\u201cOf course everyone agrees a failure to raise the debt ceiling would have devastating repercussions for our economy,\u201d says the voice on the radio — one of a myriad. \u201cBut what the Republicans have to be sure they get in any deal to raise the debt ceiling is a firm commitment to cut spending in future …\u201d blah blah blah.<\/p>\n
No, everyone does not agree. For starters, I don\u2019t agree. In fact, if the goal is to cut spending, the only effective answer is to NOT raise the debt ceiling, to spend this fiscal year only that amount which the government takes in, and next year to LOWER the debt ceiling.<\/p>\n
Of course, the radio pontificators presumably mean \u201dEveryone who has any credibility on this issue.\u201d<\/p>\n
So let\u2019s start with the U.S. Senate. I agree with the U.S. Senator who voted against increasing the debt ceiling, saying: \u201cThe fact that we are here today to debate raising America\u2019s debt limit is a sign of leadership failure. It is a sign that the U.S. government can\u2019t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government\u2019s reckless fiscal policies. … Increasing America\u2019s debt weakens us domestically and internationally. Leadership means that \u2018the buck stops here.\u2019 Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.\u201d<\/p>\n
I agree. Do you? That senator, of course, was Barack Obama, Democrat of Illinois, back in 2006, when he still acknowledged his mentors were the Communist Frank Marshall Davis and the Rev. Jeremiah \u201cGod Damn America\u201d Wright.<\/p>\n
Federal \u201cTax revenues are projected to be $2,567 billion in 2011,\u201d writes Mayor Bill Woolsey of James Island, S.C. — who\u2019s also an economics professor at the Citadel. \u201cThis allows the government to pay the entire $414 billion in interest expense, and have $2,153 billion to spend on other things. Having interest payments at 16 percent of revenue seems a bit high to me, but that still leaves 84 percent of revenue to spend on other things.<\/p>\n
\u201cUnfortunately, government spending is projected to be $3,834 billion in 2011. The projected budget deficit is $1,267 billion. And so, the government actually wants to expand its borrowing and … the national debt by $1,267 (billion) over the coming year. Failure to increase the legal limit on the national debt will prevent this from happening.<\/p>\n
\u201cAnd, of course, that is exactly why the \u2018Tea Party\u2019 Republicans newly elected to Congress are balking at the increase in the debt limit. They want to stop the administration\u2019s plan for deficit spending. They don\u2019t want the government to borrow an additional $1.2 trillion and spend it. …\u201d<\/p>\n
When the Obama administration says that if the legal debt limit is not increased, then the U.S. will default on its debt, \u201cwhat they are really saying,\u201d according to Professor Woolsey, \u201cis that they will fix roads, buy military equipment, send out social security checks, and then tell bond holders that we are out of money. …\u201d<\/p>\n
If, instead, the government cut spending immediately to the projected $2,567 billion in revenues, \u201cThis is a 33 percent cut,\u201d Mr. Woolsey calculates. \u201cThat is significant. The resulting level of spending would be a little higher than it was in 2005. Of course, there has been inflation over that period. The real volume of government goods and services that could be purchased would be a little more than was purchased in 2003. …<\/p>\n
\u201cMy view is that federal government spending was much too high in 2003, and so, I have no problem with cutting it back to that level and even lower.\u201d<\/p>\n
Democrats do face a problem, however, if they can\u2019t borrow any more money AND they insist on continuing to spend as planned. To do that, Professor Woolsey point out, they\u2019d probably have to raise federal tax rates by about 50 percent next year. Think that would be pretty?<\/p>\n
\u201cThe size and scope of American government is wildly excessive, regardless of whether it\u2019s funded by taxes, borrowing or money-printing,\u201d wrote economist Richard M. Salsman in Forbes, May 17. \u201cNotice how both sides in today\u2019s U.S. debt debate quibble over how much to raise the debt ceiling and\/or when to raise it, never over reducing it, which requires slashing the size and scope of government. … The over-elaborate obsession we see with the public debt and its artificial ceiling is but a ruse to divert attention from the root evil of excess government.\u201d<\/p>\n
The best decision at this stage would be to abolish the public debt ceiling, Mr. Salsman argues.<\/p>\n
