‘We will raise the debt limit. We always have. We will do it again.” — Pres. Barack Obama
President Obama’s words highlight the charade that surrounds the recurring debate over whether it is in America’s best interest to increase the debt ceiling. The president articulates a simple sentiment that pervades his administration: Business in Washington is best when it’s business as usual.
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The pattern of pretending to debate the factors contributing to Washington’s debt addiction is a rehearsal of rhetoric that, while increasingly circular, produces one-directional results. As the arguments for and against raising the debt ceiling make their way back and forth between the White House and Congress, continuing this exercise without a balanced-budget amendment in place means that the debt ceiling will perpetually move in only one direction: up.
With the political will for debt reform gaining momentum — propelled by the nation’s declining credit rating, rising oil prices, and high unemployment — it is clear that the status quo can no longer be king. The debt-ceiling charade must come to an end, and the federal government must implement binding, permanent, structural spending reforms — most important, a balanced-budget amendment.
Blindly raising the debt ceiling yet again carries significant risk — indeed, a risk that easily rivals that associated with not raising it. In the last three years, gross federal debt has grown from 64 percent to 93 percent of GDP. Debt of this magnitude crowds out much-needed private investment and could lead to reduced private-sector growth, persistent unemployment, a devastating fiscal crisis (think of Greece), and skyrocketing interest rates. The financial shortfalls created by such conditions could seriously impair Congress’s ability to fund everything from defense to entitlements.
Too often in the current debate, Washington overlooks these daunting threats to our economy that will result from perpetually increasing our national debt. Instead of acknowledging those threats and trying to address them, the establishment uses scare tactics that have proven reliable in the past.
For example, Treasury secretary Tim Geithner, following the lead of past administration officials, presents only the doomsday scenario in which the economic consequences of not raising the debt ceiling would be “catastrophic.” Having abdicated its duty to develop a responsible fiscal policy, the federal government forces the American taxpayer to choose between taking on more debt and facing the “unthinkable.”
As history suggests, the strategy of creating a debt-ceiling boogeyman works every time, and, without a balanced-budget amendment in place to stop it, the cycle continues. Elected officials who have grown dependent on perpetual deficit spending will again quickly reach the limit on each credit card the taxpayers reluctantly give them. Having maxed out one card, they habitually demand another, using threats of fiscal Armageddon to extort taxpayers into giving them “just one more.”
Unfortunately, as the president reminds us, they will do it again — that is, unless we insist that this time be different. This time, the American people should refuse to let Congress raise the debt ceiling without first passing a balanced-budget amendment, one that would compel Congress to hold the line on future spending. And considering that Americans overwhelmingly oppose raising the debt ceiling but overwhelmingly support the idea of balanced-budget amendment, it shouldn’t be too difficult for members of Congress — especially those who agree that refusing to raise the debt ceiling would be “unthinkable” — to commit to passing a balanced-budget amendment before (and as a means of gaining public support for) raising the debt ceiling.
Recently, all 47 Senate Republicans signed on to Senate Joint Resolution 10, a balanced-budget amendment proposal sponsored by Sen. Orrin Hatch and me that would prohibit Congress from spending more than it collects each year unless two-thirds of the members of both houses voted to authorize a limited deficit for a specified purpose. It would likewise prohibit Congress from spending more than 18 percent of annual GDP, raising taxes, or raising the debt ceiling without a supermajority vote in both houses. Similar legislation, introduced just a few days ago by Rep. Joe Walsh of Illinois, is gathering momentum in the House. Under this proposal, a simple majority of Congress couldn’t impulsively raise the debt ceiling to accommodate perpetual spending increases.
As this debate moves forward, I will aggressively oppose efforts to raise the debt ceiling until both the Senate and the House pass the Hatch-Lee Balanced Budget Amendment. I invite my colleagues in both parties and in both houses of Congress to do the same. Those who fail to do so will render prophetic President Obama’s words: “We will raise the debt limit. We always have. We will do it again.”
Heck yes to NO on the debt ceiling increase, but with a twist. Regardless of the balanced budget amendment effort, DON'T RAISE IT.
