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Debt Ceiling Debacle: We're Already at 100% GDP

written by: •edited by: Michele McDonough•updated: 8/10/2011

There are very few people who are happy with the legislation concerning our nation’s debt ceiling, just signed into law on August 2, 2011. On August 5, Standard & Poor downgraded the USA’s AAA credit rating. Let’s put on our accounting hats and fix this big mistake!

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    Extra! Extra!

    Is there anybody who hasn’t seen today’s headlines screaming about the debt ceiling? It’s totally frustrating that even with President Obama signing the new law, we still suffer the shameful stigma of our credit rating’s reduction from AAA to AA+. Standard & Poor took a full 72 hours to reach this decision; and the wonks at this credit rating agency--the only one of three American agencies to downgrade our rating--have given too much thought to matters that don’t concern them.

    After all, what right does Standard & Poor have to point fingers at our politicians for poor policy making? Isn’t that rather poor policy making on the part of Standard & Poor? It seems this decision was based largely on their perception that our politicians don’t exactly get along. However did they get that idea!

    CNN’s Wire Staff, on the CNN website late on August 5, 2011, posted an item called Obama Official Calls Credit Analysis Rating ‘Way Off’, in which Standard & Poor’s head of sovereign ratings (that sounds so grandiloquent, he must be something like a Grand Poo-bah) stated the rating reduction resulted from “political risks [and] rising debt burden."

    Well, besides the spectacle of our politicians frolicking unmerrily through unproductive July sessions, there is the little matter that our legislators, realizing in May that we had already reached the debt ceiling, removed two liabilities from the nation’s balance sheet, thus creating a false positive balance on the side of assets. This was done to keep people happy prior to the August 2 deadline; I guess whoever did this figured, “Who will ever know?" However, once the House approved the new debt ceiling, the liabilities were returned to the balance sheet, thus throwing our debt-to-GDP ratio in excess of 100%. When I explained this to my daughter, she blurted out, “You mean we’re not making any money?" Yup, that’s right, we’re not.

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    A Voice of Reason?

    Senator Tom Coburn—a Republican from Oklahoma—also caught the CNN cameras’ attention late in July as he and Kent Conrad, Senate Budget Committee Chairman, both of whom are members of the House’s notorious Gang of Six, protested against any preposterous postulation that the two political parties don’t cooperate. The two of them actually seem to believe that politicians get along much better than perceived by the public, but they simply suffer from the indefatigable insensitivities of the free press--newsmakers who insist on inserting themselves into their stories in order to create news. What a strange idea that is!

    Well, as luck would have it, Senator Coburn, bless his pointy little Republican heart, has been speaking out for several years now that there are many things to cut out of the federal budget besides the programs that are so desperately needed for the poor and underserved.

    If you were the Grand Poo-bah of Accounting for the USA, which of these programs would you leave intact--and which ones would you see as a threat to your company's balance sheet? Which would you strike out more ruthlessly than Uncle Bob ditching Aunt Ruth? The following ideas represent just 21 of Coburn’s suggested budget cuts. Some of them he’s been proposing for several years; he published a book called Wasteful Spending 2010 and has basically re-issued it this year as Back in Black, which reiterates about a hundred ways for the government to wipe out frivolous spending and save $9 trillion over ten years.

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    Accountants, Sharpen Your Pencils

