On Thursday, Treasury Secretary Jack Lew gave his latest spin on the debt ceiling, appearing in front of the Senate Finance Committee to plead with members to raise it.
“If Congress does not act,” Lew warned, “and the United States suddenly cannot pay its bills, the repercussions would be serious.”
Lew and his fellow cheerleaders for more debt fail a chief test of sound economic policy by ignoring the obvious: the United States already cannot pay its bills.
I can give you nearly 17 trillion reasons why our nation has been in default for a long time.
By its very nature, raising the debt ceiling means acknowledging our inability to make good on the checks we’ve written. The only way to pay Peter is to hope Paul does us another solid.
During Lew’s testimony, common sense briefly fought its way to the fore.
If the ceiling is not raised by October 17, and the federal government loses its borrowing authority, Lew noted, “we will be left to meet our country’s commitments with only the cash on hand and any incoming revenues.”
Imagine if we had entertained such crazy thinking long ago.
We find ourselves in a situation where it’s simply impossible to sustain a federal government this large without either the Federal Reserve creating money out of thin air or relying on the shaky kindness of strangers.
And for daring to question this system, limited government activists are considered the “radicals”?
I must pause to praise freshman Senator Barack Obama for standing on the Senate floor on March 16, 2006, to say, “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. … I therefore intend to oppose the effort to increase America’s debt limit.”
Though Senator Obama and I certainly would have disagreed on what to fund and at what levels to avoid increasing our debt, he nailed the key point. Raising the debt ceiling is a failure of leadership. As the Senator argued at the time, “Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren.”
Not only are future generations going to pick up the tab, but the burden of out-of-control government falls hard on all of us right now, as skyrocketing prices, limited opportunities, and denied dreams demonstrate.
Unfortunately, that’s as far as my praise can go.