Send a clear and unequivocal message, YOU DON'T NEED MORE CREDIT, YOU NEED TO CUT CURRENT AND FUTURE SPENDING NOW!!!
Why replace courage with structural hurdles (since when is a "super majority" any real comfort)? If you guys need to "borrow" something, borrow some guts.
If we simply stay on our current path, the US will be finished by 2017 and the world will be completely under the control of China, however I suspect the EU will replace the Dollar as the worlds currency reserve, as China will have the largest economy, but not a very reliable currency.
The effects on the US will be catastrophic, as there will be no middle class, only the super wealthy. The average American will more and more resemble the typical model in Europe where children will live with parents longer and longer in order to ever afford a home or apartment of their own. Fuel price will remain high regardless of what is done, and inflation will as well for the obvious reason fuel prices require it.
Paying down our debt will be a noose around the neck of our people for decades, and therein lay the structural crisis. Each year it digs a deeper and deeper hole, while each year we lose our economic base to pay for it.
Obama created a system to provide the super-rich an easy windfall of profits at the expense of the working class who can no longer find work as jobs have simply moved to China and elsewhere as a means to increase profits for the super-rich. He wants to reclaim their gains through taxes, but that too is a double edged sword, they can simply move.
I feel it is too late personally. The working class have been sold down the river for 20 years, and nobody is proposing policies to bring back jobs to America. The debate is how can we reclaim profits of the super-rich and put it in government hands.
Whoever becomes the next President will be the last President in the history of America where we were the worlds super power for the past 100 years. After that, Americans will simply need to adjust to life as being along the lines of Britain, France, Germany, Japan, or any other single nation of many in which our influence doesn't mean much.
Our military will be scaled back by a massive degree, NASA will have had its hey day and there will be no space program of any importance of the past.
I could go on and on, but why bother, we can't even get our government to simply stop pending more than it brings in through revenues. The combination of selling out the American workforce in short term gain to increase profits of the super-wealthy, while increasing social dependency and having no rational way of capturing the increased profits of the wealthy was doomed the minute it was conceived.
I have no expectation our government will do anything to improve the situation as they fail to understand the situation as does the public. While we vote them out in frustration, the ever increasing demands of spending continue to grow, regardless of who we elect as nobody has the political will or foresight to put an end to it. Thus, we are all riding the deck of the Titanic while the band plays, and the iceberg is no longer a theory. It is right there, I can see it clearly as we approach head on at an ever increasing speed, its already every man. woman, and child for themselves. Nothing is going to return to the past norms, the chaotic scene we see today is simply going to become even more chaotic and unstable.
This is all urinating in the wind. Without changing our monetary system from this debt based currency to a non-debt based currency all a balanced budget will do at this point is crash the economy. What happens in a debt-based monetary system when total debt is reduced? The money supply crashes! It may very well crash anyway as the sovereign debt crisis unrolls. But it doesn't have to be this way.
Congress could just allow gold and silver to trade freely as money. Or it could issue the greenback currency like Lincoln did to pay the Union troops to defeat the South to pay our debts. Why doesn't anyone advocate for these changes?! Because the current system is locked up like a Mexican drug cartel.
Democrats own this system whole-heartedly. Their socialist program would collapse completely with anything approaching sound money. For the longest time I couldn't understand why Republicans stood for this debt-based monetary system. Then it occurred to me that on the open market, Republicans can be purchased just as well as Democrats and once the system is in place they are just as captive as we are and so they might as well be (extremely) well compensated for supporting it.
I want someone with the stones to change our debt-based monetary system to a non-debt-based monetary system. We are deluding ourselves if we think keeping this current monetary system won't rot what is left of the American identity. Romney, Huckaby, Trump, Jeb Bush, etc., etc. are more of the same old same old. More welfare, more war, more inflation, more currency devaluation, more need to prop the monetary system up with more debt all to keep the bankers well fed. It is time to demand real change people.
