Where does all that talk about teachable moments and national conversations go when government refuses to acknowledge that maybe, just maybe, a $28.4 trillion debt in a non-wartime $23 trillion economy is plenty.
Now that it’s the federal government’s turn for “lockdown,” the GOP mustn’t let the crisis go to waste, as the saying goes.
Many conservatives call for not raising the debt limit without reforms. But more than just stopping Joe Biden’s $3.5 trillion families, “build back better” and reconciliation amalgam as plenty of them would like to do, the GOP should be discussing stopping the debt limit increase altogether and substituting spending cuts. Biden today hosted an alarmist panel demanding bipartisanship on averting debt limit default with JPMorgan Chase CEO Jamie Dimon and Treasury Secretary Janet Yellen. While billed as a meeting with business leaders “on the Need to Immediately Address the Debt Limit and the Damaging Consequences for American Families, Small Businesses, and the Economy If Unnecessary Delay Continues Any Further,” each and every one left the spending-restraint half of the bipartisanship equation out.
In Biden’s October 4 speech on raising the debt ceiling he proclaimed “Raising the debt limit is about paying off our old debts. It has nothing to do with any new spending being considered. It has nothing to do with my plan for infrastructure or building back better. Zero. Zero.”
The intent in all this is to blame Republicans for a “default,” and many news stories lend support by dutifully proclaiming that the debt limit increase is to cover “prior commitments,” bills we “already owe” or some similar phrase, such as repeating how the Treasury Department “has warned money would run out to pay past bills.” Each carefully notes that Republicans took part in the racking up of debt.
Meanwhile, accusing Democrats of a “reckless tax and spending spree,” Senate Minority Leader Mitch McConnell sent a letter on October 4 reminding Biden that Democrats can raise the debt limit themselves with a simple rather than supermajority vote by embedding it in the very same reconciliation process they’re employing for the broader Biden spending agenda being advanced with no bipartisan support. Biden, naturally, wants Republican fingerprints on a debt limit increase, anticipating that future Republicans will protect elements of the progressive agenda — as they have done in the past — as the passage of time renders them as fixed as the stars — and Medicare and Social Security.
Biden accused Republicans of putting the “full faith and credit of the United States” at risk. Both sides accuse the other of playing Russian Roulette with the economy. The pressure Biden brought to bear today with Yellen, Dimon and others caused McConnell to agree to a temporary, fixed-amount debt extension, kicking things down the road a few weeks.
But let’s get real. As the meme goes, if taxes are still being withheld from your paycheck, the government isn’t shut down; and it means the Treasury still has a monthly “income” of taxes and fees that it can prioritize, just like the rest of us have to do in our daily lives, and thereby can still cover interest payments to service debt and prevent bond default. The only way that wouldn’t happen is if sabotage or a resurgence of “#resistance” occurs, which cannot be ruled out given a regime floating the radical notion of a trillion-dollar platinum coin to get around the necessity of Democrats approving the increase without Republican support, or working to slash outlays. Sen. Patrick Toomey (R-Pennsylvania) said in September that, given the adequacy of tax revenue, “There’s absolutely 0.0% chance that anybody wouldn’t get coupon and principal payments on U.S. debt securities on time.” and that there “would be a prioritization — the Treasury doesn’t like to talk about it, but that’s only because they are afraid that increases the chances the debt limit doesn’t get raised.” Toomey has long pointed out the same reality in prior debt limit debates.
John Tamny, author of Popular Economics and Who Needs the Fed, has for years made similar arguments, as well as noting that as far as genuine default goes, the federal government pays its obligations with devalued dollars all the time, so the handwringers don’t actually care about default; its just a matter of which group of people has things done to it.
For non-securities obligations, we can of course change “what we already owe” and prioritize. Many Americans routinely realize things aren’t affordable or needed anymore, and scale back. Alongside the Treasury talk and action on “extraordinary measures” to prevent default, the approaching deadline presents the opportunity for the GOP to present priorities, and for it to be the one insisting on bipartisanship instead of Biden and Yellen. While lifetime paid-into entitlements will undoubtedly be prioritized, perhaps federal contractors who, like the government employees that missed their haircut during Covid, may not be. Things largely continued as normal for Americans during 2019’s 25 percent government shutdown, calling into question some of the other unexamined 75 percent as well. A media unmoved by normal people being thrown out of work by Covid lockdown were upset that an IRS employee inconvenienced by the 2019 shutdown had to eat meatless chili.
There’s unspent Covid funding that could be repurposed and used for interest on debt. There were unfulfilled exercises in executive branch streamlining undertaken during the Trump administration to consolidate, de-dupe and streamline at regulatory agencies that could have their day in the sun right about now. The post-Afghanistan Pentagon budget presents boundless savings potential, and also a lesson about refusal to say the emperor has no clothes with respect to the folly of “forever war.” Biden’s agenda — amounting to the declaration of domestic forever wars encompassing what the left calls “investments” in child care and universal pre-kindergarten, health care, college, housing and much more — is likewise “nude” in the sense of being highly debt-inducing in its fusion of normal household obligations with government, and its costly planks like climate interventions. Where normal infrastructure serves human beings; Biden’s “human infrastructure” serves government overseers. Biden is still not even done with endless war overseas, given his United Nations appearance calling for “using the power of our development aid to invest in new ways of lifting people up around the world; of renewing and defending democracy,” as well as of addressing the “borderless climate crisis.” But unlike the hindsight of Afghanistan, Biden’s “build back better” can be abandoned before it begins, leaving no weapons or swath of destruction behind.
Read the full article at Forbes.