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Debt Ceiling Drama, 2015 Edition
During the fiscal year just ended September 30, the Federal Government collected $3,018,371,000,000.00 in taxes, an average of $251,530,920,000.00 per month, or $8,269,509,600.00 per day. Everywhere except Washington DC, that is real money.
Is it even conceivable that a supposedly fiscally responsible congressional majority could fathom a way to live within those means, given that they’re an all-time tax collection record in the history of our republic?
During the same fiscal year, Federal expenditures were $3,503,730,000,000.00, incurring a fiscal year deficit of $485,360,000,000.00, an admirably low number given recent history.
The deficit equals 16 percent of tax collection. Is the Republican response to fiscal conservatives so pitifully weak that they can’t find 16 percent (plus a few percent for rolling debt) in the budget to cut? And this with 10 percent of our population on food stamps, untold more on TANF, WIC, and EITC? The list goes on. Do we need to fund a Department of Education, Labor, Housing, or Commerce?
Half, or more, of the Republicans in Congress have given a speech about a reckless, lawless, shameless executive branch and president. Is the best the center-right can advocate handing that same lawless president another blank check?
And we wonder why more than half of those polled support presidential candidates who’ve never held office. It is one of life’s mysteries.
Published in Economics, General
How about a compromise on the balanced budget? Why not a percentage based deficit cap, say 5% of the budget, or something more manageable like that? The security provided by government borrowing to the lenders is not something to just be dismissed. With normal interest rates it provides a safe harbor for capital and personal investment. In the boom times when people leave the security of government backed instruments for higher yield products we can pay down the debt from the higher government receipts, and create room to take in the debt on down swings. We know Obama level borrowing is simply not sustainable, and a balanced budget is probably not workable in reality (you have to have emergency provisions, so get ready for government always in crisis), so I propose a little blurrier line with a little slop that adjusts to current market conditions.
What’s needed (and what will never be) is a way to end omnibus spending bills. But they provide too much cover for potentially unpopular votes. They hold each party hostage to spending that they don’t like. (“I had to vote for Y because I wanted X”)
I did.
To fix a system, you have to change the incentives. What could reward congresscritters for being fiscally responsible with Other Peoples’ Money?
Great point and question. In the short run the threat of primary challenger from the right has gotten the attention of a few of them.
At some point the virtue of patriotism must triumph. If we are to have a system of incentivizing our representatives to do the right thing other than the reward of a hard choice made and a job well done then our republic is in decline and the end is nigh.
I think I understand where you are going with this and I am intrigued.
I think we need to resign ourselves to the fact that until a fiscal crisis happens nothing will change. Heck, recent Social Security studies from the left imply that SS will never go bankrupt by assuming massive benefit cuts once the “trust fund” runs out. The only wakeup call the American people and their elected representatives will heed is one that devastates our entire way of life.
Cheerful thought.
But we also need to be ready to swing into action with solutions once the crisis happens. This is what the Republican House bills COULD be – bills ready-to-go because they already passed the house before.
Show us what you stand for – so that we know that when the Republic needs to act swiftly and decisively, you are ready to act, and in ways we already think are good.
What exactly is the tipping point? The US is in the enviable position of having the world’s reserve currency. Most international debt, especially between governments, is done in dollars.
Domestically, taxes keep each and everyone of us enslaved to the dollar. You could try something esoteric but if you have income the IRS will determine a dollar equivalency and demand payment in greenbacks.
There is danger in the “living wage” movement. Should the progressives return to power in Congress and a Democratic president push for higher and higher minimum wages, it might trigger inflation and higher unemployment. Then you have demand for larger and larger safety nets. Is that where it tips? Or does it tip because the enemies of the United States conspire (with or without Democratic help) to push it?
Perhaps we should use disincentives: Every Congressperson who votes to spend money we do not have shall be put in the stocks on the steps of their own state capitol.
I think the tipping point is near. The scenario is the one we are in right now on the edge of a deflationary recession and no monetary policy tools left to inflate asset classes in attempt to stem the deflationary pressure.
Jamie, I wish I could disagree with you, but am unable to do so.
Sure, Ryan may understand the coming crisis, but he has no will to do anything about it.
– Ryan submits budgets with “20 year plans” that ‘fix’ the budget in the out years (with current levels of spending continue in the near-term).
– He lectures us that we need to “keep the promises” we’ve made. But we really can’t keep them, can we at least be honest about this? Its a math problem – not a moral problem. And these “promises” are unconscionable – robbing and impoverishing our grandkids so we can be fat and happy today!
– He also wants to amnesty 10’s of millions of low skill illegals who’ll use far, far more government money than they’ll ever provide – a financial burden to all but business who’ll enjoy the cheap labor.
So, Ryan may be the worst sort of person – a person who really does understand the problem, but won’t do anything about it!
We ignore the math long enough and it becomes a moral problem. I think you’ve detailed why we may already be there.
If we are to have debt then we should do it with wisdom. Let it provide benefits both coming and going. Right now we have so much we can’t pay a reasonable rate on it…no benefit going.
I’m in the Appalachain coal business. Just took a ten percent pay cut. Layoffs loom. How about across the board pay cuts for federal employees. Say ten percent, how close would that get us?
A darn good start, but I would prefer a tidy severance package and their separation to more productive endeavors in the private sector.
I see no reason to assume this. Almost every GOP Congressman has voted for the Ryan Plan. Most of the Presidential candidates are on record supporting it (some have even voted for it). The leadership is genuinely committed to it (even more so if Ryan becomes speaker). We need a President and a Congress that supports it, but that seems like a wholly plausible outcome from the next election.
This is wrong in important ways (and not just the silliness of referring to losing a filibuster vote to block an amnesty measure and then successfully blocking it in the courts as “backing down”).
Still, pointing out the numbers on this will take space, and hence a post.
*rolls eyes*.
I’m sure that there are all kinds of plausible bills and budgets that have had massive support but have been sabotaged by the leadership.
I spend quite a lot of my time talking to voters. By far the dominant reason that they give for either not voting or for voting for the Democrat in the race being asked about is that Republicans are cowards/ spineless/ etc.. Ask them why they think this and they will often mention Cruz.
Because most of these voters don’t know a heck of a lot about politics, they generally don’t know who they’re voting for. Cruz makes it dramatically harder to elect conservatives by making it easier for Democrats to win. It’s the reason that the “Trump draws people to the debates” argument is terrible; we don’t benefit from having people watch the debates when the people appearing in them take the opportunity to persuade people not just not to vote for a particular guy in the primaries, but that they shouldn’t be voting for the party in general. They get that from Trump, they get that from Cruz, and they get hints of it from Fiorina and Carson (their efforts to persuade people not to vote for politicians in general are most persuasive with Republicans because, well, they’re Republicans). The reward is that viewers get to see the scintilating personality of Bush and the rock ribbed conservatism of Kasich.
By treating every confrontation as an opportunity for friendly fire, Cruz makes it a priority for the party to avoid confrontation; you can’t charge if your rear is not secure.
James of England:
“… you can’t charge if your rear is not secure.”
—
There’s medicine for that now.
With luck, Perry.