The Coolest Cats in the Blogosphere

Debt Ceiling

If Boehner had balls, this is what he would do.

My fellow Americans,

For most of the last 40 years, you have been conned and screwed.

You have been sold tax cuts on the premise that they result in more revenues. While that has proven to be true, we in Congress have used that extra revenue to feed a spending orgy.

You have been told that the spending is not a big deal because the deficits are small compared to our Gross Domestic Product. In fact, a Vice President–in my party–is on record as saying that deficits don’t matter.

Sadly, deficits do matter. Making matters worse, when you subtract government spending, GDP has been negative for most of the last 30 years.

What does this mean?

For an entire generation, we in government have spent money faster than you have been able to make it. As a result, your share of the debt has grown, all while our political class insists on more and more government.

Sadly, this level of spending is not something we can sustain forever. If we keep this up, our economy will implode in a way that will make the crisis of 2008 look like a bonanza.

Ladies and gentleman, the President is demanding that we give him permission to continue the spending spree in return for miniscule cuts in spending that will never happen. I will not give him that permission.

As Speaker of the House–which Constitutionally is responsible for budgets–it is my insistence that THIS CONGRESS do the right thing for the American people, and create a situation that will sow the seeds for prosperity for future generations, ensuring that they will not be saddled with debt.

As Speaker, I propose that THIS CONGRESS BALANCE THE BUDGET.

That means

(1) We cut $800 billion in spending THIS YEAR;

(2) We cut the remainder of the deficit NEXT YEAR.

In return for that, we extend the debt ceiling for two years, in order to allow for the short-term liquidity for structural transitions–to be made starting this year and continuing into the end of the Congress–that will be difficult.

Those structural transitions will include the following:

(1) elimination of the Department of Education;

(2) elimination of the Department of Housing and Urban Development;

(3) elimination of the Department of Labor;

(4) elimination of the Department of Homeland Security;

(5) elimination of most of the Department of the Interior;

(6) elimination of the Department of Agriculture;

(7) elimination of most of the Department of Health and Human Services;

(8) elimination of the Drug Enforcement Agency;

(9) elimination of the Bureau for Alcohol, Tobacco, Firearms, and Explosives;

(10) returning unemployment benefits to 26 weeks;

(11) ending the food stamp programs;

(12) ending all aid to foreign nations;

(13) cutting the defense budget in half;

(14) breaking medical monopolies that have busted the budgets for Medicare and Medicaid;

(15) indexing the Social Security and Medicare retirement ages to account for expanded life expectancies of cohorts, while keeping those who are already retired properly covered;

(16) ending all federal guarantees of student loans, and permitting all debtors–in financial distress–to seek relief through the bankruptcy code.

While this initiative is bold, it should not be. In fact, this is the first responsible budgetary initiative that has come from Congress in the last 50 years. And it has been a long time coming.

My fellow Americans, the sad truth is that we have more government than we can afford. That is the $16 trillion elephant in the room, which has been defecating all over the floor. The President–for all his talk–has delivered mere smoke and mirrors. In the past, I have failed in that I have allowed him to get away with it while hoping that he would be willing to get serious.

While he has not done so, it is no excuse for Congress to fail to act.

I wish there were a better answer. I for one do not wish for any government employee or contractor to lose a job. These are good people with families, homes, mortgages, and who have the same hopes and aspirations that the rest of Americans do.

At the same time, mathematics is not on our side here. This is not about what I want, it is about what the American people can afford. We have more government than we can afford.

When you look at the deficits–which have exceeded $1 trillion for the last 4 years, and exceeded $400 billion in the four years before that–it is a symptom not of a revenue problem, but rather a spending problem.

If you were spending $10,000 more than you made every year, and then promised to cut $1,000 over ten years, you’d be laughed out of the room. And yet, your President is telling the same thing, and calling that a substantive cut.

Ladies and gentlemen, that is trying to fight a forest fire with a water pistol.

