Here we go again. According to Treasury Secretary Tim Geithner, the U.S. government will be unable to service its debt past Aug. 2 if the current $14.3 trillion debt ceiling is not raised. The president says that the government may not be able to make Social Security payments in August. He also wants us to eat our peas. Meanwhile, Republican congressional leadership is pushing for what it characterizes as trillions of dollars of spending cuts — over 10 years.
I, for one, am sick of this hogwash. We desperately need to have a genuine discussion of the appropriate size and role of government, but it does not look like that is going to happen. All we get are headline-grabbing quotes, when what we need is methodical analysis — and decent math skills.
Let’s first turn our attention to the Republican leadership and its math skills — or lack thereof. Do you remember back in April of this year when the debate was about the spending resolution and the GOP leadership promised $100 billion in spending cuts this year? Well, of course, they had to prorate that amount since only a partial year was left, so they pushed for $61 billion in cuts and settled for what they said was $38.5 billion in cuts, though the Congressional Budget Office issued a report almost immediately saying it was really $352 million in cuts. On later reflection, the CBO decided that it was actually a $1.3 billion increase in spending.
This is the same Republican leadership that criticized Paul Ryan for daring to propose Medicare, Medicaid and Social Security reform too close to an election. Here is a news bulletin for the GOP leadership — congressional elections occur every two years. Under your theory, we can never discuss this problem that threatens to bankrupt us all, because an election is always too close.
The administration’s skills are no better. The government takes in about $200 billion per month. Interest payments are $15 billion to $20 billion per month. Social Security payments are $49.2 billion per month. Active troop pay and Veterans Affairs benefits run $5.8 billion per month. Medicare and Medicaid total $50 billion per month. According to my calculator, all these items can be paid with money left over, even if the debt ceiling is not raised. Certainly, there would not be money for all items that have been appropriated beyond these, but Armageddon is hardly at the door. The bottom line is that the government can pay its debt, pay Social Security, pay our troops and veterans, and pay a lot of other things without raising the debt ceiling.
Both sides need to quit talking about cuts over 10 years. I do not care what you claim you are cutting in 2019. When the time comes, you won’t do it anyway, so this is just so much baloney. Tell me what you are going to cut this year, next year and, maybe, the following year. At least we can hold you accountable on these.
And the administration can also dispense with the class warfare rhetoric. It has apparently not noticed that to create jobs, you have to have employers.
Adding insult to injury, these shenanigans contribute to the bad economy. There is nothing a business hates more than uncertainty. If you want more jobs and an improving economy, the recipe is simple: low taxes, restrained regulation and predictability. These financial sideshows undermine all of that.
So is there hope? Sure. Some members of Congress, like Ryan, Marco Rubio and Michele Bachmann, understand all this, but they are drowned out, not just by their opposition, but by the leadership of their own party. The entire band needs to start listening to economic experts rather than media consultants.
All of this can be addressed in a logical fashion. For once, I agree with Warren Buffett: “I could end the deficit in five minutes. You just pass a law that says that any time there is a deficit of more than 3 percent of GDP, all sitting members of Congress are ineligible for re-election.”
Buffett’s approach may be right or wrong, but it is clear that we will not get better until We, The People, demand it and settle for nothing less. It is plainly up to us.
“The price of Freedom is eternal vigilance.”
Rick Akin is an attorney practicing in Steamboat Springs, Denver and Austin, Texas, a former member of the Steamboat Pilot & Today Editorial Board and vice chairman of The Steamboat Institute. He holds a Bachelor of the Arts in Letters from the University of Oklahoma and a doctorate from the University of Texas.