Just say HELL NO, after all “Deficits Don’t Matter”!

WOW, remember the halcyon days just a few short years ago when the Republican controlled Congress easily passed 8 increases to America’s debt ceiling with little or no debate and back when the great sage Dick Cheney told Treasury Secretary Paul O’Neill in 2002 that “deficits don’t matter” – ahhhh, those golden days of our youth!  There are so many glorious high points; back in 2003 Congress raised the debt ceiling “by almost 1 trillion dollars to cover the second round of Bush tax cuts approved by Congress, at $350 billion.  And to cover the President’s Medicare prescription drug bill, projected at $400 billion (but at an actual cost greater then $600 billion).  Bush signed it into law without the revenue to fund it” (from The Washington Spectator from July 15, 2011).  In a mind boggling dereliction of duty, the day the $350 billion tax cut was passed was the same day as the debt ceiling increase, clearly the new “hell no” Republican Party was not in session that day. 

I know what you are thinking, back in those splendid days a Republican was president, but in fact there was a young senator who spoke up deploring the raising of the debt ceiling:  “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure,” the senator thundered. “Increasing America’s debt weakens us domestically and internationally. . . . Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren.”  Of course the young Senator was Barak Obama in an earlier incarnation, before he morphed in to George W. V2 and brought us our current 3^rd term of the Bush administration complete with continued idiotic wars, insane tax policy, corporate welfare, more unfunded mandates and entitlements, same war on terrorism and rising deficits.   

So the question is; are the gates of hell going to open up and swallow us if we do not increase the debt ceiling by 8/2, probably not but the results could be very damaging.   It is important to remember that increasing the debt ceiling has nothing really to do with spending levels.  Increasing the debt ceiling is simply coming up with the money to pay the bills that are coming thru the door, bills that Congress itself approved.  One of the very real dangers in any sort of default no matter how minor is its effect on the interest rate we have to pay to borrow money.  As Bruce Bartlett, a former adviser to President Ronald Reagan and a Treasury official in the George W. Bush administration wrote in the Washington Post today:  “J.P. Morgan recently surveyed its clients and asked how much rates would rise if there was a delay in (debt) payments, even a very brief one. Domestic investors thought they would go up by 0.37 percentage points, but foreign buyers — who own close to half the publicly held debt — predicted an increase of more than half a percentage point. Any increase in this range would raise Treasury’s borrowing costs by tens of billions of dollars per year.”

So at the end of the day this is not the stupid game of chicken that the tea party morons seem to think it is.  It is also not about taking a stand on debt, as this is money to pay the credit card bill for the stuff we already charged.  This August 2^nd “deadline” is an important line in the sand, do our elected officials have the intellect and guts to start down that road to more fiscal sanity.   The American people are simply asking our elected officials to do what millions of Americans have been doing (and struggling with) over the past 2 years; control spending, lower debt and live within our means.