Brummett:We must increase debt ceiling or disaster will occur (Part 4)

John Brummett in his article “Dear visa, my debt ceiling is capped,” April 25, 2011, Arkansas News Bureau, he observes:

The first thing I intend to do is join the tea party. Then I’m going to refuse to raise my debt limit. Then I’m going to call the Visa people.

“Y’all have me down here owing $6,000,” I’m going to say. “But I’ve become a fiscal conservative. I’m getting really disciplined fiscally. I’m taking my household back.

“My self-imposed debt ceiling is $4,000. I’ve opted not to raise it. Nary a cent. I only went over it because the oral surgeon demanded immediate payment.

“So $4,000 is the most you rascals will get out of me. You may as well quit compounding the interest on this outstanding balance. I am serious about this. You may consider this baby capped at four grand.

“Oh, by the way: Don’t even think about canceling this card. I have a second round of dental work coming up and the oral surgeon doesn’t give these implants away.

“Thank you, and remember: Vote Palin-Bachmann.”

You are thinking this is absurd. You are right, of course.

But you are not intellectually entitled to call it absurd if you are among the seven in 10 Americans telling pollsters you don’t want the federal government’s debt ceiling raised. You are not intellectually entitled if you are one of these right-wing politicians pandering to this tea-drunken grandstand by threatening to vote not to raise it.

Here is how real fiscal responsibility works: You repay the debt that you have incurred to date. You make spending reductions prospectively by showing sufficient discipline to reduce the future pace at which you incur debt. You dare not let your existing debt go unpaid lest your credit score suffer and you get denied the next time you find yourself in a bit of a pinch and need to finance a refrigerator at Sears.

Michael Tanner made some great observations in his article “Debt-Ceiling Myths,” National Review Online, May 11, 2011. 

Michael D. Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution. Here is a portion of this recent article: 

Now that Osama bin Laden has been successfully dispatched to the eternal damnation he so richly deserves, Washington is ready to return to the more mundane question of whether the Obama administration will be allowed to spend this country into oblivion.

The next big fiscal fight will be over when and how to increase the debt limit. The administration has been hard at work trying to shape the message and public opinion. Unsurprisingly, much of that message is less than 100 percent accurate. Here are some myths about the debt ceiling and the upcoming debate about raising it:

1. Failure to pass means defaulting on our debts. If there has been consistent message from the White House, it that the United States can’t afford to “default on our debts.” That is almost certainly true. However, refusing to raise the debt limit does not mean defaulting on our debts. The U.S. Treasury currently takes in more than enough revenue to pay both the interest and the principal on the debts we currently owe. And if the Obama administration is truly worried about whether it will do so, then it should urge Congress to pass the legislation proposed by Sen. Pat Toomey (R., Pa.) requiring the Treasury Department to pay those bills first. It is true that, once we had paid our debt-service bills, there wouldn’t be enough money left over to pay for everything else the Obama administration wants to spend money on. The government would have to prioritize its expenditures — sending out checks for the troops’ pay and Social Security first. Other spending would have to wait. Treasury Secretary Tim Geithner says that not spending money Congress has appropriated is “the same as default.” It is not. It is economizing, which is what you do when you are out of money.

 

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