Mere months after President Obama and Congress last tussled over the debt ceiling, the United States has once more reached its legal borrowing limit. But it still needs more. The Wall Street Journal reports:
The U.S. government was just a hair below the $15.194 trillion debt ceiling on Tuesday, $25 million shy of the limit Congress set last summer. President Barack Obama sent a letter to congressional leaders Thursday, saying the U.S. debt was within $100 million of the ceiling “and that further borrowing is required to meet existing commitments.”
The “further borrowing” required to meet our commitments will amount to another $1.2 trillion, if the Treasury Department and the president get their way. And if they don’t? Again, from the Journal:
The practical implications of failing to raise the debt ceiling are pretty severe, according to government officials and market analysts. The government can only borrow money up to the limit, and because the government spends more money than it brings in through taxes and other receipts it is constantly running up the debt. Failing to raise the ceiling would mean the government would have to make severe cuts in spending to avoid defaulting on debt obligations.
So we are faced with an insoluble dilemma, which goes something like this: Default on the debt and inflict tremendous economic pain now, or keep borrowing and inflict even worse economic pain in the future, because, let’s face it, you can’t borrow forever. And what can’t go on forever will, as the saying goes, someday stop.
The problem is that some people, a lot of people, believe that there is no reason borrowing can’t go on forever. This notion that debt is inherently benign, or that its dangers are overblown, is a deadly meme that has penetrated the brains of a large number of elites in the governing and professional classes. You find it mostly on the left (I saw some liberal talking head spouting this nonsense on cable TV the other day), but also on the right, as when Dick Cheney once foolishly remarked that “deficits don’t matter.”
How could such a deadly meme take root? Easy — though it is poison to the nation, it has been very beneficial to the careers of individual politicians of both parties, who have have used borrowed monies to dispense favors to preferred voting blocks in the (usually successful) hope of buying loyalty for the next election.
It is the big, structural flaw in the heart of democratic government that was well-known even to the inventors of such government; the Greeks and Romans fretted over this flaw and endlessly debated how, or even if, it could be corrected. They never resolved the matter and sure enough, the ancient democracies and republics soon passed into history, tyrannies rising on their corpses.
How ironic that Greece, once again, is showing us the consequence of the road we are on. The Washington Post reports that in “deeply indebted and nearly bankrupt,” Greece, parents are abandoning their children “because of the deepening financial crisis”:
Athens-based Ark of the World, a nonprofit group that takes care of youth, says children as young as newborns have been left at their doorsteps. One parent left her 4-year-old girl at the center with a note that read: “I will not be coming to pick up Anna today because I cannot afford to look after her. Please take good care of her. Sorry.”
A nation that is abandoning its children is abandoning — literally — its future. This is the inevitable end of a road built on little more than IOUs.