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Debt-Ceiling Chicken
· Tuesday, July 26, 2011
The big news, as far as the media are concerned, is the political game of debt-ceiling chicken that is being played by Democrats and Republicans in Washington. But, however much the media are focused on what is happening inside the Beltway, there is a whole country outside the Beltway -- and the time is long overdue to start thinking about what is best for the rest of the country, not just for right now but for the long haul.
However the current debt-ceiling crisis turns out, the current economic turmoil in financial markets around the world should cause some serious thoughts about the long run, and about the whole idea of a national debt-ceiling.
Some people may have been shocked when the credit-rating firm Moody's recently suggested that the debt-ceiling law be repealed, in order to avoid fiscal crises which can throw world financial markets into turmoil that can injure countries around the world.
Anyone who wants to show that Moody's is wrong should be prepared to show the actual benefits of the debt-ceiling, not its goals or hopes. That will not be easy, if possible at all.
Too many policies, programs and institutions are judged by what they are supposed to do, rather than by what they actually do and the consequences of their actions. The United Nations, for example, survives as a glorious idea, despite how corrupt, counterproductive and even dangerous its actions are.
The national debt-ceiling law should be judged by what it actually does, not by how good an idea it seems to be. The one thing that the national debt-ceiling has never done is to put a ceiling on the rising national debt. Time and time again, for years on end, the national debt-ceiling has been raised whenever the national debt gets near whatever the current ceiling might be.
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.
Many years ago, someone said, "If you didn't invite me to the big take-off, don't invite me to the crash landing." This was Obama's big spending spree, but "bipartisanship" requires Republicans to either split the bill or be blamed if the government shuts down or defaults.
What would happen if there were no national debt-ceiling law?
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.
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.
There are a lot of things that could be cut, and should be cut, instead of defaulting on the nation's debts. But that is not likely to happen, if Obama and his media chorus can instead blame the Republicans for forcing a government shutdown or a credit default.
Regardless of how the current crisis is resolved, Moody's suggestion of repealing the national debt-ceiling law deserves some very serious thought, because that law is the crucial factor in the political games that allow big spenders to blame others for the consequences of their own irresponsibility.
Those who say that the reckless spending and reckless borrowing of the Obama administration are the roads to ruin are absolutely right.
Too many policies and institutions are judged by what they are supposed to do, rather than by what they actually do.
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CharlieEcho
Another well written and insightful article. I hadn't seen it this way before. I'm still learning and our politicians are still teaching. As well is Mr. Sowell
Posted July 26, 2011 at 11:40:12 AM
wildfire
Sometimes I really could scream. How long has all this been going on? According to Rush Limbaugh, since at least 1967 when the dems said the EXACT same things they are saying now and getting away with it. Republicans have got to be the adults, now!
As Prof. Sowell said, "...judge by what they are supposed to do..." Forget Constitutionality, dems don't care about the Constitution unless they can use it for their own purposes. We must eliminate the Depts. of Labor, Energy, Education, Homeland Security, Health and Human Services, Agriculture, Transportation, and Housing. What do they do except take my money (I live in Texas, a doner state) and give it to someone else. They all do more damage than good and they cost billions. And, the Federal gov't has no right to be involved in any of these things except to analyze and make suggestions.
Posted July 26, 2011 at 11:48:46 AM
Richard Ryan
Dr Sowell has said it very well indeed.
Wildfire has echoed my thoughts to a T.
There isn`t really anything for me to add.
Richard Ryan
Lamar,Missouri - Birthplace of Harry S Truman
Posted July 26, 2011 at 12:22:55 PM
Montana Dave
Another insightful column by Thomas Sowell. He and Walter Williams are always good to hear from. I agree with Wildfire,
Those institutions are expensive, harmful and not needed.
Posted July 26, 2011 at 12:39:25 PM
pete
Republicans have put a number of plans on the table. If democrats and the WH are unwilling to discuss, or in obama's case - not veto, anything that comes out of those plans, it's time for Republicans to pull a MN democrat ploy of boycotting the capitol.
If they aren't there, they have no responsibility for what comes out, and their absence de-ligitimizes the results thereby making obama and democrats the sole owners.
