Taking Up the Debt Ceiling War


The tax battle is over. Democrats, President Obama and their media cheerleaders succeeded in getting a nervous and divided Republican Party to acquiesce to a bitter bargain. They allowed taxes to rise, while getting almost nothing in return in terms of spending cuts, other than vague promises to be fulfilled sometime in the future. Given the tenor of the times — with entitlement mentality run amok, our spendthrift president’s reelection in November, and the certainty that anything short of capitulation would have been framed by the media as a Republican-created debacle — perhaps it was the only reasonable course of action Republicans could take right now. In the upcoming and far more serious battle over the debt ceiling, Republicans must unify for the simplest of reasons: either they extract serious spending cuts from Democrats and the Obama administration in exchange for raising the debt ceiling — or the nation is headed for fiscal collapse.

Republicans desperately need to educate Americans about our current trajectory. In the last four years, the national debt has increased by more than $5 trillion, including $2.1 trillion of additional debt accumulated since August 2011, when the debt ceiling was raised from $14.3 trillion to $16.4 trillion. Thus, a mere seventeen months later, America technically went bankrupt again on New Year’s Eve. This means that until further credit is authorized by the House in the form of raising the debt ceiling – again – Treasury Secretary Tim Geithner will have to move money around in federal accounts, a process he claims will buy us about two more months before technical bankruptcy becomes genuine bankruptcy.

Now one might think that our runaway freight train of deficit spending would have chastened our elected representatives. One would be completely and utterly wrong. Despite the great fiscal cliff “victory” being touted by Democrats and their media enablers, the Congressional Budget Office (CBO) revealed that the heart of that victory, raising taxes on wealthy Americans, is little more than emotional boob bait for the masses: as a result of the deal, $3.9 trillion will be added to the national debt over the next ten years, bringing us up to more than $20 trillion.

Unfortunately and incredibly, this is small potatoes compared to America’s unfunded obligations. Christopher Cox, former chairman of the House Republican Policy Committee and the Securities and Exchange Commission, and Bill Archer, former chairman of the House Ways & Means Committee, reveal the true scope of America’s problem in a Wall Street Journal article. “The actual liabilities of the federal government–including Social Security, Medicare, and federal employees’ future retirement benefits–already exceed $86.8 trillion, or 550% of GDP,” they write.

Yet the most important part of the article addresses the reality of taxation. “When the accrued expenses of the government’s entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually…Some public officials and pundits claim we can dig our way out through tax increases on upper-income earners, or even all taxpayers. In reality, that would amount to bailing out the Pacific Ocean with a teaspoon,” they warn (italics added).

In response to this reality, our intrepid president and his party have brought their teaspoons to the battle. Even as the fiscal cliff deal was on the cusp of being made, Obama insisted that the one atom of relative sanity, the spending cuts mandated by sequestration, conveniently kicked down the road for another two months, were a bridge too far. “We’re using an axe instead of a scalpel,” he contended. For perspective’s sake, it should be noted that the total amount of spending scheduled to be “axed,” absent the further whittling that will more than likely occur when the political class inevitably reprises its lament regarding “draconian cuts,” comes to $1 trillion over ten years.

Such unseriousness, courtesy of reckless Democrats and, in some respects, spineless Republicans, is precisely what brought the nation to the brink of insolvency. If one compares the minuscule level of cuts deemed “draconian,” with the gargantuan and growing level of spending that is somehow “manageable,” as long as the “rich” pay their “fair share,” only one logical, if painful, conclusion can be reached:

Despite their past culpability, either Republicans stand firm, take control of the federal spending debate immediately and endure the coordinated and massive attacks that are sure to accompany any effort to bring the nation’s spending addiction under control, or the country will face dire consequences.

Such attacks have already begun. Huffington Post columnist Jason Linkins refers to debt ceiling “hostage takers” who are “dangerous psychopaths, full stop.”  House Democrat Whip Steny Hoyer (D-MD), who must have missed the memo regarding over-the-top language, referred to Republicans seeking to leverage the debt ceiling as “somewhat like taking your child hostage and saying to somebody else, ‘I’m going to shoot my child if you don’t do what I want done.’” Sen. Max Baucus (D-MT) chairman of the Finance Committee, was less incendiary, but equally unrealistic. ”It’s anachronistic,” he said.  “We’ve already voted on spending and revenue, and so the debt ceiling is just a confirmation of what we voted on.”

Baucus is disingenuous at best, and an outright liar at worst. Over the course of the last three and a half years, House Republicans have sent budget proposal after budget proposal to the Democratically-controlled Senate. Every one of them has died without a vote. Despite being required by law to do so, the Senate has not only failed to pass a budget in those same three and a half years, they failed to even draft one in 2011 or 2012. The House also passed a bill in October to avoid the fiscal cliff, and Democrats not only tabled it, but sent out Chuck Schumer to warn Republicans that any attempt to reform the tax code in 2013 would be completely resisted, because the idea is “obsolete.” Democrats have been so irresponsible, even MSNBC’s Joe Scarborough noticed. Senate Democrats are “negligent” and “cynical” because “they don’t want the American people to know what their priorities are,” he contended.

Democrat priorities are painfully obvious. They wish to grow the size and scope of government, and the costs of doing so are irrelevant.

As far as the president is concerned, the Constitution may be irrelevant as well. On New Year’s day, Obama warned Republicans that he intends to raise the debt ceiling unilaterally. “I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills, they have already racked up through the laws they have passed,” he said.

He continued. “Let me repeat, you can’t not pay bills that we have already incurred,” he said. “If Congress refuses to the United States government the ability to pay these bills on-time, the consequences for the entire global economy would be catastrophic–far worse than the impact of a fiscal cliff. People will remember back in 2011, the last time this course of action was threatened, our entire recovery was put at risk. We can’t go down that path again.”

U.S. News and World Report editor-in-chief Mort Zuckerman illuminates the president’s preferred path. “If you constantly live beyond your means by increasing your credit card balance and bank borrowing, eventually your debt rises to a level where all you are doing is paying the interest on your credit cards and loans…This is what is facing the United States. Unless we make changes, by 2055 interest costs will be the only thing that the United States will be able to pay for with available revenues and resources,” he writes.

And that’s assuming we make it that far. Any remaining daylight between now and the ultimate day of reckoning is predicated on the reality that the rest of the world still believes American is not a deadbeat nation. Americans have virtually no clue how fast things can change once investors lose confidence in our ability to get our fiscal act together. In 2012, the interest alone on the current level of debt was almost $360 billion — financed at record-low interest rates. If rates return to their historic norms, those payments could double in a New York minute. Adding more debt would raise them still higher. In other words, America could be facing a future where more than a trillion dollars is spent — on absolutely nothing other than interest. Yet somehow any attempt by Republicans to draw a line in the sand amounts to hostage-taking of children by dangerous psychopaths engaged in anachronistic and obsolete endeavors.

That’s the kind of rhetoric to which Republicans will be subjected in the coming two months. If they have an ounce of integrity left, they will come to realize that taking a rhetorical beating may be difficult to endure. But that is far better than acting as willing accomplices in bankrupting the nation.

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  • Chezwick

    Good luck with that.

    I think the recent election proved that the American people are not interested in facing up to our fiscal problems. Their primary concern is with the short-term….and this friends, is the pronounced failure of democracy.

    I've been a lifelong and passionate proponent of human liberty, but I've finally begun to surmise that there is a reason why historically, the shelf-life of a democracy is around 200 years. When the voting public finally catches on that they can tap into the purse-strings of the treasury in a big way, it's only a matter of time before insolvency occurs and civilizations crumble. Given our own culture of dependency (assiduously cultivated by the Democratic Party) and our impending demographic time-bomb (the first baby-boomers just hit retirement age last year; there will be a tidal wave of retirees over the next 15 years, crashing SS and Medicare),….today's fiscal crises is child's play in comparison to what's coming.

    I despise communism….and I'm not the least bit enamored with today's rulers of China, but at least THEY have the will, the wherewithal, and the institutional mechanisms to plan for the long-term. We in the West have lost that capacity….and it is the failure of Democracy.

    God help us.

    • Mary Sue

      That's because people started forgetting that you don't have a Democracy, you have a Representative Republic.

    • AnOrdinaryMan

      Then the Republicans in Congress have ONE choice–walk out, adjourn. The government will shut down, and the Republicans will recover a measure of self-respect, and will show the nation that, at least THEY are serious about facing fiscal Armageddon.

    • Tom Caldwell

      That is why the Founding Fathers condemned Democracy as unfit for a free people. That is why they went to the trouble of inventing a new system of government, a "system never before in existence, never before even conceived by the mind of man." By definition, a doctrine and system of government in which the governing power is limited by rules of enforceable law, and in which the concentration of power is prevented by a system of checks and balances, to protect the rights of the individual." That is the doctrine of Constitutionalism. In the 1920s and 1930s Russians went to a great deal of effort to promote the idea that the US was a democracy. Then it would be just a battle for power over the collective. The US was a Constitutional Republic, not a Democracy, not a Republic, but a Constitutional Republic. Use it or lose it.

  • ealha3

    Therefore….? We are losing the battle of how to rationally govern a mature democracy because we fail to meet the opposition on the same turf where rhetoric dominates the arsenal of what is necessary to influence a dumbed down citizenry. Other than conservative radio with a highly select audience and Fox News, there is no answer to the hyperbola of those who warn of the suffering caused by government's failure to continue to provide free money. We know of that problem. We know of the failure of our government to govern. What we need in a plan on how to effectively change the paradigm conservatives have succumbed to. The Tea Party seemed a viable solution at one time. There is no dearth of well financed patriots ready to pour in their resources – if they were convinced it could be effective. However, presently, the conservative movement enters the fray with the same failed strategy seemly willing to accept the same results so long as they, personally, don't have to suffer the consquences. We know the problem. We need a strategy to meet and defeat the adversary.

  • http://www.adinakutnicki.com AdinaK

    Patriots are indeed at war with the radical revolutionary left. Besides, one cannot fight a war with kid gloves, one must behave as if everything is at stake – and it is!

    Most importantly, the 'fiscal cliff' is completely tied into gun control, one domino has to fall for the other to succeed – http://adinakutnicki.com/2012/12/27/dhs-americas-

    The danger to the Republic has never been so great. The foxes are inside and outside, more than ready to pounce.

    Adina Kutnicki, Israel – http://adinakutnicki.com/about/

  • Headed4TheHills

    Ah, Dawn Moore, a Spam-monger. Please desist in your febrile attempts to turn us all to Yoga. Take your wares elsewhere, Dawn, and peddle them there. How about a nice Liberal Progressive website? I'm sure the granola-eating Socio-Communist Liberal Progressives would love to here you spin tales of the benefits of Yoga.

  • http://twitter.com/paulvmarks @paulvmarks

    It is much too late for words – even if words are going to be allowed for much longer (for example Fox News is no longer on s radio, Progressives at work).

    95 million Americans CAN NOT pay for 85 million government dependents and employees (and maintain themsleves and their families).

    It is OVER people – there is not going to be any reform, de facto bankruptcy will happen. WAKE UP.

    • mlcblog

      I hate this, but what you are saying smacks of reality. Still, I believe we have to see whether there's a way to fight it. Maybe we can.

  • mlcblog

    Republicans desperately need to educate Americans. This is the key.

    Nicely written article.

  • Reese

    Obama is purposely trying to make us go bankrupt and fail so he can make a deal with his Islamic Supremacist brothers (Saudis…richest people on the planet) to "bail us out" with Islamic Sharia Law Finance Compliant money. The stupid American public will all clamor to get the money and won't even think about the fact that they are signing on to SUBMIT TO ISLAMIC SUPREMACISM and SHARIA LAW in order to get the money. It fits with Bible prophecy. Islam = Antichrist system.

    • objectivefactsmatter

      "Obama is purposely trying to make us go bankrupt and fail so he can make a deal with his Islamic Supremacist brothers (Saudis…richest people on the planet) to "bail us out" with Islamic Sharia Law Finance Compliant money."

      I hadn't thought of that, but it's just crazy enough to be plausible these days. Sharia compliant means a portion of earnings go to jihad.

  • Capt_Z1

    This is what happens when we keep electing a jackass Government. Everyone keeps calling for term limits. We already have term limits. It isd called the ballot box. However a majority of Americans voted for "What is in it for me" instead of what is good for the Majority.

  • Jim_C

    Here's your liberal pal Jim C's $.02:

    Fundamentally, conservatives are right about the big picture: too much spending, not enough money, too much power concentrated in Washington, tax code absurdly labyrinthine, too many laws on the books.

    You guys need to convince the American public that there can be security without Medicare and Social Security (and to a lesser degree, the amount of defense spending). The problem is, we've seen that our investor class is not nearly as brilliant as they want us to think, and that Adam Smith's invisible hand is a myth–people acting in their own self-interest does not necessarily benefit the interest of their nation.

    I read you guys all the time, and it convinces me that an overhaul to the education system in this country is imperative, and democrats aren't going to offer it. The agrarian calendar is meaningless. Not everybody needs a college education, but everyone needs job training. The concept of high school should be revisited. Encouraging entrepreneurship and professional/vocational independence should be a priority. Teacher's salaries should probably be compressed. I think a Republican could deliver this reform and it could very well usher in a renaissance.

  • Jack O'neil

    Pretty funny when the Speaker of the House gets out maneuvered and embarrassed by a guy who could not pass a background check to clean cages at the Washington D.C. Zoo.

  • Jack O'neil

    Now that they've finished further bankrupting the country, they can get onto eviscerating the 2nd Amendment. If Obama was an agent of a foreign enemy would it be possible for him to cause more damage to our nation than he is currently doing?

    • objectivefactsmatter

      "If Obama was an agent of a foreign enemy would it be possible for him to cause more damage to our nation than he is currently doing?"

      Nope.

  • EarlyBird

    The debt ceiling is the last "war" the GOP should fight (why are they approach everything like a "war"?). By yes, "holding hostage" the country over the debt ceiling, they simply risk further degrading America's bond status.

    Neither the right OR left is serious about fixing the debt. The left is allergic to cutting spending, and the right is allergic to cutting Defense spending, AND wants to REDUCE taxes. You know how we know Trickle Down Economics doesnt' work? Because we've been doing it since 1980! It is the siren call of "you can have it all; low taxes and a booming economy."

    No you can't, unless you define "economy" merely by corporate profits. We desperately need some balance to save what's left of the middle class. You worry about "communism"? So do I: so let's save the middle class.

    • objectivefactsmatter

      "The debt ceiling is the last "war" the GOP should fight…"

      Perhaps.

      "By yes, "holding hostage" the country over the debt ceiling, they simply risk further degrading America's bond status."

      No, they risk everything to gain very little. They'll be blamed unless they can ensure the economy recovers in a way that can clearly show they were correct. How is that going to happen with so many lying leftists still around to take credit for any uptick and blame Republicans as they have already?

      Holding hostage over debt ceiling? With rhetoric like that you lose credibility. The hostage holders are those who want to wreck the nation with unprecedented spending and changes to any laws or agreements that don't serve their radical agendas.

      "The left is allergic to cutting spending, and the right is allergic to cutting Defense spending, AND wants to REDUCE taxes."

      Oh my. You see the problem, but you don't see the problem.

      "You know how we know Trickle Down Economics doesnt' work? Because we've been doing it since 1980! It is the siren call of "you can have it all; low taxes and a booming economy.""

      How in the heck could you determine that? By the number of lazy bums you count at anarchist rallies? The problem is NOT "low taxes," it's revenue lower than spending. Increasing tax rates is just as likely to decrease revenue as increasing it. People respond dynamically to taxes and other economic factors. Can you absorb that?

      Balance means bottom line. You must have adequate REVENUE for your spending. Fixating on rates shows a complete lack of knowledge about economics and even basic accounting.

      National security is not a luxury. It's like claiming that having armed guards at a bank is a luxury that must always be reduced, no matter what else. We just never need to discuss it. There may be times when defense budgets could be cut. Now is not one of them. Those moments have not existed during my lifetime. But I will be the first to raise my hand if the world suddenly changes so dramatically. I was raised by leftists, so I know where these ideas come from, and it's not from the real world of facts. It's wishful thinking based on ideas that for the most part were planted by agents of communists.

      Right now we have China, Russia and Islamic terrorists who are employed by OPEC nations. We have a president who thinks shrinking American hegemony will cause all those fine people to love us and turn their guns to farm equipment. That is the most delusional thing I can think of. Even if they wanted to, they couldn't do that for fear of one another and we'll end up being someone's colony under Sharia law or something nearly as bad, and learning to speak Chinese is not that easy for most Westerners.

      "No you can't, unless you define "economy" merely by corporate profits."

      What is that supposed to mean? If your business grows, don't ever incorporate because Noam Chomsky says they are evil by their very existence. Profits come after paying salaries. It's not so bad when businesses make money. They employ people.

      "We desperately need some balance to save what's left of the middle class. You worry about "communism"? So do I: so let's save the middle class."

      Most conservatives are middle class and all of their doctrines support the middle class. They just don't generally rely on deception and fantasy (like attacking rich people to appeal to constituent envy) when trying to raise support for their agendas. Democrats sound more concerned because they promise you pie-in-the-sky and blame conservatives when they fail. It's the worst thing about our 2-party system. Conservatives were honest the whole time and look guilty to the ignorant and disappointed losers, as if they didn't even try to build that square circle we need so badly. Does it move you at all to know the level of deception employed by the Soviets, and the level of penetration they made in to leftist organizations? If their discernment is so bad, why do you trust any of their rhetoric when it's so obvious to most of us how false it is?

      What can I expect from someone who's so convinced that it's all about tax rates and cutting defense spending. Who cares if you now have to pay jizya and or taxes for access to sea routes we once patrolled? Cutting defense spending is a worthy end goal with no possible pitfalls. War is so passe anyway and the USA is the only one that ever starts it. 0'Bama must be right. He is our president after all. We must obey our caliph.

  • EarlyBird

    Raise those taxes that don't hurt economic growth (we boomed when upper income taxes were extraordinarily high), cut Defense, raise the retirement age by a year, tweak Medicare, cut stupid social program but save good ones, cut corporate welfare, get the hell out of Afghanistan and Iraq and Europe while we're at it, and fix the tax code. These are the recommendations of the Bowles Simpson Commission and it makes everyone sacrifice.

    We can't agree over what to eat for lunch. Do you think we could accomplish any of the above while we have this "Obama is an Islamic Devil" psychopathic GOP in town?

  • Elliott Alhadeff

    I was wrong. We do have solutions, as this comment illustrates. What we need is the mechanism to execute them. (We're beginning to focus on solutions for solutions….) How do we revive the influence of the Tea Party? How do we hold accountable our elected representatives? How do we eliminate the destructive influence of unions? How do we enforce Constitutional limitations? How do we … You get the picture. We all know the problems. We need to focus on a discussion of the mechanism to correct them. Representative democracy is not working.

  • WilliamJamesWard

    Tax payer supported income and government gifting provide the monies for the majority of
    Americans to survive with the least effort. No one likes poverty and instead of stimulating
    people to work and be creative the government shoves a free meal in the voters face and
    says there is more where this came from. Unfortunately those tax payers who foot the bill
    are disappearing and the fall is on the way with a result that may make mere poverty
    look good…………………………………….William

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  • melvin polatnick

    Increasing the national debt would be money well spent if it was used to reward young felons that will accept a vasectomy. An incentive of five thousand dollars would be fair and welcome by youngsters with no place to go but down. Millions of young felons who chose to have the vasectomy could use the cash and have no concern with bringing innocent children into their tough world.