Commentary by James H. Shott
Did you know that the United States paid $413 billion in interest on the national debt in 2010, and that was more than we spent running a dozen federal departments and agencies (Health and Human Services, Transportation, Energy, Veterans Affairs, Housing and Urban Development, Justice, Homeland Security, Agriculture, Commerce, Treasury, Labor, and the Small Business Administration) combined?
The US spending addiction is so bad that since 1988 we have spent $8 trillion on interest payments alone. According to governmentgonewild.com, that’s enough to buy every taxpayer – more than 140 million of us – a really expensive Lotus sports car. The debt is so enormous, the Web site asserts, that if we started today paying $100 million a day against the debt, it would take 389 years to pay it down.
The Congressional Budget Office estimates that at the rate we are going, by 2021 we will spend $1.1 trillion on interest annually, and by 2046, the CBO says all tax revenue collected will be required just to pay the interest on the national debt.
Even at that point you may rest assured that big government types will want to borrow even more money, and will whine and stomp their feet over suggestions that they cut spending to match tax collections. We’ll be treated to the same pathetic efforts they use today to demonize those who advocate fiscal responsibility, such as charging that fiscal conservatives are mean and cruel, and spouting absurdities such as cutting spending will deny children health care, put poor people out on the street and kill old people, or at least make them eat dog food. That’s what passes for honest debate these days, and it is intended to scare the public away from responsible fiscal policies. Then the demagogues can keep giving handouts to their supportive constituencies, and if that bankrupts the country, well, that’s the price we have to pay.
But, as they say in certain parts of the US where common sense is not an alien concept, “That dog won’t hunt.” Last week the Associated Press reported that Standard & Poor's Ratings Service “downgraded its outlook on U.S. government debt, expressing unprecedented doubts (emphasis added) over the ability of Washington to bring the massive federal budget deficits under control,” lowering the long-term outlook to “Negative” from “Stable,” “saying there is a one in three chance the United States could lose its top investment rating on its debt in the next two years.”
Will that message get through to spending-addicted Washington?
Then we have the debt ceiling, a device designed to prevent the very thing that has occurred: runaway debt. Currently, the debt ceiling is $14.3 trillion, a limit the US will tear through this summer unless the ceiling is raised yet again, or, better yet, unless more sensible action is taken to reduce spending and pay down the debt. Failing to raise the debt ceiling is now being portrayed by our spending-addicted politicos as a calamity greater even than a Barack Obama presidency. But it’s just more fear-mongering; another ploy to scare the masses.
However, Andrew Moylan of the National Taxpayers Union told The Daily Caller that “failing to raise the debt ceiling would merely trigger a 10-12 week period where ‘extraordinary measures’ could be taken by the Treasury Department to ‘shift things around.’” Maybe that includes furloughing “non-essential” government employees. Why does government have “non-essential” employees?
While failing to raise the debt ceiling isn’t the looming catastrophe that we are being told it is, raising it likely will have the same effect that it has had the five times it has been raised since 2002: it will do nothing more than allow the government to postpone behaving responsibly.
There are legitimate reasons to increase a credit limit, but they are rare, and increasing the limit on borrowed money five times in nine years reflects something altogether different than emergency circumstances: it indicates a strong and irresponsible compulsion to spend, spend, spend, rather than live within our means.
The good news is that we common folk out here in fly-over country realize what Washington’s ruling elite either doesn’t realize, or ignores. A recent poll by CBS News and The New York Times shows that by a margin of 63 percent to 27 percent, participants oppose raising the debt limit, including 83 percent of Republicans, 64 percent of independents, and nearly half of the Democrats (48 percent). And 70 percent of those opposed hold to that position even if it means that interest rates will go up.
Yet President Barack Obama hasn’t gotten the message. As reported by MSNBC: he “sent Congress a $3.73 trillion budget Monday that holds out the prospect of eventually bringing deficits under control through spending cuts and tax increases. But the fiscal blueprint largely ignores his own deficit commission's view that the nation is imperiled unless huge entitlement programs like Social Security and Medicare are slashed,” and includes yet another huge $1.1 trillion budget deficit.
Taxpayers are being disserved by most of their elected federal officials, who refuse to do their job. If you or a co-worker behaved this way, you or they would be fired.
This process should commence immediately.
Cross-posted from Observations