we got out of that charade was an even bigger mess than that which was in place before. Recall that there were mandatory "cuts" that were split 50/50 between domestic and military budgets. The "cuts" have mean that federal government spending has proceeded apace at adding around $5 billion a day to the national date. Indeed, I wrote a piece on this saying "we've been had". If you recall I have written much on this topic (Just say no - March 6, 2011). In order to control government spending, I prefer my 20 percent solution where the government cannot spend more than 20 percent of the previous year's GDP. However, already in place is a law that limits government spending - the debt ceiling. When the issue looms again we will be treated to endless commentary on "shutting down the government". You can imagine the handwringing and angst. The democrats are off the hook since every one of them will vote to increase the ceiling. They will sit back and revel in the agonies of the republicans who will be in the eyes of the crosshairs. Do they shut down the government right before the election or do they raise the ceiling? All the pundits will say that if they capitulate and vote to raise the ceiling, they have abandoned their smaller government mantra and might lose their base and be pilloried as hypocrites. If they vote to keep the current ceiling which in fact will impose a hard cap on government spending, the media will attack them with even more vigor. They will scream that social security checks will stop, the military won't get paid, seniors will be imperiled, babies will die, students will not be able to attend college and just basically locusts and famine will plague the land. Of course all that is nonsense since the government can still spend an obscene amount of money - $3.8 trillion. Its only that the amount cannot keep growing and the government will have to decide how to allocate what they have granted themselves last year rather than granting themselves more this year. So the question is "what will Mitt Romney say?"
Harold A. Black is professor emeritus in the Department of Finance, University of Tennessee, Knoxville having retired after 24 years of service. He has served on the faculties of American University, Howard University, the University of North Carolina - Chapel Hill and the University of Florida. His government service includes the Office of the Comptroller of the Currency and as a Board Member of the National Credit Union Administration. He also has served on the boards of directors Home Savings of America and its parent company, H. F. Ahmanson & Co., Irwindale, California prior to its merger with Washington Mutual Savings Bank, on the board of New Century Financial Corporation, Irvine, California, then the nation’s largest real estate investment trust and as director and later chairman of the Nashville Branch of the Federal Reserve Bank of Atlanta. He writes an occasional article for the Knoxville News-Sentinel at http://www.knoxnews.com/staff/dr-harold-black/. His web page is haroldablackphd.com