Tuesday, July 19, 2011
Sticking It To The Grandkids
Thanks to cable TV, talk radio and the Internet, the facts are well known:
First, while the exact amounts vary from month to month, the government brings in, on average, about $200 billion a month from (mostly unwilling) taxpayers and pays out, on average, about $20 billion in monthly interest charges. That’s a tenfold coverage.
Second, Social Security and Medicare, at least right now, are easily covered by government revenues each month. There’s no nice way to say it: Barack Obama has been blatantly lying about Social Security and Medicare payments being in jeopardy, as has the rest of the Democratic leadership.
Third, there would also be enough money available to meet our current military obligations (though we need a good debate about how much military we really need in order to defend our country).
Fourth, everything that’s left (about 30 percent of scheduled expenditures) can be prioritized, with the only question being who should make the decisions as to what goes at the top of the list and what goes at the bottom. Not doable, says Turbo Tax whiz Timothy Geithner. Turbo Tim insists that prioritizing government payments won’t work because it would “spur deep cuts in other disbursements and still cause investors to shun U.S. Treasury securities.”
No question about it, it definitely would cause deep cuts in other disbursements, but that’s a good thing. It’s a forced solution to government’s spending addiction. And the notion that cutting spending would cause investors to stop buying U.S. Treasuries is questionable, at best. On the contrary, the rest of the civilized world has made it clear that it is gravely concerned about rapidly increasing U.S. spending and debt.
Continued out-of-control spending is far more likely to cause investors to pull their money out of U.S. Treasuries than a fantasy default. Geithner, who was wrong on the Troubled Asset Relief Program (even though TARP was his predecessor’s creation), wrong on the “stimulus,” and wrong on his own taxes, said: “Ultimately, the notion of ‘prioritizing’ payments is futile because the debt limit must be increased regardless of which spending path is adopted. There is no credible budget plan under which a debt-limit increase can be avoided.”
Wrong again, Timmy. There most certainly is a creditable budget plan to avoid raising the debt ceiling. It’s called: Cut spending. That’s right, just cut spending enough, and you don’t have to raise the debt ceiling one dime.
And once that’s accomplished, a new House, Senate and President in 2013 could start making serious cuts in the budget, with the litmus test being whether a given program or expenditure is constitutional. Such a litmus test would make it possible to dramatically reduce taxes, borrowing and fiat-money creation.
Geithner warns that because the United States now borrows about 40 cents of every dollar it spends, prioritizing payments without raising the debt ceiling would force the U.S. to cut 40 percent of all government expenditures. Darn. And here I was hoping to see spending cuts more in the area of 80 percent of current expenditures.
Finally, Geithner got to the heart of America’s impending financial doom when he said that such spending cuts “would have painful implications for people in every walk of American life.” He included military families, veterans and government employees — all commonly referred to by politicians as voters.
The military families and veterans obligations can be whittled down over a period of time by closing most of our 700 overseas military bases and staying out of nation-building wars. For a fraction of current costs, we can bring our troops home and have them focus on defending our own porous borders rather than bombing, then rebuilding, countries on the other side of the globe that have no interest in establishing a democratic form of government.
As to government employees, do you know anyone who would be unhappy with getting rid of as many “public servants” as possible?
Those who insist that not paying for programs and employees already on the books is just as much of a default as not paying interest on the national debt are, in effect, saying: “Even though we have to go deeper into debt to pay for these government programs, which assures that default is only a matter of time, we have no choice because we’ve already made those commitments to people.” What great logic.
Sorry, but if Congress passes unConstitutional legislation to implement unConstitutional programs, it is not your obligation to pay for them. On the contrary, it is Congress’s duty to repeal all such legislation, because, first and foremost, members of Congress made a commitment that trumps all other commitments — the commitment to uphold the Constitution! I’m feeling a bit lonely wondering about how many other people even care about this little inconvenient truth.
But let’s get real here and face reality. The U.S. will ultimately default on its debt obligations regardless of what deal Congress strikes. Every halfway honest person with an IQ below 32 knows that. All Democrats and most Republicans are doing is playing politics in an effort to prolong the inevitable so our children and grandchildren will be left holding the bag of hyper-inflated currency when the U.S. does finally default on its debt. Lots of luck, kids.
Our problem is not how to deal with the debt ceiling. It’s much bigger than that. Our real, underlying problem is that we have lost our moral compass.