Sunday, May 29, 2011

Politics and the debt limit

For as long as I can remember, votes on raising the federal government's debt ceiling have served as an occasion for political grandstanding. When the Democrats are in charge, Republicans take advantage of the opportunity to rail against excessive government spending, and use these votes as a means for blaming the Democrats for incurring too much debt. When the Republicans are in charge (especially since Reagan, when Republicans' sense of fiscal responsibility went out the window), enough Democrats in Congress vote against raising the debt ceiling to force Republicans to take some responsibility for adding to the government's borrowing. It must be recognized, however,  that every vote against raising the debt limit is nothing but a political statement, since the debt ceiling MUST be raised otherwise we risk defaulting on current obligations, impairing the credit of the United States, and substantially increasing the cost of financing our existing debt.

Currently we are at that point once again. Congressional Republican leaders understand that we have no choice but to raise the debt ceiling. They cannot even argue in good faith that there is a way to avoid raising the ceiling. They have not proposed a budget that lowers or maintains the existing level of debt. Even the Ryan budget, passed by the House but defeated in the Senate, projects deficits as far as the eye can see. There is no serious budget proposal on the table that does not require raising the debt ceiling. In fact, Republicans are now being forced to recognize that the Ryan budget proposal, especially in regard to Medicare (which is the program you would have to cut drastically if you had any serious intention of balancing the budget without raising taxes), has virtually no chance of being accepted by the American people. So let me repeat: NOBODY has put forward a serious plan (which I would define as a plan that has any chance of even being considered by Congress), for balancing the federal budget this year, or in the immediate future. Nobody. And if we can't balance the budget this year, that means we have to increase the national debt. Nevertheless, Republicans are using the current impasse as a lever to attempt to force a few more policy changes they have not been able to pass otherwise. It's an illegitimate and anti-democratic tactic.

One of the videos I came across when I was collecting scenes of Republicans being confronted by angry constituents during the last recess, showed a Congressman (I can't remember who it was now) being asked by a constituent whether he would vote to raise the debt ceiling, or allow the United States of America to default on its debts for the first time in history. His response was to ask whether, if your kid has maxed out his credit card, you would give him another one, or force him to live within his means. A cute analogy, except that Congress cannot be analogized to the parent forcing the kid to live within his income. Congress is the kid. Congress has already voted on the appropriations for the year, and has refused to vote for the revenue increases required to pay for them. That means we need to borrow the difference. If Congress wants to act like the grown-up, it must vote to raise the debt ceiling.

(photo from My Credit Specialist)

No comments:

Post a Comment