“Sadly, too many politicians in Washington lack the courage to do something to fix our problems. They are worried about the political implications of making the hard choices we so desperately need …”
Matt Salmon
On January 19th, the Federal Government reached its authorized borrowing limit, a staggering $31.381 trillion. Technically, the Government ran out of money to pay its obligations. However, everyone is still getting paid only because the Treasury is using what it calls "extraordinary measures" to juggle its assets to provide needed cash.
But by summer, there will be insufficient liquidity to pay bond holders and other secured creditors for loans obligations; military personnel, millions of federal employees, and pensioners; or fully-fund Social Security, Medicare, Medicaid, and other entitlement program beneficiaries. Further, there will be an inability to pay for government suppliers and contractors.
Should the U.S. default on its obligations, unpaid creditors would be under enormous pressure from their own creditors, setting off reverberations in credit markets worldwide … not to mention the hardships placed on millions of Americans.
And what is the solution from Congress … a predictable game of political “chicken.”
Republican’s debt ceiling quid pro quo requires material, unstated spending cuts, most likely to impact middle- and lower-income Americans and later lowering taxes overwhelmingly benefiting large corporations and upper-income families.
Meanwhile Democrats propose raising taxes on those earning over $400,000 annually while continuing to significantly expand social and other domestic programs.
Each party will roll out overly-optimistic ten-year projections showing their plans will balance the budget and reduce the federal deficit … pandering to frequently naive voters seeking simple solutions to complex problems they do not fully comprehend.
The reality … these self-serving politicians know, or should know, increasing spending while reducing revenue is a one-way highway to national insolvency!
If members of Congress had any political courage and cared about the country more than themselves, they would be honest and tell their constituents there is no easy fix; defense, national security, entitlements, and social programs cost money and increased taxes, modifying some entitlement revenue streams and benefits, and shrinking some popular domestic programs must be part of any viable solution. Congress and the Administration must also eliminate “off-the-books” accounting techniques used to disguise violations of legal spending caps.
Next time Americans go to the polls, perhaps they should ignore the meaningless and unrealistic campaign rhetoric and vitriol which permeate most campaigns and take to heart Jeff Fitzgerald’s admonition; "You need the commitment of people that aren't worried about the next election, who are going to do teh right thing and worry about the next generation. It's called political courage."