It's already been approved of by unions and democrats all over the country, and adjudicated MN to be an acceptable action.
Posted July 26, 2011 at 12:51:26 PM
M Rick Timms, MD
All good points. My only concern is that it always seems that the left and their media will blame the Republicans for the spending-- They will blame Reagan for spending - but ignore that it was the Democrat Congress that outspent the Reagan Revenue surge from tax rate reductions. Conversely, in those few instances that the Republicans have had a chance to control the Budget process, they are bludgeoned into compromise by a Tax and Spend Democrat President. So while I can not disagree with Dr Sowell, I have no expectation that the Dems will be held responsible.
And pete -- I agree that Reid's refusal to even allow discussion of the House Cut,Cap, and balance proposal is typical of the Democrat heavy handed tactics to deny the American people the governmental process that the Constitution call for. They have manipulated the rules to make their own law. They did it on ObamaCare and they are never called out by the media . No discussion - no debate -- and all we get are the back-room deals.
Posted July 26, 2011 at 1:45:10 PM
JAC
Mr. Sowell is correct, as usual. All you have to do is watch one of Obozo's press conferences in the past week and then listen to the mostly uninformed public comments. Blame has already been shifted to the Republicans and reported ad nauseum by the MSM. All that remains now is the formal hanging. Grandpa and Grandma are being thrown over the cliff by the evil right and their lack of a plan. What B.S.! The setup is complete and November 2012 is just a formality to the end of the country as we know it.
Posted July 26, 2011 at 1:58:34 PM
Merry Colin
I am reminded of the golden rule...
He who has the gold makes the rules.
I couldn't care less what Moody's does. It's about time that those with the gold and/or say so related to it just buzz off. We the People must make the rules! Maybe what we really need is a default, although I doubt that would happen. Then, just for once, we could start over without gubmint bearing down on us like it did with the worthless TARP and other assorted BS programs. WE can fix it---DC cannot.
Posted July 26, 2011 at 1:59:49 PM
immaccon
The Debt Ceiling: What I Wish the Republicans Would Say
By now you are probably all sick of the debate going on in Washington DC about raising the debt ceiling. Like with everything else, politicians are spending far too much time talking and far too little time actually doing and, when they do something, it is usually misguided and more damaging than the problem that it was supposed to fix. This is certainly true of the debate about raising the nation’s debt ceiling.
The president would have you believe that if we don’t raise the debt ceiling and allow the nation to borrow even more money and go even further into debt, that the consequences will be dire. However, this is not the case. As a matter of fact, the debate we should be having is not when to raise the debt ceiling and by how much, but IF we should raise the debt ceiling and whether we should actually lower it, not raise it. Because the debt ceiling is not the real issue for the nation; the real issue is fiscal discipline. Are we going to keep expanding the federal government, borrowing more money from foreign nations, heaping debt upon debt onto our children and our children’s children, or are we going to finally realize what every American family knows: you can’t keep spending more than you take in.
http://bit.ly/rhp2py
Posted July 26, 2011 at 2:38:31 PM
GMButler
Osama Hussein Obama was hand selected by the International Banking Elite to destroy the economy of the United States and he is playing his "string-puppet" part perfectly. When the USD is finally finished as the world currency, the International Banking Cartel can replace it with their new currency. Are you ready for it?
Posted July 26, 2011 at 4:13:38 PM
MNIce
The debt ceiling is like a stop sign that "everybody" habitually blows through without a second thought. It should generate serious consideration as to whether it is safe to proceed down the road, but seldom does.
But this time (gasp!), thanks to the Republicans in the House of Representatives, the long-unused brakes are being put to the test. So for once the debt ceiling is serving its intended purpose.
Unfortunately, it seems the brakes are a bit too rusty to function properly. The House Republicans perhaps should make plans to put the government in the ditch rather than let Mr. Obama drive it over the cliff. I suggest they simply let appropriations for a number of unneeded government agencies expire without renewal if Mr. Obama and the Senate do not get serious about cutting spending. (And then they should be prepared to remind Mr. Obama that spending money without it first being properly appropriated for the purpose is an impeachable offense.)
