Now the battle looms to raise the debt limit. This is an inside-the-belt-way shell game wherein the parties of power each beat their chests and growl at each other about who is the most responsible before they both vote to increase the limit on their collective credit card.
America is careening towards a financial Armageddon. The president proposed a budget for 2012 that projected a deficit of 1.6 Trillion dollars. That is trillion with a “T.” Gone are the innocent days when one of the perpetually re-elected could quip, “A billion here and a billion there and soon we’re talking about real money.” Now billions disappear into the federal sinkhole at the rate of 4.08 billion per day. What does a trillion look like? If you went into business the day Jesus was born, and you lost a million dollars a day, 365 days a year, it would take you until October 2737 to lose a trillion dollars.
According to the Congressional Budget Office (CBO) the budget deficit just for February 2011 hit $223 billion, which means more debt was added in just that one month than was added in all of 2007. The personal share of the federal debt borne by every tax-paying citizen is now increasing at the rate of $50 per day seven days a week, 364 days a year. That is an increase of $1,500 per month and $18,250 per year per tax payer.
That sounds serious. However, it doesn’t appear as if our elected officials take it seriously at all. The Republicans propelled into the majority by the grassroots activism, high energy and victories of the Tea Party Movement promised to cut 100 billion from the 2011 budget. President Obama submitted that budget which spends 3.7 trillion with a deficit of 1.6 trillion dollars in 2010. It was never passed even though the Democrats controlled both houses of Congress and the White House. This left the door open for the Republicans to use the continuing resolutions necessary to keep the government operating as vehicles to wring spending cuts from the Democrats. After theatrical bi-weekly dramas these cuts were in the range of ten to twelve billion dollars.
Then finally, with the Democrats imposing an artificial deadline for the passage of a budget that was almost half expended and which they had failed to pass when they had undisputed control, the two parties of power struck what they hailed as a “Historic” compromise. They first told us they slashed thirty eight billion from the budget. The actual number, according to the Congressional Budget Office has since dwindled down and down until today it is estimated to be less than a billion. The Federal Government will still increase the national debt by several trillion dollars this year and our leaders expect us to celebrate their conversion to fiscal sanity. Isn’t the definition of insanity to continue doing the same thing and expect different results? Just because they’re crazy doesn’t mean we have to cheerfully put on an economic straight-jacket and walk voluntarily into a padded cell at the poor house.
Representative Paul Ryan (R. WI) introduced a budget which he says takes on the sacred cows and gores the sacred bulls by cutting six trillion from the projected budgets of the next ten years. The Democrats immediately assaulted this plan as cruel, heartless, and inadequate. The President announces his latest plan which he assures us he meant to introduce all along once someone else had opened the debate. In His plan Mr. Obama plans to cut the projected deficit by stopping waste and abuse in government programs and by taxing the rich.
There are two problems with this approach: if we had all the money politicians have promised to save by stopping waste and abuse we would have a surplus, and the rich don’t have enough money. It has been estimated that if you confiscated every dime every person who makes over one million dollars per year makes it would only generate enough money to run our debt addicted government for less than one year. What would we do for the next year? And the fact of the matter is that the tax increases the President wants are not confined to the rich. They would target everyone with a combined gross income above 250,000. That group includes most small business people. This approach will take money out of the pockets of the greatest creators of jobs: small business people. And it still won’t generate enough money to stop the red ink.
Now the battle looms to raise the debt limit. This is an inside-the-belt-way shell game wherein the parties of power each beat their chests and growl at each other about who is the most responsible before they both vote to increase the limit on their collective credit card. Wouldn’t it be great if we could all just raise the limit on our credit cards indefinitely? And now with the Federal Reserve buying our own debt to finance the repayment maybe we could increase the limits on all our cards so that we can pay our Visa with our MasterCard and our MasterCard with our Discover and our Discover with our Visa. How could that ever go wrong?
The storyline we are supposed to believe now is that in exchange for raising the debt limit there must be meaningful movement towards a balanced budget amendment. That sounds so encouraging. If we just had a balanced budget amendment the problem will be solved. As always there are several spare balanced budget amendments lying around in Congress waiting for enough votes or at least an opportunity to get to the floor for a debate before they are stuffed back in a committee until the next time the shopaholics on the Potomac need to convince the great unwashed in fly-over country that this time they are serious about curbing their over-spending.
Even if they were passed what good would they do? The President and the Democrats have already shown that they think the way to solve the deficit problem is to raise taxes. The Republicans have a plan that appears very dramatic but at the end of a decade still has not ended the deficit spending, which means the debt is still growing.
The International Monetary Fund has looked at these plans and says it appears America is not serious about dealing with its addiction to debt. If we don’t do something soon our creditors are going to stage an intervention, and they will dictate how we must restructure our lives and our nation if we want any more credit. And we are addicted to credit.
A balanced budget amendment merely requires a balanced budget, and budgets can be balanced by increasing taxes instead of decreasing spending. What we need instead is a spending amendment which would limit federal expenditures to a reasonable percentage of the nation’s income. If we can’t stop the spending we will eventually destroy our credit, collapse our economy, and curtail our liberty. In other words, no matter what we the people want Uncle Sam will continue to spend, spend, spend as long as we pay, pay, pay.