Thursday, April 14, 2011

Maybe I Didn't Understand . . .

I was watching the Beck show the other evening listening to a conversation between Congressman Rangel (D-NY) and Judge Napolitano. When the subject of the national debt limit came up, I thought I heard Mr. Rangel say something like Congress has to raise the debt limit in order to borrow the money needed to pay the interest on the existing debt. I did a double take. Borrowing more money to pay for past borrowing? Maybe I didn't understand him correctly, but that's what it sounded like.

This morning I heard Congressman Hanna (R-NY) on WIBX. He indicated that congressmen did not want to admit it, but that they would end up approving an increase in the debt limit, and that Mr. Hanna favored doing so as well. Mr. Hanna explained that failing to approve the increase would be like a shopper going on a spree and then refusing to pay bill ... that the country's credit in the eyes of the rest of the world would suffer. Maybe I didn't understand him correctly because I was driving to work at the time and minding the traffic... but that's what it sounded like... It also sounded similar to what Congressman Rangel said.

Joseph Farah must have heard the same narrative out of Washington. In an Open letter to John Boehner on WorldNetDaily he responds:
"Saying no to more borrowing does not mean default on loan obligations."
To any of us with modest incomes "no to more borrowing" simply means to live within our means. Paying for past borrowing is something normal people budget for. If our means do not cover our budget, the budget must be made smaller by reducing planned spending ... but not by defaulting on past loans. That leads to bankruptcy.

Suggesting that the country will default on past loans if it does not raise the debt ceiling and borrow more is simply being irresponsible. How will the interest be paid on the new money borrowed? More borrowing in the future? As Joseph Farah says:
"It's time to stop cutting piecemeal. It is getting us nowhere. It is not responsible to keep borrowing – even if means borrowing less than in the past. You can't fix a debt problem through more borrowing."
But maybe we just don't understand.

4 comments:

Anonymous said...

Congressman Hanna needs to rethink his budget ideas. It seems `as though the congressman just doesn't get it ,he is slowly but surely falling into the business as usual formula that has resulted in the fiscal mess we are now in. The patient needs radical surgery to survive not a band-aid.

RPP said...

The problem with not raisng the debt limit is the size of debt and interest. That is what these Congressmen are saying. To bnring the debt under control and have the money to pay bond holders in one year would require such a drastic cut in Federal spending that the system could not digest it all at once. That is why insuring a halt in future debt accumulation by imposing spending limits that are automatic is the only sensible way to approach the problem.A three to five year program of debt reduction through reducing expenditures to 2008 levels and imposing real pay as you go is a sensible path. At the same time entitlements must be reformed or nothing else will matter.

Strikeslip said...

So I guess what this means is that Congress not only (1) budgeted to spend more than its income, but (2) budgeted to spend more than even its credit limit would allow.

Well WHO has been controlling the budget all these years that this irresponsibility has been going on?

People voted in November for new faces in Congress to end the irresponsibility, but it isn't happening.

The Federal Government has involved itself in our personal affairs and business affairs, and lent its power and authority to those with enough money to buy influence. We did not need the expanded drug program. We did not need the Dept of Education (which has made things worse). Meanwhile, the essential things that only the federal government can do ... like defend our borders and defend the value of our currency ... languish. We have to pay for people who have no business being here because they are illegal. The value of our bank accounts is being stolen because our debt is being monetized -- more money is being printed. And our jobs -- which allow us to pay the taxes which support federal spending -- get exported with trade policies that only make sense to academics who live in a theoretical world.

The public wants the nonsense to stop.

The debt ceiling is the litmus test for the new members.

RPP said...

Yes, decades of the drifting to automatic spending and expansion of government activity and control have brought us to the brink of insolvency. And, most voters and taxpayers helped it along. In this area, do we recall the always elected Sherwood Boehlert, who never saw a spending bill he did not like or support?