It’s certainly annoying that every vote taken by the United States congress seems to be taken at the last minute, up to the deadline and described by an Executive administration as the result of some kind of crisis and that if the vote is not favorable towards the President, then some kind of catastrophic disaster will be unleashed on our country. Unfortunately, this is where we are as a country and this kind of cycle should have been expected following the election of a community organizer as President.
Perhaps most trying within this ridiculous cycle is the constant adjustment of the message as stated and re-stated breathlessly by our self-considered bettors in the political class. The thinking behind the constant adjustments is based on the premise that the problem with the message isn’t the idea behind it but that the interpreter, the ignorant citizenry, just doesn’t understand then therefore the message must be contorted for the benefit of the unsophisticated. In reality, the problem is the message and the citizens of this country are not as crude as many politicians seem to think.
Examples of contorted messages describing nonsense abound in regard to the raising of our country’s debt ceiling. First, whatever the merits of the debt ceiling, it’s basically pointless as evidenced by the fact that the debtors are actually voting on its increase. Real people know that isn’t how it works in the real world. A normal person must request a increase in their own debt ceiling from a creditor and the creditor determines if an increase is warranted based on the worthiness of the debtor. The real debt ceiling will be reached when there is no longer anyone for the federal government to borrow from.
Advocates of big government are correct when they make the statement that our country is not bankrupt. It’s worse than that. A definition of bankrupt is an entity that cannot pay their debts. This country is 14.5 trillion dollars in debt and has many trillions more in future unfunded liabilities owed to unsustainable so-called entitlement obligations for future “benefits”; obligations that are almost always end up larger than estimated. It has been more than ten years since this country took in more in tax revenues than it spent. With that kind of discipline there can be no confidence in lawmakers to change, or demonstrate the necessary capabilities to change course on extreme spending.
A default will not necessarily occur if the debt limit is passed and not raised. A default will occur if creditors are not paid following the debt limit not being raised. The US government will take in more than enough tax revenue to service existing debt. It is at the prerogative of the executive branch to determine who gets paid and who doesn’t. Only if the President decides that social programs should be paid at the expense of debt service will there be a default. Imagine a real person, if they decided to flush a large sum of money down the toilet every month from now that they know will cost more than they have considering all other financial obligations. Will that person be able to still flush the money down the toilet when they run out of money or will they pay the mortgage and have to stop flushing the money?
Raising taxes does not necessarily increase government revenue because the tax base of a country made up of three hundred million people is not static. Theoretically, all things being the same, if the tax rate is changed then there is more tax revenue, if nothing else changes within an economy. But that nothing else changes requirement is a farce. The government should raise revenue by growing the economy by encouraging business, by actually cutting corporate taxation and eliminating needless regulations, which will increase the tax base by virtue of the enlarged employment base that comes with increased business.
Unfortunately the Republicans have begun to play the role of creating a plan that satisfies democrats and the President’s idea of a shiny “grand bargain” that he can describe a thousand different indecipherable ways but refuses to write down exactly what it is, refusing to sign anything but what is his idea but not telling anyone exactly what ‘it’ is. We’re doomed.
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