As your Speaker, I am demanding that THIS CONGRESS do what the President PROMISED to do in his first term.

We will balance the budget. That deficit will be zero at the end of this Congress. And we will release the American people to build the society that government promised but has failed to deliver.

These moves will be difficult and painful. For 12-18 months, the economic outlook will not be pleasant, as so much of our economy has become predicated on the growth of government.

At the same time, the endgame will be promising. By delivering a stable budget, our country will be the best place for foreign capital. We will become a country that rewards saving and investing and capital formation: the things that drive real economic growth. We will become a country that rewards hard work, not providing incentive to freeloaders. We will become the center of innovation once again. We will become the center of manufacturing once again.

What I am saying has historical precedent.

In 1920-21, we had a nasty recession. Unemployment spiked to 15% in short order. You would think that government would have responded with big spending, but that didn’t happen.

Instead, we balanced the budget, we allowed businesses to fail, and we allowed the private sector to adjust accordingly.

As a result, within short order, we returned to full employment, and the outcome was a decade of unprecedented prosperity.

Our best days need not be in the past. But in order for us to return to real prosperity, we must get our financial house in order.

This Congress will do that. We will settle for no less.

We call on the President to cut the shenanigans and have the adult conversation. We invite him to a public summit where we can provide a detailed accounting of that situation.

But we will balance the budget. We will do it with this Congress. And we will start now.

6 thoughts on “Debt Ceiling

  • Brendan says:

    Very good post, and I very much agree in substance, but whenever I see a discussion about the debt ceiling, I like to review this humorous take on it:

    http://youtu.be/EoS52fVtVQM

  • singleman says:

    If Boehner had balls, this is what he would do.

    Somehow, I don’t expect him to grow any anytime soon; the same for Mitch McConnell.

    In the meantime, I came across this article suggesting the U.S. should go ahead and default on its national debt now in order to protect future generations.

    http://finance.yahoo.com/blogs/daily-ticker/america-declare-bankruptcy-doug-casey-124119100.html

    • Amir says:

      I don’t believe we need to do that. In fact, we have more than enough revenues to service the interest on the debt and pay it down.

      What we do not have is the financial structure to service the growth of government. Medicare is probably the worst of the culprits, as that has been growing at a compounded rate of 9% over the last 30 years. That isn’t sustainable, and is itself reflective of a positive feedback loop that is out od control: the spending itself creates more demand, which creates a need for more spending, which creates more demand…

      Social Security can be fixed easily; Medicare and Medicaid are whole different ballgames.

      That said, default is not necessary. Spending cuts are.

      If I’m Boehner, I might as well go for the home run. Obama means business about higher taxes and more spending, so it’s about damn time that someone from the GOP decided to swing for the fences.

      If you’re going to go down, then go down with your A-game.

      After all, what else do you have to lose?

  • Won’t matter. Republicans didn’t even cut back anything when they controlled it all. They have no chance gutting anything when they are not in power anywhere.

  • Savvy says:

    I believe what would happen is that churches would have to take up the slack and assist people who fall through the cracks in orphanages and poor houses-something which the church has not been doing nearly so much of as it once did.

    However, I don’t believe that many conservatives would be a fan of eliminating the Dept. of Homeland Security as that would mean the borders would be open to people getting through quite easily.

    I am a fan of getting rid of the Dept. of Agriculture as it should more aptly be titled the Dept. of Agribusiness and Animal Cruelty. We should teach people to raise some of their own food, make some of their own clothes, and cook. As a result they would not be so dependent on mass-produced garbage. I’ve started growing some of my own foods and find it very rewarding. I like the “Grow food not lawns” movement.” Have a lawn if you wish, but there are more productive things to do with the land. And it’s really not that difficult. :) Growing your own is the ultimate rebellion.

  • Dave says:

    You crazy Americans and your debt ceiling… it’s just forcing politicians to gripe for a while about how terrible it is to pay for what they already promised to pay for.

    That said pretty much all developed countries are basically broke.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>