The Learning Curve

New tricks for an old dog.

Hitting the debt ceiling & deadbeat Republicans

Debt ceilings exist in a free market when banks refuse to lend more money to a borrower. When the debtor is the United States of America, a debt ceiling also exists when the Congress prohibits additional borrowing by a duly enacted statute, even when the financial markets provide willing lenders. That is where we stand today as a Nation. Congress has put a legal cap on the total amount of Federal debt, saying, “This much and no more.”

It’s an attractive idea to suggest the solution is to reign-in spending. That is what any normal household would do in similar circumstances, and it would be a question of priorities. Mortgage payments, promissory notes and other existing contractual obligations take precedence over buying a new car, for example.

The problem is that the United States of America does not operate under the same rules as does a family household, and Federal expenditures cannot be altered, avoided  or prioritized through whim. The annual Federal budget is itself a law, duly enacted by both houses of Congress and signed by the President. The entire Federal budget, as law, must carry at least the same weight as does an individual mortgage and promissory note agreement, as an indivisible whole.  Refusal to fund the Nation’s legal obligations presents an impossible situation. Which, for example, is more important of these two, paying interest on Treasury Bills or paying agricultural support subsidies? I’m sure that each are included in the 2011 budget law.

On the one hand, the recently enacted 2011 Federal budget commands by law the expenditure of certain amounts for specified purposes. On the other hand, the Congress has refused to make responsible provisions for paying the bills that the law requires to be paid, since doing that with insufficient tax revenue requires additional borrowing. If the Federal government doesn’t have the money to pay everything, who decides what gets paid and what doesn’t?

Few will deny that Federal deficit spending is a problem, but it is a problem that has already been decided, by law, for the 2011 fiscal year ending September 30. Fiscal responsibility demands that one respects the law and contractual obligations, and does what is needed to pay the bills on time.  Fiscal irresponsibility is to buy the car, sign the loan documents, and then refuse to make the agreed monthly payments.

It is a problem invented by those who disrespect majority rule and Constitutional obligations under the guise of fiscal responsibility, by adopting the tactics of deadbeats. Those who respect our Constitution and the rule of law accept the majority decision, but seek change through elections. They do not resort to blackmail.






Written by Tom Fox

06/01/2011 at 10:54 am

Posted in Politics

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