Our Nation Faces a Debt Crisis. Here's How to Fix It.

Perry Johnson May 23, 2023

There are a few moments in history that require specific actions, and if they’re not taken, things can spiral out of control rapidly.  Two troubling problems we face as a country are intersecting at one moment in history — the pervasiveness of career politicians and their addiction to out-of-control spending.  In effect, they buy their way into office then stay there by robbing you, your children, and your grandchildren through untenable debt.

Let me share with you what I believe: Our debt is not sustainable, our spending is out of control, and both parties are responsible for today’s economic crisis playing out in Washington. It will take a political outsider and a realistic plan, like my ‘Two-Cents To Save America,’ to fix our borrowing problem and ultimately save America from a downward spiral.  The Biden White House is lying to you when they say that a fight over the debt ceiling and potential spending cuts are putting our economy at risk, or that we are risking the devaluing of our dollar.  The reality is that what’s causing the risk and devaluing are THEIR actions........America is going down a path it cannot continue to follow. We are drowning in debt, spending more than we ever have, and making decisions that would bankrupt any family. .........

The Pentagon regularly failed audits and cannot account for trillions of dollars. The Department of Education, with its $175 billion budget, helps spread woke ideology while our children fall behind in basic subjects like reading and writing. We pay and reward people not to work, after locking down schools and businesses...........We need the government to go on a diet, and this would do that effectively. If we spend just two cents less, we can balance the budget......To Read More....

My Take - The first thing that needs to be done is dismantle all these Departments, agencies and bureaus, and that's done by slashing their budgets until they hit zero.  Repeal the 16th Amendment, that will pretty much eliminate the IRS, and the billions of dollars it costs just to maintain them.  As of 10 years ago the government of the United States has assets of 150 trillion dollars, and it's high time those assets were sold, including the approximately 24% of the land mass of the U.S.

 

Biden Threatens Major Constitutional Violation on Debt Ceilling

Even seriously considering it is an open and shut impeachable offense. 

May 10, 2023 by Daniel Greenfield 5 Comments

The most radical administration in history isn’t extreme because Joe Biden. Biden doesn’t believe in anything, he’s just turning whichever way the extremists who run his administration swing him. They keep pushing him to extremes and now he’s contemplating one of the biggest violations of the Constitution imaginable.

Dems have two endgames for refusing to negotiate on the debt ceiling so they can continue pushing inflation higher by burning through more money, the first is ‘minting a trillion dollar coin’ and the other is having Biden just continue to spend money while insisting that he’s authorized to do so by the Fourteenth Amendment.

The Fourteenth Amendment concerned civil rights and included a mandate protecting payments made during the Civil War from a future possible Democrat congress. That part was dubious, but it certainly does not override the Constitution’s separation of powers which allocate the power of the purse to Congress............To Read More....

“Prioritization” and Debt Limit Nonsense

January 22, 2023 by Dan Mitchell @ International Liberty

Back in 2016, here’s what I said about the debt limit during some congressional testimony (and I made very similar points in some 2013 testimony).

Near the end of my testimony (about 4:55) I discuss “prioritization,” which is what would happen if the debt limit is not raised and the Treasury Department has to decide which payments are made (and which payments are delayed).

I then pointed out that federal tax revenues in 2017 were expected to be 11 times greater than annual interest payments.

As such, there obviously would have been plenty of cash available to make interest payments, as well as to finance other economically or politically sensitive items (I assume, for instance, that Treasury would have prioritized monthly Social Security benefits as well).

Would this have been messy? Yes. Would it have been uncharted territory not covered by the law? Yes. But would it have been better than default, which would have caused turmoil in financial markets? Another yes.

Which now brings us to the present day. We’re now in another debt limit fight, so I decided to look at the most-recent data from the Congressional Budget Office to see whether the federal government will still have plenty of cash so that interest payments on the debt can be prioritized.

Lo and behold, annual tax revenue this fiscal year is going to be more than 11 times greater than annual interest payments. Just like in 2017.

In other words, we presumably can sleep easy. There’s plenty of money to pay interest on the debt.

There would only be a default if Joe Biden or Janet Yellen (the Treasury Secretary) deliberately chose not to prioritize. And the odds of that happening presumably are way below 1 percent.

Some people may wonder why we should accept even that small risk? Why not simply increase the debt limit so that the odds of a default are 0 percent?

That’s a fair point, but it must be balanced by the recognition that the United States is on a path to long-run economic and fiscal chaos. So I can also understand why some lawmaker say the debt limit should only be raised if accompanied by some much-need spending restraint.

And, for those who care about real-world evidence, that’s what has happened in the past. Indeed, Brian Riedl notes that it’s the only plausible vehicle for altering the nation’s fiscal trajectory. 

I’ll close by expressing pessimism that House Republicans will achieve anything in the current fight over the debt limit.

We won’t get something really good, like a spending cap. But I start with very low expectations, so I guess I’m happy that Republicans are at least pretending to care once again about excessive government spending.

A journey of a thousand miles begins with a first step!

P.S. I partially disagree with Brian Riedl’s list. The 1990 Bush tax increase was not a “deficit-reduction law.” And it was post-1994 spending restraint that produced a balanced budget, not Clinton’s 1993 tax increase.

P.P.S. Remember that debt is bad, but it should be viewed as a symptom. The underlying disease is excessive government spending.