This Is No Time to Increase the Debt Ceiling: Cut Spending Instead

on January 7, 2011 at 10:08 AM

Jenny EriksonThe new congress has been installed, the Constitution has been read, and now it’s time to get to work. Let’s talk about money, honey, and specifically where it’s going to come from to fund all the spending that our government likes to do.

Funny thing about governments: They don’t make money. People make money by trading goods or services for a paycheck. (This is what is commonly referred to as a job. I know it’s hard to remember in this economy.) The government takes some of that money from you and me in the form of taxes, and gives it to someone else for whatever reason.

Giving away money is super fun. Look! They like us, they really like us! Who doesn’t love to play Santa Claus, offering free health care to all? The government is not Santa, and there are no magical elves working in the ER. Every dollar the government gives away (to Social Security, education, Obamacare, welfare queens, crack monkeys) has to come from somewhere.

Right now, taxpayers (a.k.a. working Americans) fund about 60% of the budget. The rest of the money is borrowed in the form of treasury bonds, borrowed against trust funds, or borrowed from other countries like China or Japan. Much like we all have a limit on our credit cards, the United States has a limit on how much it can borrow. That limit is what’s being referred to every time you hear the phrase "debt ceiling."

America continually spends more money than it brings in, which means that we are always getting closer and closer to our limit. Every so often, Congress has to go in and fiddle with it, and vote to increase it. Last time that happened was February 2010 -- it was predicted to last until late 2011. Current predictions show us hitting the ceiling in the early spring.

Now lawmakers are once again considering raising the limit on our proverbial credit card. Treasury Secretary Tim Geithner warns, “A failure to raise the debt limit would mean the government would not be able to make the payments on the current debt, which stands at $13.96 trillion.”

Our debt is now so out of control that we can’t even afford to make payments. Obviously, the solution is to take out more loans. I believe that’s called robbing Peter to pay Paul -- or paying MasterCard with Visa. I don’t see the point.

The only solution is to cut the spending. There are a number of household budgeting guides I’m sure politicians could use to figure out this complicated process. Bottom line: Stop spending more than you bring in.

Filed Under: economy, politics, taxes

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Comments (5)

micheledo

on Jan 7, 2011 at 10:19 AM

Put some penny-pinching moms on that Budget committee. True, people won't be happy, some people will be hurting, but that is what happens when you stop spending. It's not easy, it's not fun, but it is worth it in the end.

STOP SPENDING MONEY!!!!!!

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Nonmember comment from jw

on Jan 7, 2011 at 10:22 AM

So which would you cut: social security benefits, medicaid, defense? Because if you cut all discretionary spending, we'd still hit the debt ceiling this year. The debt ceiling has a lot more to do with spending from previous years rather that this year's spending

Nonmember comment from Anon

on Jan 7, 2011 at 11:09 AM

I'd start by terminating all the new government positions created and filled by Obama since he took over. Next I'd get rid of rules preventing prisoners from working at a trade (which unions succeeded in making illegal) and make them work HARD if they want to eat, shower, and have heat. (And forget luxuries such as cable TV!) I'd reverse the acts Obama has done to provide funding toward abortion in the US, in other countries, and toward embryonic stem cell research. I'd end the school hot lunch programs and instead offer a few healthy cold foods. Given a little more time, I could think of a few hundred other things that could be cut while actually making the USA a better place.

hoticedcoffee

on Jan 7, 2011 at 1:25 PM

While I agree that the spending needs to stop, I don't believe raising the debt ceiling is really optional at this point - the US has to honor foreign debts and domestic bonds - to just say 'hey, we know we owe, but no can do' isn't an option. What should happen is conditions to raising the ceiling, which reduce future spending. Conservatives in Washington are in a very good position to make some demands in exchange for their support, cut a lot of future spending, and start righting the ship.

on Jan 7, 2011 at 1:59 PM

jw - your suggestion is a good example of many american's problems with cutting their own spending. They assume to cut spending they have to get rid of important things. But that isn't true at all. Anon had some great suggestions! You can decrease spending, come up with more efficient ways to do things, and completely cut out things that we can survive without.