‘Puter’s been reading Greg Sargent, a confessed liberal, who writes for the Washington Post’s opinion pages. Mr. Sargent is exercised about Republicans holding up a debt limit increase
This morning, Mr. Sargent writes:
It remains to be seen whether major commentators and news orgs will clearly and forthrightly reckon with — and convey to readers — how insane the GOP position here really is. I laid out the reasons for this yesterday, but the short version is that Democrats are not asking Republicans to give up anything in requesting that they support a debt limit hike. They are not asking Republicans to agree to more spending. They are not asking for new taxes. They are simply asking Republicans to join them in making it possible for Congress to pay obligations it has already incurred, and in so doing, avert economic catastrophe for the whole country. There is no rationale for giving Republicans anything in return for this.
Now as most of our readers know, ‘Puter’s not a smart man. He’s more of an idiot savant, like the blind, autistic, cerebral palsy affected man who can’t interact with humans but can play the piano like Van Cliburn on steroids. ‘Puter’s one special talent is the law, and more specifically, the intersection of law and finance. ‘Puter read Mr. Sargent’s column, then re-read it, then read it a third time because ‘Puter just couldn’t believe what Mr. Sargent wrote.
Much of Mr. Sargent’s column just isn’t borne out by facts or reality. And since our liberal betters have set the standard of “you’re entitled to your own opinion, but not your own facts,” let’s use it in examining Mr. Sargent’s allegations.
Democrats are not asking Republicans to give up anything in requesting that they support a debt limit hike. They are not asking Republicans to agree to more spending.
Mr. Sargent is flat out wrong. Mr. Sargent may or may not be lying to advance Democrat talking points dictated by the Obama White House, but that’s irrelevant to this discussion.
Any increase in the debt limit is effectively an increase in spending. The United States currently borrows 40 cents of every dollar it spends on current year expenditures. This is the equivalent of making $60,000 annually, but spending $100,000 annually, rolling everything onto your credit card and making minimum payments each month.
The United States government will borrow and immediately spend as much money as it can. The only limit on government spending is the debt limit. The debt limit requires Congress (and the nation) to examine how much money it spends and how it finances its spending. An honest government wouldn’t borrow money except for big ticket items, like buying Alaska, building an interstate highway system or rebuilding the nation’s power infrastructure. Our government borrows to pay ObamaCare navigators and to fund cowboy poetry contests in Nevada.
If the debt limit is increased, our government will spend all that money, then come back begging for more, claiming it’s for the children or some such hokum.
They are simply asking Republicans to join them in making it possible for Congress to pay obligations it has already incurred, and in so doing, avert economic catastrophe for the whole country.
Again, Mr. Sargent is flat out wrong.
Unfortunately for Mr. Sargent, there is currently neither a budget (thanks to Senate Democrats) nor is there a continuing resolution (hence, the defund ObamaCare/Ted Cruz lollapalooza). The United States, as of 30 September 2013, ends its fiscal year. Coterminously, the currently effective continuing resolution expires. Therefore, on 1 October 2013, the federal government has no obligations except to repay its debt as it comes due.
Secretary of the Treasury Jack Lew announced earlier this week that the United States’ debt limit would be hit on or about 17 October 2013.
It is therefore impossible for a debt limit showdown to concern “obligations [Congress] has already incurred,” unless Mr. Sargent refers only to the repayment of currently issued and outstanding Treasury obligations (e.g., bonds, notes, etc.).
‘Puter’s being a bit cute with Mr. Sargent here, as ‘Puter is well aware of what Mr. Sargent actually means. Mr. Sargent means that Congress through the years have passed many, many laws, most of which have cost far, far more than Congress ever projected they would. Mr. Sargent argues that because such laws are on the books, Congress is therefore obligated to fully fund the implementation of such laws through debt financing.
Congress is under no obligation to fund operations through debt financing, none whatsoever. Under normal circumstances, Congress can (and should) fully fund annual operations solely from tax revenues, adjusting tax rates to ensure sufficient income is generated to meet its needs. America is not in extraordinary circumstances. America has simply chosen to pretend government doesn’t cost as much as it does. And Congress’ preferred method of wishing away America’s overspending is to hide it from the public by issuing debt.
