The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.
Cicero (Stated in the Roman Senate, 55 BC)
Ceiling: An upper limit, especially as set by regulation.
Americans are about to watch Congress argue about raising the “debt ceiling.” If ever there was an oxymoron it is the so-called “debt ceiling.” Allow me to begin with my recommendation: We need to eliminate the “debt ceiling.” It only causes trouble and gains nothing. Do not mistake me. I would love to have a true debt ceiling, but we don’t and we won’t. If we want to reduce the size of government, its massive expenditures and it growing debt, arguing about the debt ceiling strikes me as an ineffective and dangerous avenue of attack.
Cicero was the greatest rhetorician in history. Apparently, rhetoric alone does not work. The Romans overspent, much to their chagrin, and the Congress of the United States of America has learned nothing from Roman history, or apparently the history of innumerable other countries that spent themselves into oblivion. Let me now ask a rhetorical question: How much longer can we continue to spend money that we do not have?
The answer to my rhetorical question depends on several factors. Factor 1: How long have you been spending more than you have? Factor 2: How much longer do you plan on spending more than you have? Factor 3: How much more than you have did you already spend? Factor 4: How crucial (existential) are these excess spending needs? I am no economist. I am just a man on a budget. However, it is very easy to formulate these questions. The answers, unfortunately, are laughable when one examines the track record of the Congress of the United States of America (more on the “answers” to these questions in Part II).
Congress indeed has a mechanism to instigate a reconsideration of its spending habits when our budget deficits are out of control. It is called the debt ceiling. Once total outstanding federal debt reaches the limit, the Treasury Department is no longer authorized to issue new debt.
(What I am about to write comes almost exclusively from Veronique de Rugy’s (senior research fellow at the Mercatus Center at George Mason University) excellent article in Reason.com, The Truth About the Debt Ceiling. I suggest you read her article in its entirety. Additional information was provided by the Heritage Foundation.)
As the name implies, the Statutory Debt Limit, or the debt ceiling, was designed and implemented to control government spending. How’s that working out for the average American whose debt it truly is? That answer is the easiest of all to answer. It isn’t!
One can bet that during the debate one or another expert will testify before Congress that unless the debt ceiling is raised the “full faith and credit of the United States” would be “called into question” and there would be “catastrophic damage to the economy.” How can I know that, ask you? Because, answer I, it has been said in every debate on this issue. However, if a “no” vote is disallowed, then why do we have Representatives? Why did Congress even bother to make the debt limit “statutory?”
The difference between private enterprise and government is stark in the extreme. Businesses must constantly “reform” or die. Government rarely reforms and simply adds to the tax burden or the debt burden. The virtuous cycle of business is enforced by competition. Competition in government is between parties, the two that rotate power both spend. While I am a Republican, their past performance is far from exemplary!
As opposed to the rubric that must be followed by a business if it wishes to survive and prosper, the Federal government has a diametrically opposite rubric. Its vicious cycle of spending is allowed by competition’s absence. Spending is the mark of governmental success. Increased spending means more power for politicians, more prestige for bureaucrats, and more programs for politically-selected recipients. Less spending lowers all three groups’ status.
For the most part the party in office votes to increase the debt ceiling and the opposition party decries the action. Here is a history of how political parties voted when the debt ceiling needed to be raised:
The other argument from those that wish to raise the debt limit is that “it was Congress that voted for the expenditures that brought our national debt to its current crushing level. Now they want to argue about paying for those appropriations.” Sadly, it is a reasonable argument. (If you are looking at the Republican Congress of 1997 – 2002 do not be fooled. The Treasury was awash with revenue from the Dot.Com Bubble.)