Monday, August 1, 2011

Debt Ceiling? We don't need no stinking Debt Ceiling!

The latest news out of DC is that Congress & the President have finally come to broad terms on a debt limit increase. This will be the 79th time in our history we've raised the debt ceiling, which until this past few months has always been a formality.

Why do we even have a debt ceiling? Well, it made some sense when it was instituted in 1917. At that time Congress did not have discretionary control of the federal budget - the president did. The Congress had broad powers about how much to spend and how much to tax, but the specifics were largely left to the president's priorities. That's no longer the case. It hasn't been since 1974 when Congress first began writing full budgets with line items for every spending appropriation and every form of federal revenue. Since that budget 37 years ago, Congress has done the same thing every year. And since that time the debt ceiling has been obsolete. The ceiling is no longer a curb on the president's ability to over-allocate resources, but now represents an artifact of a bygone era.

The rational course of action, of course, is to terminate the debt ceiling altogether, because now the fox is guarding the hen house. Congress appropriates the spending and raises the debt ceiling whenever they over-spend, which they usually do. The president's only role in all of this is to authorize spending that's already been approved by Congress.

I hope you see the absurdity of this ... Congress has approved spending and now must raise the debt limit, because the government cannot currently meet the obligations that Congress mandated. And Congress is refusing to do so unless the President agrees to cut spending.

The thing of it is, we can't not raise the debt ceiling, because the money has already been allocated. It's already been promised and according to the 14th amendment the federal debt shall not be questioned - meaning we are required to always pay our bills. So if for some reason this latest "deal" fell apart, the president could rely on the constitution to defend his decision to continue paying our debts. But instead, the Great Compromiser has agreed to bend over backward to slash spending in order to placate a fringe group that's got much of the House by the balls. I guess the Tea Partiers only agree with the Constitution when it agrees with them. Those pesky amendments were clearly mistakes.

So the plan that's been broadly agreed upon looks like it'll cut $1T to $2.4T over the next 10 years. It'll also establish a "Super Congress" (where is that in the holy Constitution?!) that will be authorized to find ways to slash spending and narrow the federal deficit. Notice all the focus on cutting spending ... almost no talk of raising taxes. This, of course, is because taxes are unpopular and everyone in DC is a child when it comes to responsible governance.

I don't argue that we should not find and eliminated inefficiencies in federal programs. No doubt that we should. But attacking programs vital to the working classes is not acceptable when there is enough waste in the system in defense and tax breaks for the wealthy to cover virtually all of our current budgetary shortfalls.

Unemployment stands at 9.2% according to the latest figures. That's still the official unemployment rate. Word is unofficial unemployment is still above 16% of all able bodied, working adults. The additional 7% represents those long-term unemployed. They've lost their unemployment benefits and are now unemployable, because employers have a strong bias against hiring the unemployed. So nearly 1 out of every 6 working age Americans is out of work. Think about that for a moment. 1/6th of our labor force is performing no productive labor - at least according to how we currently define productive, but that's another story.

And rather than tackling unemployment through direct spending as we did in the 1930s. Rather than extending benefits to those most in need. Rather than finding ways to create jobs, Congress has spent the past several months trying to find ways to reduce the size of the government, which will no doubt, cost thousands of federal employees their jobs. Where are they supposed to go work? You know where they'll go? They'll go on unemployment and they'll be scraping by and losing their houses while not being productive.

This entire debacle was self-created. There is absolutely no rational reason for this crisis. We've doused ourselves in gasoline and now we're trying really hard not to light that match in our hand. Idiots Rule. Unabated.

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