It is now close to three full months since the government hit the national debt limit of $6.4 trillion and has not been permitted to borrow. Almost a full quarter since the credit card was suspended on February 20, 2003 because it was maxed out.
Naturally, the government didn’t want to show economic weakness during the invasion campaign and it looks like the Fourth Estate was told to keep quiet about what was happening. Even today, the so-called watchdogs are acting like running out of credit is something that just occurred yesterday instead of three months ago.
The real question is why Congress and the Bush administration did not perform their semi-automatic increase to the debt ceiling before or shortly after reaching the limit. In the past, this has been an easy task usually with some small amount of political posturing but sometimes without any fanfare at all because it’s simply piggybacked on some other popular legislation just like other pork.
Remember that when it comes to raising revenue and managing money the government has only three options: (1) raise taxes (2) borrow from investors or (3) cut benefits. Of course, they can do any combination of the three. We’ve heard this time and again from leading economists and the government itself. It’s also the same choices the poor dears will be forced to make if they must ever turn to the empty and false Social Security trust funds.
Well, since February 20th the government has not (1) raised taxes and is, in fact, talking about reducing them and (2) the government has, for three months, been prohibited from adding new debt. That leaves only (3) cutting benefits—and that’s exactly what has been going on for three months.
Every State, City, and local government in the nation is suffering shortfalls in promised federal money. Local governments have been biting the bullet and forcefully learning to get by without elements of the federal government’s fiscal 2003 budget for education, agriculture, block grants, Medicare payments to hospitals, even homeland security and all of the other parts of budgeted discretionary spending. The money has gone to support the invasion of Iraq. (See: New York Times article of May 8, 2003)
Will the government raise the debt limit and open the borrowholic’s spigot once again? Of course they will. They’ve always done it and they will eventually do it this time and the next time, and the time after that, again, and again, and again.
Once credit is re-established, the national debt will leap at least $100 billion in practically no time as Bush makes up for lost time.
The only real question is why did they wait so long? What purpose was served by delaying the inevitable? Was the federal government actually thinking about biting the bullet and living within their constant flow of personal and corporate income taxes received daily plus the surpluses they steal from entitlements like Social Security?
Were they actually trying to “balanced the budget” as promised by the Balanced Budget Act of 1997 which, ironically, picked the year 2003 as the year the federal government would be able to do so? This was a popular 1997 bill that also piggybacked raising the old debt ceiling to $5.95 trillion thanks to John Kasich (R-Ohio), head of the House Budget Committee, who snuck it into the back pages.
Or has the government set out to teach states, cities, and local governments a lesson? To make them realize exactly how dependent on the federal government they’ve become. Was Bush simply flexing his muscle? Or has he been out to punish them for not sitting back, shutting up, and waving their flags like good citizens instead of coming out with resolutions against the Patriot Act?
Can you come up with a logical reason for the delay? After all, the debt limit was made law in 1968 simply as a futile attempt to make the federal government live within its means, balance the budget, and not plan budgets beyond expected income. It has never worked, never.
One of the reasons it always fails is that the debt limit was supposed to make it embarrassing for politicians to stand before Congress and ask for an extension to the credit card. Have you ever known an elected official who is afraid or embarrassed to ask for money? Begging for money is a prerequisite for their job.
Republicans and democrats alike have absolutely no compunction whatsoever about adding debt for you, your children, and your grandchildren to someday pay off.
But you can take heart in the fact that 43 percent of the national debt is fraudulent, worse than anything done by Enron and other private sector companies, and could theoretically be written off tomorrow without consequence to anyone but the Beltway Bandits. I’ll explain this in the next article, tentatively titled “$2.7 Trillion Scam.”
“Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact.”