Debt Limit Fiasco

A few years ago, I woke up to the fact that unless I researched the numbers myself, I was never going to understand and know the truth about the fiscal position of the United States.  I came to this realization while being thoroughly confused while watching the presidential debates in 2008.  Both candidates, then Senator Obama and Senator McCain, regurgitated all sorts of numbers, percentages and calculations to describe the budget, deficit, debt, taxes, etc., but neither ever used the same numbers to describe the same thing. This lack of consistency made it impossible to know who was right, or in other words, who was telling the truth; and whether or not someone could support either of them came down to who had the more convincing delivery and less on the factual underpinnings of their arguments (we know how that turned out).  This doesn’t work for me.  I wanted to know who was telling the truth and it was no surprise when I finished my research that neither candidate was being honest.
Like many of my generation, I grew up hearing the constant accusations by our national leaders that one party or the other was to blame for the national debt.  It was always a Republican problem, or a Democrat problem, but never a “leadership” problem.  I remember discussing the national debt in high school, college and then grad school and the result was always the same… there were a lot of big numbers being thrown around with a lot of finger pointing, but regardless of who was in power, the debt kept growing.  Even in the late 90’s during President Clinton’s last term in office where the Congress and President were able to balance the budget, the national debt continued to increase. Why? Because the same politicians who were taking credit for “balancing” the budget, were writing IOU’s to the non-existent Medicare and Social Security trust funds.  The tax dollars that should have been put into these accounts to ensure the solvency and long term health of these programs was being spent, thus adding to our national debt.
So this brings us to today and the political grandstanding that is going on in D.C. over whether or not Congress should increase the debt limit.  Notice I do not call it a debate.  A debate would indicate a serious discussion based on a review of the facts and what we have here is far from serious.  Based on the proposals that have been offered by the leadership of both parties (President Obama for the Democrats and Speaker John Boehner and Senator Mitch McConnell for the Republicans), what should be a serious debate, has become a political fiasco.  This is because these proposals fall so short of actually solving our fiscal crisis that it is impossible to take either party seriously.   The proposed cuts are so small that even if Speaker Boehner’s plan was adopted to cut $4 Trillion in spending over the next 10 years, the national debt would still increase by almost 60%.  I fail to see how growing the national debt from $14 Trillion to approximately $22 Trillion over the next 10 years is going to solve America’s fiscal crisis (this does not even consider the unfunded liabilities which are growing astronomically).  On the other hand, President Obama has proposed to cut $2-3 Trillion (the number has fluctuated daily) in spending, but wants to add over $1 Trillion in taxes. If we assume the increase in taxes will not have a negative effect on the economy (which is a BIG assumption), at the end of 10 years, President Obama’s plan will put us virtually in the same position as Speaker Boehner’s with maybe an additional $1 Trillion or so to the national debt. But hey, what’s another Trillion?
The only proposal that even attempts serious spending control is the plan that passed the House called “Cut, Cap and Balance.”  I will not go into the specifics here, but it is the only plan I have seen that tries to control spending.  I don’t think it goes far enough, but this makes sense considering the fact that the drafters of the plan are trying to win bipartisan support and are trying to find some middle ground.  It leaves areas open that will need to be addressed at a later date… such as Obama’s health care over-hall, but at least it takes us in a positive direction with some real spending controls.  I think the best part of the plan is the call for a Balanced Budget Amendment to the Constitution.  I really do not like the idea of amending the Constitution, but I think there are some issues that rise to a level where our leaders have failed so miserably that we have to amend the Constitution to protect our rights.  Our leaders’ failure to control spending definitely rises to that level.
But please, don’t rely on me for the numbers, go to the source.  You can visit the U.S. Department of the Treasury website and review the budget reports of the United States for the past 15 years and see for yourself.  http://fms.treas.gov/fr/index.html Most of the years divide the reports into two, one is an abbreviated citizen’s guide and the other is the full report.  I have found that the citizen’s guide is usually sufficient in providing a clear view as to our nation’s fiscal crisis.  One thing you will notice is the difference in reporting from one administration to the next.  Sometimes this makes understanding the reports more difficult because there is an obvious angle in the report to justify the current administration’s policies.  I personally believe this is most evident between the reports of 2008 to 2010.  Timothy Geithner, our current Secretary of Treasury, has gone out of his way to defend his policies and makes the 2010 Citizen’s Guide the most difficult to understand.  To get the full picture you will have to reference the full report.  Another good source of information can be found at http://www.pgpf.org/. The Peter G. Foundation is a nonpartisan organization committed to increasing “public awareness of the nature and urgency of key fiscal challenges threatening America’s future and to accelerate action on them.”  I find their explanations and proposals very insightful and definitely not based on a particular political ideology.
I am convinced that whatever political deal is struck over the next few months will not solve our fiscal challenges.  The leadership of both parties are more concerned about their political futures, maintaining their seats and the seats of their parties and less concerned about what is best for the American people.  The plans proposed by the party leadership are laughable and obviously designed to make an ignorant electorate believe that each party is really doing something meaningful to control spending in Washington, which is clearly not the case.  The current fiasco is just another distraction to mislead the American public.