Monday, January 03, 2011

The fallacy of the "Debt Ceiling."

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We are told that the world as we know it will end if Congress doesn't increase the debt ceiling. The left is bitching like cut cats that the right doesn't want to increase the debt ceiling... even though the Empty Suit himself voted against increasing or raising the debt ceiling in 06 while he skipped voting on it in 07 and 08 at all.

First, what is the debt ceiling?
Debt ceiling

The Second Liberty Bond Act of 1917 established a statutory limit on federal debt.[96] Congress had previously approved each debt issuance separately. The debt limit provided the U.S. Treasury with more leeway in the administration of debt, allowing for modern management techniques in government finance.

The U.S. Treasury Department now conducts more than 200 sales of debt by auction every year. The Treasury has been granted authority by Congress to issue such debt as was needed to fund government operations as long as the total debt (excepting some small special classes) does not exceed a stated ceiling.

The most recent increase in the U.S. debt ceiling to $14.3 trillion by H.J.Res. 45 was signed into law on February 12, 2010.[97]

All of this begs the issue: What's the point of bothering to even have a debt limit if you're just going to jack it up whenever we bump up against it?

Congressman McClued would be a "no." Ridgefield Barbie's vote? Who knows?

One of the many definitions of insanity is to keep doing the same thing, over and over again, while expecting a different outcome.

Before we increase our ability to bury ourselves in debt, we need to look at, and address the reasons we ARE in debt.

Get rid of Obamacare. Cut federal pay and benefits back to 2005 levels. Privatize the TSA to eliminate 70,000 federal employees. Eliminate the unemployment extensions. Put what's left of the horrific porkulus back into the general fund ($400 billion or so).

Sell any interest the government has in any private business. Tell Obama to stop going on his once a month vacations; knock off the weekly White House Neroian-themed parties and stop the golf tournaments.

Put these into effect, and the reasons to increase the debt ceiling suddenly become, well, non-existent.

Sooner or later, we WILL have to do something like this... why not now before it gets any worse?
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6 comments:

Gr8mochas said...

One of the things that people don't know is that the cost of Medicare is going up quite rapidly. We all seem to think that once we reach age 65 that we will get cheap insurance through Medicare but the days of the 100.00 a month healthcare costs is long gone. Perhaps I'm the only one, but for some reason I thought that Medicare was a fixed cost. It doesn't change much from year to year for my Dad. However, I had a friend turn 65 recently and the cost to her was between 300-400.00 per month. That is more expensive than what I pay for insurance.

The medical insurance costs for our elderly are a silent cost to most of us. We don't really know what medicare costs because we don't need to. I guess that makes me ask the question...how many other silent costs are going up? When I get to retirement age, what am I going to face that I didn't know was being screwed with. There is a lot of collateral damage with what the government is doing right now and I don't know that any of us can pin down all of it. We'll just stumble across it in a few years when we least expect it.

K.J. Hinton said...

The point is that even now, people either don't know... or they don't care.

The creep... the fiscal creep is insidious. It's like a slow growing cancer.

Discovered early, it's much easier to treat. Left alone too long... and it's fatal.

Martin Hash said...

For my part, I'm always surprised when people are outraged that their healthcare costs are rising! Heathcare in this country is private enterprise that deals in an essential commodity - that's a formula for getting rich. Nothing at all wrong with it... Unless we as a people decide that maybe healthcare is one of those things that is so important to society that we should socialize it?

That's the argument.

K.J. Hinton said...

Martin, that still doesn't answer the question for me.

The debt ceiling seems to be a mere formality. It's like a cartoon, where one character draws a line in the sand and dares another character to cross that line... only to have the first character just draw another line and then dare the second character to cross it.

I believe that much more can be done to introduce the concept of competition into health care... some simple things, such as allowing health care insurance to cross state borders (The car insurance model comes to mind) and, of course, if viewed in terms of a simple commodity, then we ought to look at socializing all such commodities... like gasoline.... the Venezualan model?

I believe the government's knee should jerk in the direction of market based solutions... because one thing seems clear to me: Obamacare hasn't made anything cheaper.

Martin Hash said...

Actually, my comment looked as if I was singling Kriss out - I'm sorry. I got confused about the topic of a debt ceiling.

"Debt ceilings" are old school, Gold Standard stuff. Modern Keynesianism (deficit spending) makes them an anachronism. However, R's are monetarists so a Debt Ceiling still has a small meaning.

Martin Hash said...

Getting back to Venezuela...
Chavez could die of an impacted bowel and I wouldn't be too broke up about it, but I'll give credit where credit is due. A country should NEVER sell it's natural resources to another country, especially something as vitally important to national security as energy! And especially if some previous dictator sold his own people down the river, took all the money and settled for the good life on the Riveria. Old Hugo was right to nationalize oil. You'd do the same thing if you were King-Of-The-World and China owned all of the oil in our ground.