    1. The National Institute of Health has spent about $500,000 per year since 2008 studying male Vietnamese prostitutes to better understand disease transmission.
    2. Over $700,000 was given to the University of New Hampshire to study cow flatulence, in an effort to understand greenhouse gas emissions. Note: The study shows the cows pass more gas through the front end than the back end. I'm so relieved!
    3. The City of Las Vegas received $1.8 million to pay for a neon sign museum. If the government would just keep its checkbook in its pockets, there are private corporations or even individuals who would foot the bill for this--my Uncle Joe already started one of these museums in his basement.
    4. Medicare and Medicaid have forked over $35 million on claims submitted through phony clinics for fake patients…plus Coburn cites a cool billion going to pay for wheelchairs and prescriptions plus more for people who are, I’m sorry to tell you, deceased.
    5. Almost a billion has been spent on printing government documents that few people read, especially in the computer age. When was the last time you ached to hold an ink-on-paper copy of the President’s Budget or perused the Congressional Record?
    6. A much smaller amount—only $35,000, but these figures do add up—was utilized to make a video starring an animated mouse to teach children about the history of printing. I’m sorry, but what’s wrong with reading the printed word about the history of printing—and trying an experiment like the hand-made bookbinding we did in the Girl Scouts years ago?
    7. Prisoners regularly file tax returns while in jail and have claimed $112 million to date in refunds. The IRS even publishes a booklet telling them they can file, called “Get Right With Your Taxes."
    8. Last summer almost a half million dollars was allocated for expenses of government officials attending the 18th International AIDS Conference held in Vienna, Austria—complete with wine tastings and sightseeing.
    9. The Bureau of Land Management has spent $668 million to protect wild horses and burros on both federal and private lands. The senator reports that this year’s expenditure increased by 58% to $64 million.
    10. The government spent $40,000 on a study that proves college students drink more when they are traveling in Europe.
    11. A rusty, rusticated locomotive from the 1920s was nicely restored to the tune of $100,000 in federal funds.
    12. The Department of Health and Human Resources takes care of health care agencies with its many fine programs, to the tune of $338 million—with its services duplicated by other Health Resources and Services Administration programs, including Medicare and Medicaid programs as well as the NIH, FHA, and USDA.
    13. The Census Bureau has paid out almost $500 million to stimulate participation in the 2010 census, including a totem pole built in Alaska—where participation in the Census actually decreased anyway.
    14. About $200,000 was spent by the Department of Education on sending teachers from Cleveland to China to study the educational system in that country.
    15. The National Science Foundation allotted over $200,000 to study why politicians make ambiguous statements and learn exactly when they are most likely to be ambiguous. Like, could that be when an election is coming up? Or maybe just when their lips are moving?
    16. The Federal Transit Administration gave $3.7 million to Howard County, Maryland, to buy three electric buses. Three buses...over a million per bus? A footnote to this study reveals that this county has the third highest median household income in the nation (over $101,000 per year).
    17. The Hollings Manufacturing Extension Partnership, a nonprofit consultation business for business owners with offices throughout the country, received $124 million to provide services that are duplicated by the SBA (which received its own allocation of $113 million).
    18. With $168,000, The National Science Foundation studied the sexual behavior as well as the feces of wild blue monkeys in the Amazon to understand the evolution of group living behaviors. Are you kidding me?
    19. Despite the work of for-profit entities such as Harris and Gallup, the U.S. government doled out $2.3 million to learn why Americans voted as they did in 2008. This is in addition to allocations over the past decade of up to $6 billion in grants to university researchers as well as $18 billion in endowments, all to answer the same question. Don’t feel too bad though--some of the money will go toward the 2012 election. I can’t wait for that!
    20. The Department of Transportation spent $571 million on highway beautification—flowers and so forth. Think how many potholes that could patch! In Niles, Ohio, where I live, a local landscaper does this work voluntarily, out of his own pocket and with donations by appreciative individuals. That’s how it should be done.
    21. A grant of $213,000 has been issued to study the degree of civility demonstrated by Americans toward one another. Isn’t that something that Ellen DeGeneres could do as part of a secretly taped green room segment?
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    Coming to News Stations Soon: The Dirty Dozen, cowboy, j2media It was hard to stop at just these 21 choice picks out of Coburn’s 100 ideas. They alone add up to some $1,683,754,288,000 in savings—and that, my friends, is almost $1.7 trillion. Add in a couple more ideas, like the money spent on cowboys writing poetry or the $6.6 billion that Iraq thinks we still owe them and you’re up to the same amount as the monetary error calculated by Standard & Poor as part of their ill-advised recommendation. Hard times are ahead, and I can’t wait to see who will be among the Dirty Dozen designated for the delicate task of deciding on recommendations come November. Hold on to your hats!