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July 29, 2011

Who’s to Blame for The Debt Ceiling Mess?

The debt ceiling controversy was caused by either cynicism or incompetence. Does either option inspire you to trust DC to spend more money than it has?

First, the facts:

  • In February, 2010, the Democratic-controlled Congress raised the debt ceiling to a level expected to be reached in the Spring or Summer of 2011
  • When they lost the November elections, largely due to the anti-spending Tea Party, it was clear they would lose the power to raise the debt ceiling again
  • They had the entire lame-duck session to raise the debt ceiling until 2013 or longer, or abolish it altogether
  • They did not

Every large organization employs analysts to think down the road. For instance, when NFL teams sign players to long-term contracts, they account not only for salary cap implications of the current season, but also for future seasons.

Wasn’t there ONE Democratic consultant thinking down the road? Wasn’t there anyone smart enough to alert President Obama, Senate Majority Leader Reid, and House Speaker Pelosi them that they’d lose leverage on the debt issue?

And why aren’t Republican leaders calling the Democrats on this? Why aren’t they saying that if Democrats really thought it was important to raise the debt ceiling further, they could have done so when they had the chance? Why are Republicans actually allowing themselves to be blamed for this mess?

If both sides are really this incompetent, that is all the more reason to deny them the power to tax your children by raising the debt ceiling. Not only are they incompetent legislators, they are incompetent politicians.

And America may face an even darker future if they’re really NOT that incompetent, only cynical.

Thomas Sowell believes in the second possibility. In his July 26 column he writes . . .

Regardless of what it is supposed to do, what the national debt-ceiling actually does is enable any administration to get all the political benefits of runaway spending for the benefit of their favorite constituencies — and then invite the opposition party to share the blame, by either raising the national debt ceiling, or by voting for unpopular cutbacks in spending or increases in taxes.

The Obama administration is a classic example. When all its skyrocketing spending bills were being rushed through Congress without even being read, the Democrats had such overwhelming majorities in both the Senate and the House of Representatives that Republicans had all they could do to get a word in edgewise — even though their words had no chance of stopping, or even slowing down, the spending of trillions of dollars.

Now that the bill is coming due for all that spending and borrowing, Republicans are suddenly being invited in to share the blame for either raising the national debt ceiling or for whatever other unpopular measures will be legislated.

Why do Republicans play along? Frankly, because they don’t want a balanced budget either. They want to continue to spend your money on their preferred clients — just as Democrats do. That’s why the various plans from both sides merely want to slow the “rate of increase” of government spending over the next ten years, hoping that the economy improves and tax revenues catch up. Few want to make actual spending CUTS.

Sowell’s good insights actually lead him to a false and dangerous conclusion. He thinks the solution to these partisan games is to abolish the debt ceiling altogether:

“Those who got the political benefits from handing out trillions of dollars of the taxpayers’ money (plus borrowed money) would also get the clear and sole blame for the resulting skyrocketing national debt and all the unpopular consequences.”

Perhaps Sowell is too concerned with who gets blamed, rather than the golden opportunity right before us. For he agrees that,

“Those people who want serious and substantial spending cuts are absolutely right in what they want. There are not only government programs that need to be cut but whole government agencies, including Cabinet-level Departments, that are not merely useless but positively harmful on net balance.”, on the other hand, thinks Sowell is wrong on strategy. They believe that…

  • We should use the debt ceiling to our advantage.
  • NOW is the time to cut harmful government programs, agencies, and Departments.
  • Congress should be put on a diet where they can spend no more than what they take in.
  • It’s wrong to kick the problem down the road with further increases in the debt ceiling
  • We shouldn’t make the problem permanently insurmountable by repealing the debt ceiling law.

Instead . . . advocates telling Congress to say NO to any debt limit increase, EVER — to “Cap the Debt!” This would mean a balanced budget immediately. And it would mean that we’d have to cut many of the programs to which Sowell referred.

The debt ceiling represents a strategic opportunity of long-term importance. Doesn’t that matter more than the short-term political gamesmanship?


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