This independent does not and will not ever believe that a balanced budget amendment is a good idea or that it would help this country. Although I vote candidate over party I think both democrats, republicans, and the tea party are way off track. The job picture was improving until both parties began bickering, using scare tactics on the American public, and a total break down of even the pretense of bipartisanship. Financial, social, political, and other conditions change from time to time and a balanced budget amendment that would force things to be a certain way no matter what could bankrupt or send the United States into total disarray in the future. I took economics classes back in college and learned a lot. What I am saying is based in fact. But it is blantantly obvious that neither political party is going to listen to anyone that does not share their ideas. The recent poll that showed extreme public disatisfaction with both parties in congress, the current administration and both republican and democratic policies is a strong indicator that no one believes in the current congressional representatives from either party.
The horizion for raising the debt ceiling is less than 60 days. Arguably, a divided Congress can't produce a balanced budget amendment bill in that time frame. There's absilutely no doubt that the fifty states cannot assemble to ratify in that time frame. In fact, thirty two states have petitioned for a balanced budget amendment and the remaining necessary two are no where to bee seen. What does that say of the probability of thirty eight legislatures (or state conventions, if it comes to that)getting the job done.
That the budget was practically balanced in fy 2000 says that the need for an amendment is overstated. Had there been a BBA in 2001-2010, would it have been possible to spend $1.121 trillion in "Supplemental Spending" bills to fund the two wars off budget? Certainly TARP I and II would not have been spent, and today we would have a better idea of what happens in a financial crisis without government intervention.
@Jerder
The jobs picture is smoke and mirrors, it is not on track nor was it at any point. I do not want to have to spell it all out for you as I have in the past for others, but this is the facts.
March 2010 Total Unemployment was 16.8%
November 2010 Total Unemployment 17.0%
March 2011 Total Unemployment was 15.7%
It was actually increasing between until December and January as holiday jobs caused the biggest drop in the rate. So although you look at the "Official Unemployment" rate of 8.8%, that is not telling you anything that is taking place in the real world.
This is how the EU, Japan, and other civilized countries do their unemployment, because it takes reality into account, not the way our politicians ignore discouraged workers, marginally attached workers, or those employed part time due to economic reasons but prefer a full-time job.
@Greg Morgan
The Debt Ceiling doesn't have to be raised at all. It isn't the end of the world if it isn't raised, it would actually be fine with me if they didn't raise it. You simply have to pay the interest on the debt each month first with revenues from taxes as they come in as each month revenues exceed debt interest, thus there is no fear of default and ruining our credit rating at all.
However, they the government has to get busy cutting spending as they wouldn't be borrowing $4 billion a day anymore as well, so they would need to begin cutting spending to the tune of $4 billion a day and the debt ceiling would be just fine where it is.
Most likely a measured amount of both would be best, raise it enough as to stop the $4 billion a day borrowing by about 25% through the end of fiscal year Sept. which is $1 billion a day in real cuts and raise the debt ceiling to that level as to be hit again.
2012 budget do it again, raise the ceiling as much through the year as to allow borrowing of $2 billion a day, which is another $1 billion a day cut and 33% deficit reduction. Poof you have reduced the deficit by 50% between now and the end of fiscal 2012 Sept.
Guess what I would do in 2013? and again in 2014? By 2015 you would have a balanced budget, and you wouldn't ever have to raise the debt ceiling again, but I would begin lowering it until our debt was paid off and we would save all that interest each year we cut it. I might then go to the 10% a year reduction plan, as it gets easier to pay your interest on a debt as you pay down the debt balance by a factor of 10% a year.
Poof simple, now all you have to do is prioritize your spending within those parameters and you once again have the most wealthy nation on earth within a short period of time. Most importantly each and every year moving forward things improve dramatically, rather than slowly heading over the cliff on a constant basis.
Less government means more private sector, so those fearing government cuts would kill the economy are simply misguided. Less government means revenues go farther and besides, you have no choice, the argument is over. Failure to do something similar means we debt spiral by 2017 and life as you knew it is gone forever.
To those of you that think this would butcher government to the bone, that wouldn't be accurate either. As you get government off the backs of the private sector, the private sector does what it does best, grows.
Local, State, and Federal Government accounts for 46% of GDP where Private Sector is 54%. 54% supports 46%, that right there is the problem. As you shrink government much of it simply becomes private sector, it doesn't all vanish into thin air. However it must do so with a profit as opposed to with tax revenues.
