23 May Sealing the Ceiling
Our country already is weighed down by a mountainous $31.4 trillion in debt, and we have more bills coming due every day. By the end of next week, we will not have the cash to continue paying everyone. At that time, the United States will have two choices: (1) stop making timely payments to lenders and others we have paid regularly in the past; or (2) borrow more money to continue paying everyone fully and on time.
One little problem is that $31.4T is our statutory “debt limit,” meaning, by law, America absolutely cannot borrow any more unless Congress passes a new bill to raise that level. The federal government has spent every nickel in its pockets, and juggled its bills as long as possible.
What Should We Do?
If an irresponsible family member ran up a big debt on your credit card, you probably would help pay it off (if you could), but then you would discontinue or limit their future access to the credit card. That is what America should do right now.
First, America must continue to make timely and full payment on the bonds issued to borrow the $31.4 trillion. Even if other bills get pushed back, the President absolutely and constitutionally must protect our good faith and credit by prioritizing our loan payments. Although not mentioned often, this actually can be done with or without an increased debt ceiling, as America’s monthly revenues are ten times higher than our current bond obligations. It would just require some rearranging of where those revenues are spent.
A second step is equally crucial, however. America should raise the future debt limit only to the extent necessary to meet our previous commitments, coupling that increase with future budgetary constraints to stop the rapid accrual of additional liabilities. We need to seal the deficit by managing spending and reducing tax breaks for special interests. This will mean Congress saying “no” to constituents when it is in the country’s long-term best interests to do so.
As with all issues, the national debt is a topic to which Principle Based Politics believes America’s leaders should apply fundamental principles. Applicable here are the principles of limited government, protecting the vulnerable, freedom and free enterprise, transparency, integrity, dignity, and respect.
Instead of applying these principles, our federal politicians, as they are prone to do, are playing political chicken and focusing mostly on trying to get the debt crisis blamed on their opposing political party.
Raising taxes on big corporations and “the rich” is President Biden’s currently chosen method to (somewhat) limit future deficits. Cutting expenses is the method upon which the Republican-controlled House of Representatives insists.
Negotiations are ongoing, with all participants and commentators expressing urgency.
No Need to Lay Blame
Congress first instituted a debt ceiling in 1917, and it was set at $500 billion. By the year 2000—some 83 years later—the debt ceiling still was only $6 trillion. Now, after 12 years of recent Republican presidents and another 10-plus years with Democrats in the White House this century, we have reached the $31.4T ceiling. Worse yet, America is on pace to add another $20 trillion in the next decade unless we change course. By 2052, interest on the national debt will eat up over half of our national budget.
There is no question who is responsible for the current predicament. We all are. Both parties are. All members of Congress—past and present—are guilty. As for our most recent Presidents, the national debt rose $8 trillion while President Trump was in the White House. President Biden’s plan, even with his proposed tax increases, projects $17 trillion in additional debt over the next ten years. Everyone is responsible.
The main thing American voters want now is for this problem to be fixed. In a recent poll, 76 percent said deficit reduction should be one of Congress’ top three priorities.
Edmund Burke defined human society as “a partnership not only between those who are living, but between those who are alive, those who are dead, and those who have yet to be born.” Using Burke’s definition, are we acting today as responsible partners for human society? No, not if the United States continues to spend so much borrowed money.
Written by Quentin R. Wittrock, founder of Principle Based Politics.
Look for his posts each week, as this blog will explore and promote the idea of principle in politics, both as to individual elected leaders and our federal government as an institution.