By Mark Gibson: Once again, the United States of America is hovering on the brink of fiscal irresponsibility as Congress struggles to find the votes to raise the debt ceiling and pay its bills.
Already, the treasury department says it is postponing a two-year debt auction scheduled for this week because of concerns that it will not be able to complete the auction if Congress refuses to raise the current limit.
There are no winners in this game of budgetary “chicken,” nor does the debt limit have anything to do with the nation’s short or long term budget.
Congress has already committed to the expenditures now coming due and has no real choice but to pay its bills.
As Washington is barreling toward a deadline to raise the government’s borrowing cap (Nov. 4) and avert a first-ever default on U.S. payments, there’s no sign yet on Capitol Hill of a viable solution.
Instead, the Republican-controlled House is moving ahead on Tea Party-blessed legislation related to the debt limit that has no chance of making it through the Senate, much less of being signed by President Barack Obama, according to reports from the Associated Press.
“There is no margin for error,” Treasury Secretary Jacob Lew said Wednesday at a conference sponsored by the Center for American Progress. “After Nov. 3, we cannot borrow any more money. We will be operating on a cash basis. Some days we will have enough cash to pay our bills. Other days we won’t. Going past Nov. 3 is irresponsible.”
Without a raise in the limit, the U.S. would be unable pay its bills for veterans, Social Security recipients, federal employees and others.
Throwing the economy into financial turmoil by failing to raise the debt limit is a poor solution to the national debt, and would almost certainly compound the problem.
Not to say the national debt isn’t an issue.
According to documents posted June 16 by the Congressional Budget Office, which provides “nonpartisan analysis for the U.S. Congress,” the long-term outlook for the federal budget has “worsened dramatically over the past several years, in the wake of the 2007–2009 recession and slow recovery.
Between 2008 and 2012, financial turmoil and a severe drop in economic activity, combined with various policies implemented in response to those conditions, sharply reduced federal revenues and increased spending.”
Whether that “increased spending” is because of Obama’s leadership or because decades of war are an expensive undertaking is a matter of perspective. The biggest drivers seem to be Social Security and Medicare, once self-sustaining but now on life support, and the wars in the Middle East.
The national debt isn’t a Republican problem (assuming they don’t grandstand on the debt limit and create a lot of chaos) or a Democrat problem: We’ve been ruled by majorities of each, and neither effectively addressed the long-term Social Security problem.
The solution will not be a Democrat or Republican one, either: In my view, neither platform alone offers a solution.
Which means they will have to work with each other.
Given the current political climate, I’m not holding my breath.
By RaeLynn Ricarte: If the U.S. national debt was laid out in $1 bills, the line would stretch from Earth past Uranus, which is about 1.59 billion miles away.
Bringing the issue closer to home: A person who earns $40,000 per year would have to work 25 million years to make $1 trillion — and our national debt is now a whopping $18.4 trillion.
Start talking about the fact that America now borrows 40 cents out of every $1 it spends and people around you start to become queasy.
Some will end the conversation and others will dismiss the fact that the U.S. debt now exceeds the value of everything produced and sold in the country.
It’s much nicer to think that, because the entire world seems to be having financial problems, the debt will end up being forgiven instead of having creditors, such as China and Japan (the two foreign countries that hold most of our debt) come calling.
Even worse, there is the specter of Congress dipping further into our pockets for a “debt surcharge.”
Our debt places us at risk for a huge fluctuation in interest rates and price inflation that will bring economic stagnation.
While it would be irresponsible for GOP leaders to not pay the nation’s bills and raise the debt ceiling — again — this situation is not sustainable. I applaud the efforts of Republicans who are demanding that the ceiling not be raised without spending reforms.
After all, 40 of 50 states have some form of balanced budget requirement while the federal government has been spending more than it takes in for three decades.
The best way to reduce spending is for Congressional leaders and the president to review the limitations on taxing and spending imposed by the U.S. Constitution (before it was twisted into a “living document).”
Our federal leaders need to revisit the authority of the central government to collect taxes and what items they are authorized to spend that revenue on.
The current unlawful spending and regulation is in violation of the oaths that elected officials took to “support and defend” the constitution and has created a national security crisis.
How can the U.S. be a sovereign nation when it owes huge sums of money to foreign countries?
Tim Geithner, former treasury secretary, said several years ago that the U.S. was issuing 80 million checks a month to Americans who depended on that income or financial aid. I have no idea how much that number has risen but 49 percent of citizens now receive some type of government benefits.
Where in the Constitution does the central government have the authority to tax, borrow and distribute that many checks a month?
Thomas Jefferson warned: “We must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude.”
America has saddled its children with the greatest debt burden in the history of the world. Every infant who clears the womb now owes $57,214 for his or her share of the citizen debt.
I believe a tremendous amount of economic pain and hardship is coming if we don’t turn this thing around — soon.