Fiscal responsibility: any takers in D.C.?
Sunday, October 27, 2013 10:00 PM
On Oct. 17, Congress passed their bill to end the government slowdown (can't call it a "shutdown" since 83% of the government was still operating at the time) and suspend the debt ceiling until February. That bill cut no federal spending, it cut no taxes, it put no limits on social welfare programs or corporate welfare subsidies, and no delay or limits on Obamacare implementation. What it did do is add a $2.1 billion earmark for a dam project on the Ohio River, and funding for other pork barrel earmarks.
John Pickerill is the Montgomery County Republican Party Chairman. His column is part of a series of columns that appear in The Paper of Montgomery County on Mondays from public officials.
Our Congressman, Todd Rokita, was among the 144 House members who actually understands fiscal responsibility, and voted against this abomination. And for that they, and the Tea Party in general, were attacked relentlessly in the media. It is almost surreal. Only in America today can the ones who want to balance the budget be labeled "terrorists," and those who want to raise the debt ceiling and spend without limit be called "reasonable."
But the laws of math and economics don't care about public opinion polls. Here is the reality of our situation today: In 2012 federal government brought in $2.7 trillion, but it spent $4.0 trillion.i So it added this $1.3 trillion deficit onto the pile of national debt, which now stands at $17 trillion. The interest payment on that debt is $415 billion.ii So now that Congress passed that bill and did nothing to cut spending, the national debt will probably grow another $1.3 trillion by the end of next year. The debt keeps growing bigger, and so the interest payment keeps growing bigger. At some point, it will take every tax dollar the government brings in just to make the interest payment, with nothing left over to pay Social Security, Medicare, Medicaid, Food Stamps, veteran's benefits, defense, or anything else. That would be a 100% shutdown.
In reality, before we'd reach that point, the government would pull an ace from their sleeve. A hundred years ago Congress gave the Federal Reserve Bank the power to counterfeit, ... uh, I mean, create,... new money. So the Fed would simply "print" the extra $4 trillion needed and loan it to the U.S. Treasury. The problem with creating massive amounts of money is it causes the price of everything to go up quickly. At the same time, what wouldn't go up much is your Social Security check or pension check or most people's paychecks. That check will buy less and less, as government creates more and more new money.
Rokita and other fiscal hawks in Congress like Justin Amash (Mich.), Thomas Massie (Ky.), and Rand Paul (Ky.) have shown moral courage by voting against this fiscal insanity. Their course of action tends to solve the long term problem. Their critics, on the other hand, have provided no viable long term solutions. That bill that passed on Oct 17 provided no permanent fix. We only have until January before funding for the federal government runs out again. In February the debt ceiling goes back into effect. The only real fix is to cut spending and balance the budget as soon as possible. Either way, the laws of math and economics will exact their pound of flesh for our decades of deficit spending. We can either plan for it in an orderly way, or continue to do nothing and wait for it to happen like a bursting dam.
i. Financial Statements of the United States Government for the Years Ended September 30, 2012, and 2011, http://fms.treas.gov/fr/12frusg/12stmt.pdf; ii. TreasuryDirect, "Interest Expense on the Debt Outstanding," http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm