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.”
The horror.
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.
Attempting to justify the evident hypocrisy between his actions as Senator and President, Obama would later say that his stand in 2006 was a “political vote,” an action by a “new Senator … as opposed to doing what was important for the country.”
When leadership is needed the most, we find the President playing politics with the debt ceiling again, prophesying destruction while demonizing any who stand in his way. “Panic” is the mode of the moment once more, as it is whenever Big Government finds itself exposed.
Whether it’s fiscal responsibility or civil liberties issues such as renewing Patriot Act provisions, you and I are told we must “come together” to pass whatever the bureaucrats want “for the good of the country” right away, with any discussion over restraining spending or protecting Americans’ privacy to be delayed until after the crisis is resolved.
But the debate never arrives, and we shift from dire strait to dire strait, always with another promise to properly address the issue later. Now, the President demands a debt ceiling hike, assuring congressional leaders he will talk about reform once he gets his way. But what “urgent” matter will ultimately negate that guarantee, as well?
Often, times of crisis offer a chance for change rarely pursued otherwise. Surviving a heart attack or stroke can lead one to finally undertake exercise and a proper diet. Sustained anemic play can result in wholesale restructuring of a sports franchise (as a longtime Raiders fan, I know the need for this well).
But for government, crisis results in doubling down on the status quo.
So what are we to do?
Instead of borrowing billions and trillions more, the President and Congress should come together to discuss immediate cuts to prevent us from hitting the ceiling, and though this move may frustrate insiders, it will build confidence where it is needed most: with the American people, who deserve a government that lives within its means. Let our creditors see we are serious about paying our current obligations and getting our act together. Let our word once again be worth something when we sign our checks.
If Veterans Affairs can burn $562,000 on artwork to use up “excess budget funds,” the Agriculture Department can spend $144,000 on toner cartridges in a single day, and the Federal Bureau of Land Management can pay $98,670 for an outhouse in Alaska, surely we can find some areas to save funds right now.
Senator Obama called for leadership, and now President Obama and Congress have an opportunity to show it. Don’t expect them to take it.