Take the Postal Service as an example. There are Post Offices in rural towns with 2 employees, and one of them is a Post Master making top dollar, dumb. In some areas there are 5 or more Post Offices within a 5 square mile area, dumber. The Post Office loses billions a year due to this type of waste, dumbest.
This is a government agency with a monopoly of a market that spans the entire nation, that has so many revenue streams, yet never breaks even. It isn't because of a lack of revenue, it is because it functions like a government agency and isn't worried about going out of business as every year it gets a bailout. Why do you think we need to borrow $4 billion a day? The Post Office model is in play all over government.
This is just a thought, how much would you like to bet the Post Office could make a profit if it simply stopped delivering mail, and everyone had to pick theirs up at the post office? We could even go back to the days of the $0.10 cent stamp and make a profit.
No vehicles, no delivery drivers all over the nation, no vehicle insurance bills, post office payroll would be cut by more than 60-70%, as would benefits expenses, win-win, more efficient and effective government. Since we went that far, why not just privatize it?
596,000 employees
36,400 Post Offices
218,000 vehicles
.01 penny increase in gas costs Post Office $8 million more to fuel the fleet lol, wonder how many billions they will lose from now on.
2009 they used 444 million gallons of gas for $1.1 billion. Gas has literally doubled since then so do the math lol.
largest employer after Walmart in the nation.
largest vehicle fleet in the world.
In 2010 it took in $67.05 billion in revenue.
2010 Net Income $8.51 billion
2010 Deficit (LOSS) $8.5 billion
What's to worry it just takes out a loan from the Treasury Dept. and dumps the debt on the backs of the citizens, or the 54% of GDP that is Private Sector.
Seems to me the way to break this debt cycle is to stop home delivery and put a post office in every Walmart to make convenience better than ever.
I would venture they would be so profitable they could actually support themselves and contribute to bringing down the deficit. They would still need their big trucks to deliver to each post office and their aircraft. But 6 days a week to 144 million homes, talk about stupid. we would ADD another 444 million gallons of gas to the market each and every year, not to mention 218,000 vehicles on the road 6 days a week. That might be enough to reduce Global Warming for eternity!
The Senator knows of what he speaks! So far he has been a man of principle who, says what he means and does what he said (promised) he would do! Stop spending, stop the debt, stop borrowing and stop taxing Americans and American businesses until they are in the poor house...just where the progressives want you...dependent upon the government to exist.
The Treasurer is responsibile for finding money to make required payments and eliminating others to meet the crisis initiated by the progressives.
This is Obama's baby! It ain't the GOP'S responsibility. The 2011 budget is their's. Paul Ryan has his "Pathway to Prosperity" to replace Obama's or it will be in place in 2012 for sure!
Speaker Boehner had better listen to "We the People" who gave them the House Majority and the Gavel to him. Use the Gavel Mr. Speaker!
Use your power of the Gavel to hammer some common sense into the heads of House members in both parties that this country is returning to governance of the people, by the people and for the people once again!
Tell ALL of them, in plain language, that ALL future legislation will be within the confines of our Constitution and that ALL passed legislation that is UN-Constitutional, passed by the 111th and 12th Congresses will be removed
Tell them Mr Speaker, that the American citizens all across this great land told you to simply do the work of the people and you and ALL of those who follow your leadership will be reelected!
Instead of an Ammendment would it not be better to hold accountable any representative that increases spending by either taxation or borrowing for every term they serve and insist that the deficit be first and foremost to focus on eliminating or else they lose their job? The only justification for debt by a federal government is to support the military during a war, but obviously that has not been the case for some time. Time to get serious or else we all lose.
Many tea party folks who thought a proposed $100 billion cut in spending for the 2011 budget was too small, feel totally betrayed by the $300+ million pittance that was enacted. Many of us don't have any faith that raising the budget ceiling will result in an enforceable balanced budget amendment after the fact.
What the House needs to do, is to either ensure deep non-severable cuts are included in a bill to raise the debt ceiling, or to simply not pass a bill and let Obama choose what to fund. Rest assured, the latter course will be very unpalatable to conservatives.
