Don't Raise the Debt Ceiling
...say Veronica de Rugy and Jason Fichtner in the Washington Times:
Sen. Pat Toomey, Pennsylvania Republican, proposes that the federal government prioritize paying the national debt above all other spending. The most recent Office of Management and Budget data shows federal revenues will reach $2.17 trillion this fiscal year. Interest payments on the nation’s debt are estimated to be $205 billion this year, or about 10 percent of revenues. Taking that payment off the top, as Mr. Toomey’s plan would, leaves $1.9 trillion for Congress to spend. That’s enough to pay for Social Security ($741 billion), Medicare ($488 billion), and Medicaid ($276 billion), with $395 billion left for other programs.
Treasury Secretary Timothy F. Geithner called Mr. Toomey’s bill “quite harmful” and “unworkable.” And he used this analogy of a typical American homeowner to explain why: “A homeowner could decide to ‘prioritize’ and continue paying monthly mortgage payments, while opting to cease paying other obligations, such as car payments, insurance premiums, student loan and credit-card payments, utilities, and so forth. Although the mortgage would be paid, the damage to that homeowner’s creditworthiness would be severe.”
Mr. Geithner, however, mistakenly assumes that American homeowners always pay their expenses with borrowed funds (the way the government does). Most do not. When tough financial times hit, families eat out less, go to fewer movies, buy fewer clothes and postpone vacations. If those things don’t save enough, then they might borrow money to pay bills or skip payments.
They make an excellent point. And also, Republicans may have a stronger hand here than expected. From USA Today:
A new USA TODAY/Gallup Poll finds that House Republicans, who took a political risk in passing a controversial budget blueprint last week, have survived so far with some key advantages intact as Congress moves toward the debate on raising the debt ceiling, passing the 2012 budget and enacting a long-term deficit plan.
Americans are evenly divided between the deficit plan proposed by President Obama and the one drafted by House Budget Chairman Paul Ryan, and those surveyed put more trust in Republicans than Democrats to handle the federal budget and the economy.
Pessimistic about the economy and the nation’s course, they overwhelmingly blame too much spending for soaring federal deficits and want to rely more on spending cuts than tax hikes to get it under control.
As long as the debate is about "too much spending" and the need for "spending cuts," then conservatives are in the hunt. Maybe it's time to play hardball.
Don't raise the debt ceiling. Let's starve the beast.
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Sep '10
Re: Don't Raise the Debt Ceiling
And the military?
Given that we have 2.3764 wars going on right now, and the small point that it is a constitutionally mandated responsibility of the federal government, I would much rather see the first dollars in the door going to pay for national defense.
Then Social Security. Then Medicare. Then Medicaid.
If we run out somewhere in the middle of sending out SS checks, well, tough luck. Move in with your kids. (just kidding, but barely..)
Mar '11
Re: Don't Raise the Debt Ceiling
Hmm, I am gonna have to stop referring to our illustrious co-founder as Rino-Squish Rob.
Jan '11
Re: Don't Raise the Debt Ceiling
I had the displeasure of watching Jon Stewart's show last night, where the guest was the intolerable Bernie Sanders. Sanders aggressively peddled the myth that Republicans were trying to dismantle Social Security and Medicare so as to give yet more money to "millionaires and billionaires" (these are now joined together as a single word: millionairesandbillionaires).
If we cut federal spending by a trillion, or if we merely cut the stimulus, we'd only be returning to 2008 levels, when this same government took care of the same people. If the government could provide the same safety net with a trillion fewer dollars only two years ago, how can Sanders claim (without being arrested by the Straight Face Police) that to cut anything anywhere is a crime against the elderly? Did the cost of the safety net go up by a trillion dollars in just two years?
The Democrats (and Sanders) are wailing that we must raise taxes ... to pay for what? Their spending, which only the Democrats voted for.
Why should we increase the credit card limit for these idiots?
Dec '10
Re: Don't Raise the Debt Ceiling
Timmy just thinks that everybody else has a hidden income stream good for a quarter mil or so, that they don't even bother claiming, that they use to boost their credit rating.
Doesn't everybody have that?
Sep '10
Re: Don't Raise the Debt Ceiling
I know you could make this point virtually every time a member of the administration opens his mouth, but it rankles that one must use formulations like "Mr Geithner mistakenly assumes." He doesn't mistakenly assume anything. He doesn't mean a word that he's saying; it is merely his disingenuous means of combating a sensible proposal that undercuts his policy preference of the moment.
Jan '11
Re: Don't Raise the Debt Ceiling
I'm with Sen.Toomey on this one. The pressure to increase the debt ceiling reminds me of the pressure to pass the original TARP - it has to be done now! Right away or disaster! There is more leverage to be had here than in the CR negotiations or the 2012 Budget. Recall the "we're only one half of one third of the government" stuff? Well their ratio changes on this one. The executive branch doesn't have veto power and we can( hopefully) hold things up in the Senate with the non-squish votes we have. Their leverage to change this trajectory is greatest now. Its not the mean old Republican's shutting down the government - we're taking the keys away from the drunk.
Mar '11
Re: Don't Raise the Debt Ceiling
How do Timmy Geithner and lefty pundits get away with claiming that the faith and credit of the U.S. Government will be impugned if the House fails to raise the debt limit?
They seem to be equating not raising the limit with defaulting on existing debt.
I'm not trained in the dismal science but it seens to me a sign of adult behavior might help faith and credit.
Jul '10
Re: Don't Raise the Debt Ceiling
I think this whole Ricochet thing is getting to you, Rob. Looking forward to the federal fire sale. Everything must go! Especially those five gallon per mile presidential limos. And about those official helicopters that go soaring across the Potomac bridges during rush hour, don't they know that Calcutta needs traffic copters? Oh, the humanity.
Jun '10
Re: Don't Raise the Debt Ceiling
Can someone explain to me how refusing to borrow more money in the face of financial collapse would be catastrophic? To continue borrowing while decrying the debt is like a drunk swearing off liquor . . . next week. Isn't putting an immediate stop to borrowing the only way to address the problem and communicate we are serious about it? I'm not buying the arguments, not even from Dr K. on this one. The money to service our accumulated debt must come from money we actually have, not from further borrowing; that is the crux of the problem.
Edited on Apr 29, 2011 at 8:42am