Well, plenty. I could list them, but that would take too much time. The next fun little episode we will be encountering in all the news media is the fight to increase the debt ceiling. I won’t get into issues such as why we even have this every-other-year fight over the debt limit. Many see the ceiling as an attempt to bring some common sense to Washington, but that will take a lot more than a debt limit to do that. Some see the debt limit as a lever to beat Congress and the President over the head with until someone realizes that the national credit card is way over spent. We just can’t keep spending more than we make. Oddly, not everyone agrees with that last statement. Many seem to see no problem at all with spending more than we make.
I want to have the debate about balanced budgets. I’m not looking for a simple solution like a balanced budget amendment to the constitution. This is not a simple problem and the solutions won’t be simple either. But I do believe that fiscal conservatism and common sense must rule the day. We can’t go on spending more than we make.
From a government budget perspective, that means balance the budget. Think of it as a scale, the old-fashioned way of weighing things. There is a balanced beam with two little dishes suspended on each side. On one side is government revenue. That’s taxes and what-not — mostly taxes, there isn’t a lot of “what-not.” On the other side is spending. And our government is good at spending. We keep learning new names for unbelievably large amounts of money that the federal government spends on a yearly or decade basis. I think "zillion" will be the next new name.
Some argue to raise one side of the balance by increasing taxes … although they mostly argue for increasing taxes on someone else. The other side clammers to reduce spending, although they all have budget items they don’t want included in the budget chopping.
We’ve gotten used to the spending. Some like a strong military and want to keep on paying more than the rest of the world combined for “defense.” Others focus on social spending and want to keep the welfare checks, the food support checks, the agricultural kickbacks, the government inspectors, the retirement supplemental income, education, the National Parks, the highways and bridges, and all the thousands of other government programs that are eagerly accepted by those receiving them flowing.
I’m no different. I paid into Social Security and Medicare for over 50 years. Better not talk about cutting my checks. Besides, government largess is the primary source of campaign contributions. You don’t think those corporations and individuals are donating to get their guy or gal elected just because they share their political view, do you? No, it’s a giant slush fund. My Congressperson owes me for reelection, and I expect to get paid back. Government contracts or checks in the mail, it’s all the same. If not a direct cash payment, add a nice little loophole in the tax code for me … thanks very much. The politicians claim that campaign donations don’t buy laws … maybe not … maybe they just provide for “access.” You know, if you’re rich (or a corporation), then for a fat fee you can have the politicians ear. Fooey, you own them heart and soul.
So where does that leave us? Will we balance the scale? Will we increase taxes and fees a reasonable amount while cutting spending a reasonable amount and getting the scales back in balance? Don’t bet on it. Or maybe you had better bet on it. I suggest buying some of those lottery tickets. They may be the only logical investment left.
The government is printing money and cashing in T-bills by selling more T-bills. The debate is behind closed doors, using estimates that make no sense, and keeping the general public in the dark … well paid … but in the dark.
I am not in favor of preventing a raise in the debt ceiling. That’s like running up the credit card balance and then refusing to pay because you didn’t really need that 60” television, so now you’re not going to pay for it. No, we need a serious fiscal fix. Adjust the tax rates if that is the answer. Get rid of tax loopholes … and don’t start with the mortgage interest deduction that the general public depends on. If mortgage interest deduction is really a loophole, start by closing the deduction for vacation homes. Get rid of the oil depletion allowance. Nobody understands that anyway. Stop threatening the Social Security retirement age or the cost of living calculations. Get rid of the tax breaks for businesses that are sending all the jobs overseas.
There are things that can be done to get our budget under control. There are no easy answers. Stop negotiating in the press and get busy Congress and just fix the damn thing. I’m waiting … and my doctor says I don’t have a lot of time!
It’s not a moral issue. It is pure economics. We can’t really have our cake and eat it too. The full faith and credit of the United States — on which depends our reputation and, ultimately, our security, prosperity and freedom — is at risk today as never before. In recent years, under presidents and Congresses of both parties, we have racked up yawning deficits and mushrooming debt that now pose a danger to America as we know it.
Without immediate action to control federal spending, deficits will continue to grow as a proportion of gross domestic product, and our accumulated national debt will soon reach world-destabilizing levels. The only question is "when," not "if." It is going to happen. Even today, if interest rates were to rise — as they will when our treasury bills are declared junk bonds — then the entire budget will be consumed on debt service. The only thing saving us today is an interest rate in the 1% range, but history tells us that can't go on forever. Just this week, many members of the FED … don't know what that is? That is part of the problem. … As I said, the FED members are starting to question the continuation of easy money, low interest policies. The belt may be tightening.
Washington can no longer afford to delude itself or the American people about the threat of the looming debt crisis. Our choice is no longer between a (seemingly) painless status quo and painful budget cuts. The status quo is crumbling. It really is.
It turns out that Chicken Little was right. I believe the sky is falling. It will come down in chunks and some have already landed. Greed may be the end of us yet. I hope you’ve all enjoyed the ride because we’re just reaching the top of the roller coaster. The next few years will be up and down and even upside-down. We’re headed for the bottom of the ash pile of history. Our fiscal house of cards is collapsing, and the next crash you hear will be the debt ceiling debate. Don’t expect much light. It’ll be all smoke and mirrors and sound bites. It’s going to be a very bumpy ride.