Main Street Journal: Online Exclusive: The Debt Ceiling is Falling, The Debt Ceiling is Falling!

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The Debt Ceiling is Falling, The Debt Ceiling is Falling!
By: Chuck Bates

In recent weeks and months the budget battles taking place in the various state capitols as well as in Washington, D.C. have really involved two camps. The first are realists who understand that the status quo simply will not do, spending more than government brings in. The second are those who seem oblivious or worse and are attempting to not only maintain the out-of-control spending but—in a move that defies logic, economic law and common sense—want to increase government expenditures. This latter group uses some very creative language to pretend this is not their agenda.

While most states realize they cannot continue down the tax-and-spend trail to oblivion (California, Illinois, Massachusetts, New York not withstanding) many of the folks in Washington, D.C. just don’t seem to get it. Like a four year old at birthday party they can’t believe the party could possibly be over and appear ready to throw a tantrum at the very notion. It would seem some of the “grown-ups” sent to Washington in the most recent elections are bursting the bubbles of many of the government-as-usual crowd, including the President of the United States, Barack Obama. As of this writing the President has made his latest speech denouncing the Republican plan put forth by Rep. Paul Ryan (R-WI) to attempt to rein in government spending, including reforming the largest budget items: Medicare and Medicaid and potentially Social Security. But before this battle over the budget of 2012 takes place the debate over the debt ceiling must come first and this is where we are really seeing some weeping and gnashing of teeth by both bureaucrats and a lot of their friends in the establishment media in this country.

I was talking with a brilliant economist just today who noted the ridiculous notion being bantered about by folks on both sides of the aisle that somehow the government will come to screeching halt and the economy with it if we don’t raise the government’s debt ceiling or limit. He noted that the Federal debt ceiling is no different than your credit card limit. Will you go bankrupt if you can’t get your credit card company to raise your limit? Of course not! So long as you continue to make payments then you continue to have credit. But what Washington is seeking is an additional rise in their credit line allowing them to not only continue spending but to increase that spending to new record levels. Keep in mind that the Federal government has no money of its own but only what it takes in via taxes from you and me and the various enterprises we own or work for every day. Everyday the US Treasury posts the end of the day balance sheets. Anyone can view them online and see that money is flowing into the Federal coffers. The problem lies, of course, in the fact government spends more than it takes in each month creating record deficits that our children and children’s children get to pay for the rest of their lives. If conservatives disallow the expansion of the debt ceiling they will not be causing any real harm to the Federal government but simply requiring it to live within its means or to consider reallocating some of those funds where they are really needed, forcing us to prioritize our spending as a nation.

As long time readers of this column know the Founders of this great land had a very limited scope in mind for the Federal government and for State governments as well. They did not desire a “nanny state”. Thomas Jefferson is noted to have stated, “The two enemies of the people are criminals and government, so let us tie the second down with the chains of the Constitution so the second will not become the legalized version of the first.” What was true in Jefferson’s time is certainly true today. Government must live by the same common sense standards as the rest of us. It must be limited; and the best way to limit it is to limit government’s ability to involve itself in too much mischief. If you require it to live within a real budget then it must prioritize spending and diminish programs and legislation that are contrary to freedom, damaging to the economy or just plain stupid. Well, perhaps that is wishful thinking but at least it would have less opportunity to spend money on unnecessary programs and measures.

So when you hear the pundits, both Democrat and Republican, declare that we must raise the debt ceiling please think of the analogy of the credit card limit. It is no different for government than it is for the rest of us that we should and must live within our means or face certain economic disaster. Will some programs get cut? Probably, but don’t we cut things we can really live without during the lean times? You may be surprised at just how much government you can live without.

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