January 28, 2011 by Chip Wood
No, I am not talking about the Presidents State of the Union speech from this past Tuesday. Thanks to the deadline demands at Personal Liberty Digest, I had to finish this column the day before that oration. I will comment next week on Obamas performance (which I expect to be filled with platitudes and promises that the media will love and the White House wont keep).
My topic today is the great debate over raising for the 81st time since 1940 the ceiling on how deeply in debt the Federal government can go. Right now, Washington is not allowed to borrow a dollar over $14.29 trillion. And theyre already within $300 billion of that limit, give or take a few billion bucks.
To hear our officials tell it, if Congress doesnt vote to let the Treasury borrow more billions, and do it now, the U.S. will face the biggest calamity since women started wearing slacks.
Ill have more to say about our Treasury Secretarys blustering baloney in a moment. As everyone knows whos been paying attention, Timothy Geithner is one of the biggest lying liars to ever hold high office, to use Sen. Al Frankens inimitable phrase. He is without a doubt one of the slickest, smoothest-talking apologists for massive, irresponsible government spending Ive heard, second only to his boss.
But our boy Tim is a mild-mannered milquetoast compared to Austan Goolsbee. If youve never heard of Goolsbee, Im not surprised. Even though he carries a very prestigious title as chairman of the Presidents Council of Economic Advisers, he mostly toils in the obscurity his incompetence so richly merits.
To say Goolsbee is a mouthpiece for President Barack Obamas White House is like saying McDonalds likes to sell hamburgers. Of course he is. He would never have been given his present job if he werent. So when he says things like the impact on the economy would be catastrophic if Congress doesnt once again raise the debt ceiling, you know the message is coming straight from the Oval Office. He is the Charlie McCarthy to Obamas Edgar Bergen. (Kids, ask your grandparents what that means.)
Normally, when some high government mucky-muck issues a pronouncement that should make his nose grow longer than Pinocchios, I just yawn and move on. But this gem from goofy Goolsbee really got my goat: If we get to the point where we damage the full faith and credit of the United States, that would surely be the first default in history caused purely by insanity.
Get that? If Congress doesnt raise the debt ceiling, it can only be because those of us who insist the spigot be turned off are nuts. Not raising the debt ceiling will be a calamity of unimaginable proportions.
Geithner says it a little smoother, but his message is the same. In a four-page letter to Senate Majority Leader Harry Reid, Geithner said, Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States.
Geithner then goes on to list all of the horrendous consequences such a lapse would bring no Medicaid payments to the states, no student loans, no salaries and retirement benefits for our military, no income-tax refunds, no veterans benefits. And just in case you arent already shaking in your boots, no Social Security or Medicare benefits.
Wowser. I can already hear the weeping and wailing and gnashing of teeth at the prospect of such a disaster.
Theres just one thing wrong with Geithners and Goolsbees horrifying scenario: It isnt true. In fact, its a total, 100 percent fabrication. Or to be blunt, its a lie. And both distinguished public servants know it.
Heres the truth: If Congress refuses to raise the debt ceiling, the Federal government will still have far more than enough money to fully service our debt. I put that statement in quotation marks because it wasnt me who said it; it was Senator Pat Toomey (R-Pa.).
Now before you conclude that Toomey has been inhaling too much medical marijuana, let me explain. Its true that interest payments on our national debt cost a hefty amount around $1.3 billion a day, in fact. But that sum, staggering as it is, represents only 6.5 percent of all projected Federal expenditures. Uncle Sam receives more than 10 times that amount in tax revenue. So Toomey wants Congress to pass a bill that will require the Treasury to make interest payments on our debt its first priority.
How do you like them apples? Just agree to pay our debts first and there can be no default on them. With the stroke of a pen, the problem is solved.
Well, not completely solved. Theres still that pesky matter of Obama wanting to spend a trillion dollars or so more than the Treasury will take in. What can you do about that?
I guess its pretty ridiculous to ask a few of Obamas favorite billionaires to make up the difference. There will be no passing the hat in Hollywood; no fund-raisers sponsored by George Soros, Bill Gates, Warren Buffet or their buddies.
So what can we do? How about cutting spending?
How about doing what every responsible family in America learned long
ago to do: Match expenditures to income. Dont borrow more than you can
afford, just because you want some
shiny new toys.
With $14.29 trillion in debt, I will argue, ladies and gentlemen, that we have already borrowed way more than we can afford. We have already put enormous burdens on our children and grandchildren and probably their children and grandchildren as well.
You know what? A lot of people agree with me. Let me call one of them to the witness stand now. This is what then-Senator Barack Obama said in 2006, when he wanted to embarrass then-President George W. Bush about raising the debt ceiling back then:
The fact that we are here today to debate raising Americas debt limit is a sign of leadership failure. Leadership means that the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase Americas debt limit.
Wouldnt you like to see the same commitment to our children and grandchildren from Obama today?
By the way, Senator Obama wasnt the only person on the left-hand side of the aisle to oppose raising the debt ceiling four years ago. Nevadas Harry Reid declared that my Republican friends should explain why they think more debt is good for the economy. The soon-to-be Majority Leader then promised, Democrats wont be making arguments to support this legislation, which will weaken our country.
I wish I could tell you that the Republican leadership in Washington today can be counted on to stand strong on this issue. Unfortunately, Im afraid the opposite is true; I suspect they will cave and compromise, as they have so often in the past.
Already, House Speaker John Boehner has gone on record saying that hell support raising the debt ceiling because we have to be adults (about the problem). Even author and economist Art Laffer, who has toed a pretty tough line in the past, says the prudent thing to do today is to raise the debt ceiling but demand something in return.
How can we possibly reduce spending enough to live within our means? For one possible answer, please go to www.DownsizingGovernment.org. This is where youll find a page-by-page, line-by-line review of the Federal budget by one of my favorite Washington organizations, the Cato Institute. They provide a detailed and convincing analysis of how to reduce spending by $1.375 trillion.
Yes, it can be done. Now the crucial question is, will it?
Please do your part by demanding that your Congressman vote no on raising the debt ceiling. And then get as many friends and relatives as you can to do the same. For a start, how about sending them this column? And asking them to send it a dozen other people?
We dont have to lose this battle. We dont have to spend ourselves into bankruptcy. And no, we dont have to default on a single dollar of our national debt.
We do have to stop listening to lying liars such as Timothy Geithner and Austan Goolsbee. And the sooner the better.
Until next time, keep some powder dry.