"National Debt Limit Crises" is a Political Lie
July, 2011 -- You have heard the warnings from the Schumers and the Obamas and the Wydens. The evil conservatives want to push granny off the cliff after a last meal of dog food. Oh brutish beasts, thy name is a curse and is a Tea Party from Hell. If you don't raise the debt limit, U.S. Bond ratings will go in the tank, the stock market will collapse, Social Security payments will stop, Medicare payments will stop, desperately needed life-saving pharmacy medications will be denied to our children, elderly and the poor.
It's the last days of love in America, the opening of the gates of a fiscal, ghastly hell.
Now, some truth.
This isn't nuclear physics. If you make two thousand dollars per month, and you spend two thousand, five hundred dollars a month, then you have to come up with five hundred dollars somewhere to pay all your bills. You can steal it, print it in your basement or borrow it from the bank, relatives or friends.
Or, you can take a look at your bills and decide to prioitize starting today.
On your list is the house payment, insurance payments, food, gasoline, and stuff like that. Al;so on the list are two visits to a good restaurant per month, the membership fee for a good athletic club where you keep in shape and two credit cards you use to stock your wine cabinet, purchase reconditioned stuff for the game room and take the occasional weekend jaunt to the Indian casino on the coast.
Looking at the numbers, you see that if you don't add even more debt by buying even more stuff next month -- then, cut back on some extras, you don't need to borrow any money. You can cut back on game room antiques, collectible vintage wine and the number of casino trips. You still get all of them, but only half as many as before.
By stopping the growth of debt, and instead making a few simple cuts, you can pay the really serious bills and still have a few extras.
The government can do exactly the same thing.
In the case of this Debt Limit the same process will work. Use the revenues that are comiing in from paycheck tax collecting to pay the interest on the debt bonds, and to cash out folks who want to just cash in their bonds. Next, use those revenues to cover the cost of the military. (A few less trips there would be useful.) Then you cover the entitlement checks for the old folks and the poor folks.
And here's the key to being free.
Unless you rate collecting vintage wine the same as making your house payment, you are soon going to get down to things that aren't as important as other things. Giving billions to foreign governments who hate America would be one of these. Giving giant subsidies to General Electric to make windmills whose blades kill the endangered California Golden Eagle would be another place to cut. Funding Harry Reed's next Nevada Cowboy rodeo event would be another. Sending the President's wife with an entourage to every country on the globe on a goodwill tour would be another expense to question. Sending Hillary Clinton to Italy to host a Gay Pride event would be another.
Yes, the air will fill with screams of pain. These people look like adults, but are actually children who are angry when you don't buy them a candy bar at the checkout counter.
The net result?
Anger from a lot of people used to lavish treatment paid for by the government. Frowns from corporate CEO's and big union hotshots who donated a lot of money to certain politicians, expecting crony capitralism to bill the taxpayers for a lavish payback.
And, you'll have a triple-A bond rating because those things are based on what you do about your bond interest. The bond rating people could care less what you stop giving to Kenya, the ethanol interests or public broadcasting. If they get what they're owed, that is a fine and healthy, proper and A-merican way to look at money.
When they see that you take care of them first, they're going to be very disappointed?
If you see this predicted disaster starting to loom up on the mainstream media screens and pages, know that it is being intentionally generated by choices made by the government pals of those magazines, newspapers and networks. These choices will be made for political, not financial reasons.
With the revenues we have coming in, there is no disaster ahead -- unless some folks want one.
If you can't guess who would want one, at present, you're a Progressive, and belong in a Soviet-type agricultural commune. You're too stupid to vote.
© 2011 Oregon Magazine