How Things Work:Debt Ceiling Edition

Maybe if it was platinum…

The next big fight between the House of Representatives and the Senate-White-House-Media-&-Low-Information-Voter-Entitlement-Complex (aka the SWHMLIVEC) will be over the debt ceiling.

The tack that the SWHMLIVEC will take is that the debt ceiling and spending have nothing to do with each other. That will be followed, in true Alinsky fashion, by an insult, laugh, guffaw, chortle, or snort.

Au contraire, mon frère. They are are linked, and one should not be fooled by the left that a ‘clean’ debt ceiling hike is desirable in the same way that folks were fooled that a ‘balanced approach’ is what President Obama says it is, or $41 in tax hikes for every $1 in so-called spending cuts. Dr. J. is still convinced that it is $41 to $0, but that’s neither here nor there.

What is the debt ceiling? The debt ceiling, as many of our readers know, is the most debt our congress is willing to incur.

What they do is they set a limit above which they say they do not want to go. They then spend more money than they take in until they hit that limit. Once they do they vote to increase it and deficit spend some more.

So, if you don’t spend more money than you take in, then you won’t need a debt ceiling, because your debt won’t keep going up.

Here is the problem. For every $1 in revenue entering the treasury, we spend $1.85. Servicing the debt, Medicare, Medicaid, Social Security and other mandatory spending use $0.97 of the $1 taken in. We have $0.03 to spend on defense and discretionary spending before borrowing an additional $0.85.

So as long as we spend $1.85 for every $1 we take in, (and the rate of borrowing has accelerated under Obama as he took the TARP/Stimulus one time bolus and transformed it into the new normal), and possibly accelerate that, we will continue to hit ‘debt ceilings’ faster and faster and faster.

What does Obama want? Carte Blanche for the next 4 years.

What do conservatives want? To cut spending down such that eventually we can spend $1 for every $1 we take in and begin to pay down the debt. A large amount of paying down the debt, conservatives hope will be by outgrowing it as it is serviced. Perhaps surpluses can pay part of it down, but were far from there.

Why?

Servicing debt in itself is expensive. We can’t go back to King Dollar until we reduce our debt.Interest rates are artificially low, as if we let them go up, we either have to borrow more or spend less on things other than servicing debt. As our debt increases, by mass effect, servicing the debt will take a bigger and bigger bite out of our budget.

This is no different than opening more and more credit cards because your expenses outstrip your income. Eventually your minimum payment will also outstrip your income.

Furthermore, entitlement spending is going up as the Baby Boomers age sans a replacement population in the workforce. So that is taking up a bigger and bigger part of the budget.

So yes, spending and the debt ceiling are inexorably linked because the more deficit spending that occurs, the faster the debt limit gets hit. Now what can you do about it?

Well not mint several 20,000 ton platinum coins worth $1T. That is the dumbest idea that Dr. J. has ever heard. HAHAHAHAHAHAHAHAHAHAHA!!!!!!!!!!!!!!!! That is so stupid Paul, Timmy and Barack! HAHAHAHAHAHAHAHAHA!!!!!!! Really?!?!? HAHAHAHAHAHA!!!!!

(Dr. J. trying to play at Alinsky…)

Play hardball.

If the debt limit is hit, we cannot spend. We thus default and bad things happen.

What needs to happen is a deal where the debt limit is raised to 95% of our current expenses for, say, one year, or two max (one Congress).

Second, at has to be linked to a budget that is 95% of current spending levels. Discretionary spending should be slashed. The budget has to go kosher, no exceptions. Entitlement operating costs must be slashed to offset the equivalent, if possible, of 5% of those outlays. Even defense has to take a 5% hit if just to shut the lefties up. The other Gormogons might not agree with it, as it is the Federal Government’s primary enumerated role, but Dr. J. believes we need to spend smart regarding defense.

Furthermore in the same legislation entitlements must be addressed in the same bill in a way that keeps promises to those over 55, but via future changes, makes those programs stable, if not irrelevant.

The key is for the House to say THE PRESIDENT LIKES A BALANCED APPROACH TO THINGS. A BALANCED APPROACH IS NECESSARY. WE NEED TO CUT SPENDING AS WE RAISE THE DEBT LIMIT. WE HAVE TO CONTROL SPENDING. THIS IS A BALANCED WAY TO DO IT. Say it over and over to anyone with a microphone anytime they ask you a question, even if it is about the color of the sky or last night’s Bama game.

Then, do more of the same each time that limit comes a calling, or until adults are elected to Congress and the Senate that will pass a budget. We have a long-term problem that is being addressed by short-term focused politicians. We will get nowhere until that changes.

About Dr. J.

Dr. J. was born the son of a New Atlantean sharecropper who cornered the market on notoriously delicious seaweed Himanthalia elongata (popularly known as Thongweed). With his newly minted seaweed fortune, Mr. J. the Elder sent his son to attend the Academy of Sorcery, Alchemy and Surgery where the good doctor apprenticed with the finest sorcerer surgeons in New Atlantis.Dr. J.'s areas of expertise grew to include bleeding, cutting for stone, trephination, medical divination with outstanding spatial and temporal resolution, cybernetic sorcery and medicinal alchemy. When King Orin of Atlantis fell ill with the Ick, Dr. J. stepped in with an elixir he devised from a combination of minerals, herbs and saps. Curing the king, Dr. J. gained significant notoriety which afforded him the luxury of time to devote himself to his side hobbies which include porpoise racing, the study of supply-side economics, cooking and raising his lovely merchildren alongside his lovely bride the archconservative Mrs. Dr. J.

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