We keep hearing about the debt ceiling. Fiscal conservatives in the House of Representatives don’t want to raise it, we’re told—basically because they’re heartless and mean. Raising the debt ceiling, to read or watch the news, is the responsible and righteous thing to do. Why would anyone in their right mind not wish to do it?
What is the debt ceiling, exactly?
Here’s one definition I found:
The United States debt ceiling or debt limit is a legislative restriction on the amount of national debt that can be issued by the Treasury. Because expenditures are authorized by separate legislation, the debt ceiling does not actually restrict deficits. In effect, it can only restrain the Treasury from paying for expenditures that have already been incurred.
If the debt ceiling is not raised by the time extraordinary measures are exhausted, the government will be unable to pay its financial obligations. The United States has never reached this point. If extraordinary measures are exhausted, the executive branch has the authority to determine which obligations are paid and which are not. [Source: Congressional Research Service, 2012]
It sounds like the debt ceiling is a limit that the government attempts to place on itself. The government, as we all know, spends way more than it takes in. Most of the spending is because of Social Security, Medicare and now Obamacare. These programs place the government in a constant state of fiscal crisis, because even a booming economy cannot keep up with the already legislated obligation of the government to keep spending.
The prospect of the government “not paying its obligations” is frightening from just about any perspective. But the reason for the fear is rooted in the fact that politicians lie to us, and as a result most Americans are lying to themselves.
Most Americans falsely believe that the government can, and therefore should, keep spending money on Medicare, Social Security and Medicaid. They falsely believe that people “pay into” these programs and therefore should “get back” what they paid. But that cannot be the truth. If money from these programs came from those who “paid into” them, the United States would not now have a $17 trillion deficit (and growing).
The reality is that some people who get the benefits of these programs did pay into them, and are possibly getting back what they paid. Others paid way more into these programs than they’ll ever get back. Still others paid way less—or even nothing—into these programs, and will nevertheless get a lot out of them. Whatever you think of all this morally, the fiscal printout in objective terms is unmistakable: Bankruptcy.
The looming threat of the federal government “defaulting” as a result of “not raising the debt limit” is a symptom, not a cause. The vast majority of media and politicians speak as if the cause are those “mean Tea Party Republicans,” or anyone who challenges America’s perpetually fiscally bankrupt state.
But those who make an issue of raising the debt limit are simply the messengers. They’re the ones saying, “We’re spending way more than we bring in, and this cannot go on.” Most of those in power don’t really want to raise taxes, and they don’t want to cut spending, either. In fact, they want to increase spending. Such increases are built into Social Security, Medicare and Medicaid/Obamacare, by virtue of the growing number of people (aging population, poorly performing economy) eligible for them.
Calling it irresponsible not to raise the debt limit would be like telling someone with a modest income who has racked up $500,000 on his credit cards, “It would be irresponsible not to raise your credit limit.” A spending addict raising his credit card limit would simply be prolonging and extending the inevitable disaster.
Of course, for a spending addict living in the real world, it would never get to that point. Government has the advantage of not needing to live in the real world. Or does it? This is the economic—as well as philosophical and moral—lesson that human beings (Americans in particular) are on the verge of discovering.
Why do we blame those who merely express the obvious for being irresponsible? It’s those who want to keep raising the debt limit, continuing to evade the causes of the fiscal disaster, who are irresponsible.