When Will the Debt Ceiling Debate End?
"When will the Republicans quit fighting about the debt?" That's the big unspoken question, if you read the popular press. For all the talk of previous deadlines being met at the 11th hour, the real goal is to get the GOP to fold as soon as possible.
More and more mention is being made of the fact that few countries have a debt ceiling at all, as if that were the problem. The debt wouldn't be an issue if we could pile it up faster. All the limit does is give the Right a weird little tool to slow us down that nobody else uses. Besides, it's holding up spending that was already voted on.
Then again, a disagreeable chap who doesn't work for a major news outlet, like myself, might ask impolite questions, like, "Why didn't Congress take the debt limit into consideration when they voted to spend that money?" Of course, the much more polite people who are in the press corps want to know more important things like, "When will the Republicans stop holding world finance hostage?" They would never dream of asking the Democrats why they spent more than the debt limit allowed in the first place. That answer is implied.
They had to.
Once upon a time you could claim the debt as an investment, and would reap economic rewards down the road. That time is long past. We're not building dams or highways with these deficits. This kind of excessive debt drags down GDP growth. Anecdotally, our crumbling infrastructure, and stuck wages should be enough to tell you that none of this has been an investment. If we couldn't buy utopia with the extra $25 trillion we've spent since 2001, how much more is it going to cost to get us there? Is that a valid question? Can someone in the press please ask that? How much more do we need to borrow before we can stop spending?
You sweet summer child; we know that answer too! We have to keep spending to prevent catastrophe!
Ah. So we're riding the tiger, where we fear to stop lest we be eaten. From a purely political perspective, that might be advantageous, insomuch as it's the President who sits highest on the back of that great cat. Congress has a 16% approval rating. It's tempting to urge them to kamikaze the talks to take down their foes with the understanding that they're already hated. How much worse can it get? Unfortunately, the recessionary tiger would just rampage through the village afterwards.
How then do we dismount? When will the debt ceiling debate truly end? When do we stop borrowing and start paying back? Can the press ask that, at least?
I'm being rhetorical. Of course they won't.
Freezing spending at 2022 levels isn't going to do much, despite the talk of starving orphans and widows. In 2022 the federal government spent 6.3 trillion dollars. Of that, 1.7 trillion was Discretionary, subject to yearly appropriations. That's just under 27%, for those of you scoring at home. The remaining 73% of the budget is Mandatory spending, that runs on autopilot regardless of whether Congress passes a budget or not. The budget deficit last year was 1.4 trillion dollars. Effectively, Washington put 82% of the discretionary budget on a credit card. I don't want to insult anyone's intelligence with simple math, but by my reckoning, you'd have to cut discretionary spending by 4/5s to balance the budget based on those numbers. Looking at that absurdity, limiting growth to just 1% is such a pittance you have to wonder why Biden didn't simply accept it on the spot.
They tell you why. Biden wants more spending. Give him ten more percent to spend, then it's down to 1% growth. Scouts honor. One last cigarette before I quit.
If I'm to believe what I'm told, it's calamity all around if we don't keep borrowing. There's no way out but through. Nobody bothers to ask why the president can't prioritize old women and veterans over cowboy poetry. They want him to twist the meaning of the 14th Amendment to bypass Congress, but shrug and go along when he says he has to stop WIC payments. You heard him. His hands are tied.
Come to think of it, if the Democrats are willing to swallow a poison pill, and sacrifice the most vulnerable among us, to win this battle, maybe the congressional Republicans should let go of the tiger's bridle. The other side is certainly telegraphing that they'll turn a 1% speed bump into Götterdämmerung for the crime of standing in their way.
What can one do in the face of such reckless and maniacal greed? When might it end when one side is so opposed to a 1% raise that they'll scorch the Earth? I think I might know.
Those of us addicted to reality know that if something can't go on forever, it won't. Remember that 27% of the budget they're fighting about? What about the other 73% we're not supposed to mention? That pot of money includes the third-rail programs Social Security and Medicare. They are completely off the table, even if they are, by far, the largest budget items in the bucket. Unlike those bums at the Education Department, these people need protection. They are out of play, in a lock box, if you will.
What if they don't think they're in a lock box?
The trustees of the programs tell us that Medicare part A is going to run out of money in 2028, and the SS trust fund is going to run aground almost immediately after in 2034. If ever a situation existed to provoke a general budget crisis, telling Gen X, "We spent your retirement money." might be it. The programs will have to be put on the political table at that point. Except, the well is dry now. It's projected to be an even deeper hole by then, at least 10% deeper if Biden gets his way.
That might well be the end. No more arguing. No more debates. Nothing left but the crying. You can believe we're going to face cuts a lot steeper than a 1% increase at that point.
Odds are we're already long past the point of no return. If any slim chance exists to avoid the collapse of Federal finances, it's going to have to be more creative than gibberish about 1% increases being draconian. Defense will need cutting. Discretionary spending will need cutting. Social Security and Medicare will need means testing and privatization where possible. Public land will need to be sold.
Those are the ways the debt ceiling debate ends. We either get serious, and ingenious, about putting our finances in order, and quit letting politicians avoid their duty to prioritize, or we continue to party in the bunker, moving imaginary money around, as inevitable default closes a circle around us.