My Turn: Why debt ceiling shouldn't be raised
Published 12:00 am Sunday, July 17, 2011
By Steve Pender
Almost everyone agrees. The debt ceiling must be raised. Otherwise, our country will default, creditors won’t be paid, and we’ll lose our No. 1 credit rating. Interest rates will soar, and unemployment will skyrocket. The current ceiling expires soon. Like a maxed-out credit card, we need a higher credit limit.
So why do some people (like myself) still insist that the debt limit should not be raised? First of all, we won’t default on our loans just because we don’t borrow more. We still bring in around $2 trillion a year in revenue, enough to keep the country going. But things would get rough for a while. Raising taxes or not raising taxes isn’t important for this discussion; the amount of revenue, if any, from higher taxes would only be a few billion dollars. We owe $14 trillion-plus.
Let’s start with what has happened in just the past year. We seem to have reached a “tipping point.” Last year, we borrowed $1.5 trillion, give or take. In this same year, we saw ordinary citizens like police officers, teachers and firefighters in several cities striking and protesting, demanding zero cuts in paychecks or benefits (look for this activity to increase in the near future). We’ve seen doctors turning away Medicaid (and soon, Medicare) patients due to lower reimbursement options. Colleges are increasing tuition and slashing grants.
So, if you’ve read the latest articles, watched the mainstream TV media or talked to people you know, the solution seems obvious. Borrow more money to get us through this rough time, and quit playing politics with the economy. Don’t let people suffer just because we don’t want to raise the debt limit. When things get better, we can pay down the debt.
Oh, really? One scenario being discussed is that we should cut the deficit by $4 trillion over the next 10 years. That cuts almost a half trillion per year from our budget. Democrats think it’s too drastic; and many Republicans would settle for even less before caving in to raise the debt ceiling.
Yet even with a $4 trillion budget cut over the next 10 years, we would still add well over $1 trillion each year to our deficit, bringing our debt to more than $25 trillion by the year 2021. This is irresponsible, at best.
There is no way the debt ceiling should be raised. If you disagree, try this exercise before you decide. If you have (or know) a child who is around 8 or 10 years old, look them in the eye while you tell them this:
“I’m sorry, but we have to spend a lot of money right now. We don’t want to give up any of our services or entitlements, so we simply keep borrowing more money. When you’re grown up, ten years from now, your taxes will be at least double what ours are right now, because the government will have this massive interest payment to make each month. You’ll never be able to pay it off; it’s just too big. Also, there’ll be no money for things like long-term unemployment insurance, since you’ll be paying off what we’re spending now. Medicare and Medicaid might still be around, but they won’t cover much. We’re letting them become insolvent; we’re squeezing out every last cent while we can. Forget about things like inner-city health clinics and other freebies. They’ll be long gone.
“There won’t be any federal funds to help you with college either, so hopefully your parents are saving plenty of money now while times are good. They probably aren’t, because times aren’t good, and besides, we’ve quit saving. When you get old enough to have children, classrooms of 60 or 70 kids per teacher will be average.”
After you explain this to your child, write down what you have told them. Put it in an envelope, and save it until he or she turns 21. It’ll make a great birthday present. But first, before you seal the envelope, please add the following note to the bottom of the letter:
“Would you believe that, way back in 2011, there was a greedy, selfish tea party radical who didn’t want to raise the debt limit that year? Go figure.”
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Steve Pender lives in Rockwell.
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