Listening to some politicians and pundits, the sky will fall on Aug. 2. That’s the date Chicken Little says the U.S. is supposed to go belly up financially unless Congress raises the debt limit.
Many Democrats and some Republicans contend the U.S. will default on its debt unless the limit is raised. Other Republicans say that’s not the case, but will likely vote to raise the limit anyway because that’s what so many of them do, act like Democrats when it comes to other people’s money.
The fear mongers — on the left and right — say the country will no longer be able to make payments on what it already owes —$14.3 trillion — unless it borrows more. Conceptually, this is akin to a person maxing out on credit cards and taking out another card to get a cash advance to make payments on the first card. People don’t get out of debt that way; they just get in deeper and deeper. The same is true for countries.
Yet there are a few in Congress who say defaulting on the debt can be avoided without raising the debt ceiling or increasing taxes. What’s needed is to prioritize spending. This is the same thing a family would have to do under similar situations.
The country takes in roughly $2.8 trillion in taxes every year. That’s a good amount. The problem is that between the welfare state and the warfare state, according to the Office of Management and Budget, the country spends $2.73 trillion annually on Social Security, national defense, Medicare, income security programs, Medicaid and SCHIP, and unemployment benefits.
That doesn’t count interest or principle on the current debt or the fact that all other government spending — another $1 trillion or so to actually run the government — is based on borrowing.
Of the six areas mentioned, only defense spending is constitutionally authorized. Yet, the Constitution has never authorized the country turning into an empire. How much of Pentagon spending is for actual defense? Wars in Iraq, Afghanistan, Pakistan, Yemen and Libya are not defensive wars, they’re offensive and imperial in nature.
Also not authorized is a continued military presence in places such as Germany, Japan and Italy, countries we defeated in a war that ended 66 years ago. Our defense is not dependant on maintaining military forces in Thailand or South Korea either, or in having at least 700 installations in an estimated 130 different nations.
But you can’t blame just the military spending. Welfare programs are eating us alive, too, and the money will run out unless they’re reined in. Just because they’re warm fuzzies with good intentions doesn’t mean they’re viable or even good in the long run. Those programs may help a few in the short term, but they breed dependency on government.
Consider Greece. There’s no great military outlay by the Greek government, but people have been rioting there because the government can no longer fund its welfare state. Other European nations are close on the heels of Greece and the U.S. will follow, too, unless our country gets its financial house in order. We are approaching a debt that’s equal to 100 percent of GDP.
Raising taxes won’t cut it. There are 1,200 billionaires in the world with a total net value of $4.5 trillion. If the U.S. confiscated all that wealth and applied it to the debt, the country would still be $10 trillion in debt, the same as it was when George Bush left office. And that was already way too high.
It’s time to cut the spending, stop the borrowing and pay off the debt, so there’s no fiscal sword hanging over the heads of people who just want to live their lives.
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