It’s either issue debt to hide government true cost from Americans or raise taxes to cover government’s overspending, which Congress will never do. ‘Puter supposes Congress could go back and adjust or repeal laws causing America’s expenses to exceed its revenues, but that’s even less likely than Congress hiking taxes to cover its overspending.
But back to the debt limit. As the Government Accountability Office (f/k/a Government Accounting Office (‘Puter’s Dad worked there for a bit)) notes:
The debt limit does not restrict Congress’ ability to enact spending and revenue legislation that affect the level of debt or otherwise constrain fiscal policy; rather, the debt limit restricts the Department of the Treasury’s authority to borrow to finance the decisions enacted by the Congress and the President.
Sounds great to ‘Puter, but probably not so great to Mr. Sargent and his fellow travelers. In the absence of available debt financing, Congress (read liberal Democrats) will have to convince America that a tax increase is necessary, and good luck with that. Democrats love to raise taxes, but only on “the rich.” To cover America’s deficits, Democrats would have to tax the crap out of every man, woman and child in this country, including “the poor,” because “the rich” don’t have enough money.
As Mr. Sargent fervently believes, Congress can and should promise citizens, lobbyists and donors the world so that a true liberal Utopia may be achieved through the grace of their god, government. As Mr. Sargent apparently refuses to believe however (those religionists refuse to face reality), Congress can renege on its promises at will, as no lesser authority than the Social Security Administration admits:
But like all federal entitlement programs, Congress can change the rules regarding eligibility–and it has done so many times over the years. The rules can be made more generous, or they can be made more restrictive. Benefits which are granted at one time can be withdrawn, as for example with student benefits, which were substantially scaled-back in the 1983 Amendments.
Got that? Congress can change the rules on benefit recipients so that America doesn’t have to borrow a cent. ‘Puter’s sure Mr. Sargent is crying crocodile tears for the children, and the elderly, and the cowboy poets.
“What will become of them, you vile, evil conservative! Have you no soul?”, Mr. Sargent morosely wails.
Riddle ‘Puter this, then, Mr. Sargent. How do you reconcile your guiding principle of “fairness” for the poor by being unfair to the rich? Is it right and just to take at the point of a gun copious and ever-increasing sums of money from the (not so) rich to finance the lifestyles of your favored groups? It is not, not in the least. And what about those children you claim to love? How is it fair to them that America’s continued borrowing is saddling them (not us) with debts related to benefits they’ll never receive? It’s not fair, not in the least.
Listen. America’s borrowed more than enough money. Hell, it’d be cheaper if we got rid of every single government agency involved in transfer payments and simply cut checks to every person in the United States. Spend your money on whatever you want, just don’t come bitching to ‘Puter when you’ve blown it all on Narragansett forty ouncers and scratch off lottery tickets.
So what’s Mr. Sargent to do if Congress cuts up his credit card? Well, in order to spend, Mr. Sargent and his liberal friends are going to have to tax, and tax a whole lot more.
If Congress raised taxes to the amount necessary to finance current year operations, it would require a 66% increase in current tax rates. Congress knows that if it increased taxes to real cost levels, citizens would descend on Washington with pitchforks and torches, screaming for their heads. As such, Congress prefers to hide the true cost of government by raising taxes on future generations (i.e., borrowing) so Baby Boomers can get their totally-not-welfare Medicare and Social Security for free!
The real reason Democrats including Mr. Sargent are caterwauling is because Republicans are forcing America to look at the real dollar cost of government, not merely the 60% cost, or for 47% of Americans, the zero cost of government. America doesn’t like what it’s seeing.
Republicans should force Democrats to tip their hand, telling Democrats to put forth legislation to fully fund the United States government through tax revenues. If Democrats want to keep each and every program fully funded, fine. Charge America the real cost in the current year. Let’s have the fight over taxes, not debt. It’s far more honest.
In the meantime, Republicans should pass a bill out of the House authorizing the Treasury to borrow such additional funds as may be necessary to retire debt currently issued on market terms and conditions. This takes Democrats’ argument that “the full faith and credit of the United States” is somehow at risk. The United States can and should pay its creditors.
But it doesn’t need to incur new debt, despite liberal protestations otherwise. America can live within its means, or tax the crap out of its citizens.
Your move, liberal Democrats.