Since a debt ceiling never actually restrains growth in the public debt or spending, but only appears to do so, \u201cIt misleads citizens into believing institutional fiscal restraints exist,\u201d Mr. Salsman writes. \u201cSince the U.S. debt ceiling was first introduced in 1917 invariably it\u2019s been raised whenever necessary. … There have been 85 increases in the U.S. debt ceiling since 1940 (11 in the past decade alone), yet growth in federal spending prior to each episode didn\u2019t slow but usually accelerated. …\u201d<\/p>\n
Furthermore, a supposed U.S. public debt ceiling \u201cpermits Washington\u2019s spendthrifts and prodigals to periodically devote a few months to loudly and undeservedly proclaiming themselves paragons of fiscal rectitude, when in truth they are complicit cohorts of the bipartisan gang that sunk the nation into so much debt in the first place,\u201d Mr. Salsman writes.<\/p>\n
Finally, a GOP presidential candidate who has no visible qualifications except having been right about nearly everything since he went to Washington (think Winston Churchill, out of power and ridiculed for his \u201cparanoid fixation\u201d on German re-armament in the 1930s), Ron Paul was interviewed by Candy Crowley of CNN on June 5:<\/p>\n
Crowley: How much of the House rejecting any increase in the debt ceiling until there is a deal to cut something in government spending is real? How much of that is real and how much of it is a game of chicken? … Is this now in the gamesmanship stage rather than the serious stage?<\/p>\n
Ron Paul: \u201cOne hundred percent gamesmanship, I\u2019m convinced. They\u2019re not serious. If they thought there was a problem, they would cut spending and get down to business. But no, they\u2019re not serious. It\u2019s who\u2019s going to get the blame and who\u2019s going to get the power and who\u2019s going to get the political benefits, … that\u2019s what it\u2019s all about. But it will come down to the wire and they\u2019ll pass it. …\u201d<\/p>\n
Crowley: And in the end, what do you think would happen if it didn\u2019t pass? Because you\u2019re right, we\u2019re told that economic recovery would be threatened if the debt ceiling was not raised. Do you believe that?<\/p>\n
Ron Paul: \u201cIt depends on how it\u2019s done. If it was a sign that we were getting our house in order, it might restore a lot of confidence, it might restore confidence in our dollar. … But what they don\u2019t want to think about is where we\u2019re going. Because they say it could be bad and there could be some difficult circumstances on delaying payments. But … governments always pay their bills, they never default by not paying bills. They always default by paying off with junk money. And we\u2019re already doing this.<\/p>\n
\u201cWe\u2019re worrying about a default?\u201d asks Congressman Paul. \u201cThe default is on the average person today, because their inflation rate is higher, they\u2019ve lost their jobs and so we\u2019re defaulting all the time. The default is just who is going to get punished the most, the people who got bailed out on Wall Street, … or will it once again be the middle class and default on them by just printing money?\u201d<\/p>\n
\u201cWe\u2019re defaulting all the time,\u201d says Congressman Paul, and the way you can tell is that your dollars grow increasingly worthless.<\/p>\n
Can anyone else remember when the lunch buffets in Las Vegas were $5.95 and the dinners were $7.95 and you could get them for free if you gambled a little and the breakfast special was $2.00?<\/p>\n
Downtown, I drove by a sign for a $17.95 seafood buffet Wednesday. I\u2019m sure it\u2019s good. On the Strip, $25 to $30 buffets are now common. How soon do you suppose they\u2019ll be $37.95? Think your paycheck will have doubled by then … assuming you have one?<\/p>\n","protected":false},"excerpt":{"rendered":"
\u201cOf course everyone agrees a failure to raise the debt ceiling would have devastating repercussions for our economy,\u201d says the voice on the radio — one of a myriad. \u201cBut what the Republicans have to be sure they get in any deal to raise the debt ceiling is a firm commitment to cut spending in […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[42,18,44],"tags":[],"class_list":["post-813","post","type-post","status-publish","format-standard","hentry","category-2012-election","category-economics","category-money"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/pWqFl-d7","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/posts\/813","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=813"}],"version-history":[{"count":1,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/posts\/813\/revisions"}],"predecessor-version":[{"id":814,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=\/wp\/v2\/posts\/813\/revisions\/814"}],"wp:attachment":[{"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=813"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=813"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vinsuprynowicz.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=813"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}