After last month’s boardwalk fire in Seaside Heights, New Jersey Gov. Chris Christie, self-proclaimed fiscal hawk, immediately allocated $15 million in taxpayer money to business owners.
Sorry, Guv, but that’s why God made insurance. Government had absolutely no reason to get involved. Yet it did.
That decision is symbolic of how the United States became so paralyzed by its monstrous debt. A little here, a lot there, often for things that tug at the heart but have no relevance to government, multiplied countless times over decades. The result is municipalities and entire governments, such as Detroit and Puerto Rico, on the verge of collapse.
Now the Piper is calling the granddaddy of them all: The United States government and its incomprehensible $17 trillion debt, and no bailouts or bankruptcies can save that behemoth. Short of a complete reversal of business-as-usual in Washington — cutting debt rather than adding it — things are about to get uglier than ever before.
The airwaves are filled with "experts" admonishing Congress to raise America’s debt ceiling (the amount of debt the U.S. can legally incur) so as to avoid the "catastrophic" consequences of "default" if it doesn’t.
I’m not sure what’s worse: The deliberately disingenuous politicians and media outlets pushing that misinformation, or the ones who, without thinking, actually swallow that pap.
They want you to think this a complicated issue. It’s not. In fact, it’s remarkably straightforward: Aggressively rein in spending with a commonsense approach, or risk an eventual currency collapse that will turn America into a second-world nation in record time. It’s that simple.
So let’s cut through the white noise and look at the facts:
1.) Without question, there will be pain if the debt ceiling isn’t raised, but there will be no default. By law, payment on the national debt comes first, and there’s plenty of money to pay our interest obligation ($220 billion) since revenue is more than 10 times that amount ($2.6 trillion). Granted, that’s a ticking time bomb since the principle isn’t being touched, but it’s clear we don’t have to incur more debt to "pay off" existing debt. So let’s not do it.
2.) Most everyone concedes the astronomical debt poses a significant problem, yet every time the ceiling is reached, Congress raises it even further — and the shopping spree continues. This of course leads to more deficits and more debt, creating a vicious cycle. (Quick primer: The deficit is the amount we overspend each year; the debt is the total amount we owe). Enough is enough. Keep the ceiling where it is, and force the government to tighten its belt and live within its means, just as solvent businesses and stable families do. Identifying a problem yet looking the other way is impotence. Enabling its growth is cowardice.
3.) All the economists, politicians and Wall Streeters who say that not raising the debt ceiling would be the height of irresponsibility need to look in the mirror. How is raising it any saner? Doing the same thing repeatedly and expecting a different result — in this case, thinking that increasing debt will prove beneficial — is lunacy. If they’re the best and brightest, I shudder to think of the dumb ones.
4.) Prioritize the budget. Force Congress to finally do its job, making them fight like cats and dogs to fund what is most needed. You’d be amazed at how quickly they figure out what’s important — and what isn’t. Pass a law requiring across-the-board cuts. No exceptions, even the sacred cows of entitlements and defense. While it won’t be pretty, people will be much more accepting if they know everyone feels the pain. Most important, get the ball rolling on a constitutional amendment mandating a balanced budget, as almost all states have that requirement.
5.) Magically creating money to pay our bills is insane, but the Fed has been doing just that, inventing $85 billion per month with a keystroke (they don’t even print it anymore. Ain’t technology great?), which then gets pumped into the "economy" via Wall Streeters’ pockets. That’s why, despite the stagnant economy, the stock market remains so robust, artificially propped up by an entitlement program for the super-wealthy. Wall Street has become so addicted to the Fed’s drug that the mere mention of cutting back sends the market tanking, so the funny money keeps rolling. This must end now, on our terms, before the big meltdown occurs, since what goes up must come crashing down.
6.) While unfathomable a generation ago, the world now views America as an increasingly bad credit risk. That’s why there has been such a drop-off in the purchasing of Treasuries, and why the Fed itself is buying a trillion dollars’ worth each year.
Many are concerned with the substantial U.S. debt owned by the Chinese, but that’s yesterday’s news. Not only aren’t the Chinese buying Treasuries like they once were, but they (and the Japanese) have been dumping significant U.S. debt while buying gold and silver at a record pace. Think they know something?
The game is up, and everyone knows it — except those in Washington.
A wise man once said there’s what people want to hear, there’s what people want to believe, there’s everything else — and then there’s the truth. And the hard truth is that all of the easy answers are behind us.
To think America can’t fall is arrogance at best, stupidity at worst. It can, and will, unless drastic action is immediately taken, starting with the current debt ceiling being kept intact. Doing so would send an unmistakable message that America is serious about making a comeback. But raising it as a "solution" would be akin to rearranging deck chairs on the Titantic.
Anyone remember how that turned out?
Chris Freind is an independent columnist and commentator. He can be reached at [email protected]
About the Author
Chris Freind writes a weekly column for the Daily Times. Reach the author at [email protected] .
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