Debt woe ignores reality
At the last news conference of his first term, President Obama poured contempt on any suggestion that the constitutional Treasury debt limit either be adhered to or that any agreed-to increases be offset by cuts in government spending.
Obama refused to publish any budget during his first term, but he increased Treasury debt by $4 trillion. To put this vast figure into some perspective, the past 4 trillion seconds have occupied more than 126,000 years.
The largest buyer of our Treasury debt is the Federal Reserve. According to Fed statistics as of Jan. 10, it holds $1.7 trillion in Treasury securities and another $1 trillion of largely toxic mortgages. This encumbers all Americans — especially the young — with an unbearable debt load, threatening poverty and suffering.
At today's abnormally low interest rates, the Treasury pays interest of $600 billion a year on its debt. At average historical rates, America will have to find $1 trillion a year for interest payments alone.
In 1902, Argentina challenged the United States as the world's second-richest economy, behind Great Britain. Adopting debt-financed socialist policies, Argentina's economy eventually collapsed. By the end of the 20th century, Argentina's inflation rate ran at more than 3,000 percent amid widespread poverty and hunger.
As most families recognize, this is simple housekeeping. If the household spending exceeds income, lifestyles can be sustained for a time by borrowing from banks, credit cards and mortgage companies. Eventually, however, limits are reached. Reality must be faced. Spending cuts must be made to service loans, let alone reduce debts.
If the head of a household goes to the bank demanding another increase in the credit limit, lenders are apt to become concerned and to tighten, rather than loosen, credit terms.
For decades, the United States has overspent its means. Motivated by re-election, past members of Congress have raised the nation's debt limit with scant regard to future generations. The time has come to curb government spending.
Having overspent by some $4 trillion over the last four years and secured a further $4 trillion over 10 years from the fiscal cliff negotiations, Obama now appears to want an open check.
Furthermore, he insists that Congress faces a “moral obligation” to raise the ceiling.
Senate Majority Leader Harry Reid, D-Nevada, has even suggested that Obama should bypass Congress to raise more debt.
Fed Chairman Ben Bernanke describes the debt ceiling as merely “symbolic.”
It is clear to all who take the time to look that the federal government's aggressive expansion and reckless overspending must be curtailed if financial chaos and economic disaster are to be avoided.
Over the past century, the Fed's manipulation has debased the dollar by over 98 percent. The Treasury has debts $1.2 trillion larger than the national Gross Domestic Product and has reached its Constitutional debt ceiling.
Instead of trying to find ways around this limit, Democrats and Republicans should curb their reckless spending policies. But without strict term limits will they have the courage?
John Browne, a former member of Britain's Parliament, is a financial and economics columnist for Trib Total Media. Email him at firstname.lastname@example.org.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Lawyer: Steelers center Pouncey, brother won’t be charged in July incident
- Testing legs, giving backup goalie a chance are Penguins’ priorities
- Ross brothers ordered to pay fine, remove debris from Christmas display
- Nearing season’s midpoint, Steelers still have issues to sort out
- Social Security benefits to go up by 1.7 percent
- Rossi: Fleury is, and will remain, Penguins’ soul
- Steelers film session: Watt kept under control
- Police seize phones of some Norwin High School students
- 7 in custody after New Kensington drug raid
- Truck wreck closes Saxonburg Boulevard in West Deer
- 2 stores robbed in Alle-Kiski Valley