This talk of defaulting on the debt if we don't borrow more is some of the smelliest bull manure ever to come from the White House. There would be no danger of default if Mr. Obama would arrange with Congress to cancel agency appropriations to make sure the debt is covered.
Posted July 26, 2011 at 4:46:32 PM
Tom Pessa
Perhaps there is a lesser accepted piece of reality that we all need to be reminded. It was irresponsible spending that put us at the debt ceiling in the first place. Only a reversal in that spending will prevent us from having to increase it. More debt may soothe the delirium tremens that might result from spending withdrawal, but it's time to get this monkey off our backs. Permanently!
Posted July 27, 2011 at 12:11:33 PM
Raymond
I feel the overall problem is that Americans fail to effectively use the one weapon they have to curb the excesses of professional power-grabbers known as politicians: the vote.
It's obvious how power-mongers use taxpayer dollars to bribe certain sections of the electorate. The democrats have done a brilliant job of tacking together a patchwork constituency of victims, all of whom have been treated "unfairly." Thus has the vote become a tool in the bag of magic tricks of our emergent class of political elites.
Politicians laugh at the silly beliefs of the electorate that the "vote" somehow constrains them.
They know full well that the voter is just another tool for them to manipulate. Promise them and then revert to business as usual.
The key to restoring popular control over the elite remains, however, that politicians, that assortment of nest-featherers and four-flushers can, indeed, be removed from office. The vote is the single mechanism standing between them and direct tyranny (of people who admit the temptation to do things "unilaterally"---I refer to the desire of La Raza that their "president" should use his power to DECLARE immigration "reform" regardless of the will of Congress or the people.)
We voters need to put the fear of God into these clunks by KICKING THEM ALL OUT! Next election, vote against the incumbent, no matter the party---pick the next best on the list. Let them know that we refuse to be further manipulated, and that the power of the vote can grow teeth. :)
Posted July 27, 2011 at 1:52:52 PM
Ben Johnson
I'm going crazy with all of this talk about **reducing** the deficit. Where is talk about ending the deficit completely?
The house needs to stand up and say that there will be NO MORE deficit, and that every future budget will result in a surplus. This is how I run my own finances, and surprise surprise... It works.
Posted July 27, 2011 at 8:40:39 PM
Mike
Sowell/Williams 2012.
Posted July 28, 2011 at 10:01:40 AM
Immaccon
The Debt Ceiling: What I Wish the Republicans Would Say
By now you are probably all sick of the debate going on in Washington DC about raising the debt ceiling. Like with everything else, politicians are spending far too much time talking and far too little time actually doing and, when they do something, it is usually misguided and more damaging than the problem that it was supposed to fix. This is certainly true of the debate about raising the nation’s debt ceiling.
The president would have you believe that if we don’t raise the debt ceiling and allow the nation to borrow even more money and go even further into debt, that the consequences will be dire. However, this is not the case. As a matter of fact, the debate we should be having is not when to raise the debt ceiling and by how much, but IF we should raise the debt ceiling and whether we should actually lower it, not raise it. Because the debt ceiling is not the real issue for the nation; the real issue is fiscal discipline. Are we going to keep expanding the federal government, borrowing more money from foreign nations, heaping debt upon debt onto our children and our children’s children, or are we going to finally realize what every American family knows: you can’t keep spending more than you take in.
More at: http://bit.ly/rhp2py
Posted July 29, 2011 at 11:35:34 AM
Jan Callow
Where were the Republicans concern when the debt was rising under Bush! He raised the Debt ceiling himself but not one of you objected then,Bush left this country in the worst fiscal situation since the great depression and you have the gall to blame Obama? Get real, stop playing political games and grow up!Raise the Debt Ceiling.
Posted July 30, 2011 at 12:48:22 PM
Frank E.
07/30/11
BARACK OBOZO is really consistent,tue FIRST THREE
YEARS of his term in office,OBOZO blamed all his
PROBLEMS on good ol'"GEORGE".NOW the REPUBLICANS
proper are going to CATCH OHOLY,For his screw-ups
his final ONE TERM.I THINK OBOZO HAS SURPASSED
THE PEANUT FARMER?
Posted July 30, 2011 at 9:21:27 PM