American Elephants

The Debt Is Not A Joking Matter! by The Elephant's Child

Millions of Americans, when confronted with a negative balance in the family checkbook, usually sit down with the checkbook, a sharpened pencil and a lot of scratch paper, to see what can be done. Usually the discussion is filed under “Where can we cut back?”

Yet with our national check book in disastrous condition, according to the media, the President wants to spend more to invest in jobs, and education, and research.  It’s not just the deficit, we are deeply in debt.  The administration wants us to raise the statutory debt limit.  Here’s what Austan Goolsbee, chairman of the White House Council of Economic Advisers, had to say:

This is not a game.  The debt ceiling is not something to toy with…If we hit the debt ceiling, that’s…essentially defaulting on our obligations, which is totally unprecedented in American history.  The impact on the economy would be catastrophic…I don’t see why anybody’s talking about playing chicken with the debt ceiling.  If we get to the point where you’ve damaged the full faith and credit of the United States, that would be the first default in history caused purely by insanity.

The need to raise the debt ceiling is simply a symptom of a  bigger problem.  Congress has been spending too much money for too long.  There will be big consequences if the government doesn’t make some big changes to the way they spend.

When Nancy Pelosi became Speaker of a Democrat controlled House of Representatives in 2007, the national debt stood at $86 trillion. Today it stands at an incredible $14 trillion, and keeps growing.  By the end of this decade, President Obama’s projections show the national debt nearly doubling to $26 trillion.

The House Republican Study Committee has introduced a bill to get things under control.  The sensibly named bill, know as the Spending Reduction Act, makes real strides toward resolving the debt crisis by cutting $2.5 trillion of spending between now and 2010.

The bill makes $125 billion of immediate rescissions, which target money already approved by Congress, by cutting current spending back to 2008 levels and repealing the remaining funds from Obama’s failed stimulus package.  The biggest cuts come at the start of the next fiscal year beginning on Oct. 1.  The bill then cuts non-defense discretionary spending to 2006 levels and implements a hard freeze  through 2021.  This will save taxpayers $2.3 trillion.  Part of the savings come from trimming the size and cost of the civilian federal work force, and there will be no automatic pay increases.

You can expect screams of anguish from Democrats.  They will predictably claim that the cuts will kill people, and destroy lives.  Yet more spending  and “investment”will not return the freedom and dynamism of  the American economy.  The barriers to job creation that have been erected are formidable, and there will be many battles.  Labor unions will want more benefits and would-be wind farmers will want more subsidies.  It will not be easy nor comfortable. The Congressmen who are trying to fix things will need our support and encouragement.

(Oops, I wrote billion when I meant trillion in the 5th paragraph, now fixed).

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