The Debt Ceiling and How to Responsibly Eliminate It

 

The Debt Ceiling and How to Responsibly Eliminate It

The debt ceiling is a limit on the total amount of government borrowing. First put in place by Congress during World War I, it was meant to give blanket authorization for the Treasury Department to borrow money up to a set amount.

1. This is the "PAYMENT " side of government responsibilities.

Therefore the debt ceiling and all the political fighting, which has occurred 79 times to raise it when it is not enough to pay the nation's bills that are in the budget did not exist before World War 1. Therefore, it has been proven possible to live without it.

As previously mentioned the debt ceiling is a product of the budgets approved by Congress. Therein lies the problem that needs to be fixed. It is the Constitutional duty of Congress to pass a budget every year. It seldom does.

2. This is the "SPENDING" side of government responsibilities.

Instead of doing its job, Congress rarely passes an annual budget and consequently gets into many other fights during the year to keep the government running and passes temporary "Continuing Resolutions" during each year to authorize spending. Unfortunately these Continuing Resolutions are always a fixed percentage increase over last year - no thinking involved.

In other words, instead of making the necessary hard decisions on where to raise and where to cut spending based on anticipated tax revenues and by how much that would and should be involved in a true budget process, Congress ignores its true responsibilities and "kicks the can down the road".

THIS IS HOW TO FIX IT:

Eliminate Continuing Resolutions. Make the budget a truly MANDATORY annual event. If the political parties cannot agree on a budget for the new fiscal year by the annual budget deadline, then automatically cut last year's budget by 10% across the board and let that be the new mandatory annual budget until Congress passes a real budget. Also, to insure that Congress "lives within its means" make it mandatory, with the exception of when we are in a war, that total budget spending may not increase more than inflation plus may not exceed anticipated tax receipts by more than 5%.

Such a budget result (10% cut to last year's budget for the new annual fiscal budget) would be unacceptable to all political parties and that fact plus voter anger on spending cuts such as Social Security and welfare would force Congress to do its job and actually make the necessary hard decisions, based on actual tax revenues, on what areas to cut spending and what areas to increase spending within each annual budget and by how much. Those necessary decisions are not being made today and should be. If we do not implement those recommendations, eventually the Untied States will not be able to borrow enough money to pay its bills and debt obligations, and as happened to other nations, the entire economy will crash with dire results for all of us.

Let me give Congress a "head start" on where to cut the budget - SUBSIDIES. There are thousands of Federal subsidies with as many as 100 new Federal subsidies added each year. These subsidies are hidden from view - being buried in many different "Departmental" budgets and amounts to hundreds of billions of dollars and maybe even over a trillion dollars each year. Each subsidy overrides the free marketplace and therefore is a "Slice of Communism" - the most failed economic system in the world.

Minimally put all subsidies in a single "Departmental" Subsidy budget and subdivide it by type of subsidy so that all of us can view the amounts spent of each type of subsidy. The goal is to permanently Eliminate all Federal subsidies within 10 years or less. Most are small enough that they can be eliminated in just one year. Agricultural subsidies would probably need a 10 year reduction program before elimination because some of those subsidies, such as growing corn for ethanol production instead of food, have caused farmers to make key investments such as buying land to increase corn production.