Washington’s Unlimited Credit Card Limit

Most people talk about raising the debt limit as if it’s the self-evidently responsible thing to do. Obama and the Democrats, in particular, keep emphasizing that America must “honor its obligation.”

This would be like a long-term heroin addict lecturing his suppliers that the responsible thing is to keep giving him heroin.

The issue here isn’t what happens if the debt limit is or isn’t raised. The issue is why we’re in this disastrous position in the first place. We’re in this position because the American government spends way, way more than most Americans earn. In order to compensate for this fact, politicians have taken to borrowing against the value of our currency and future generations. There’s no proposal whatsoever to cut spending, other than in the abstract. There’s no proposal, even in the abstract, to cut entitlement programs like Medicare, even though they plainly have to be curbed if the government is to go on functioning — raising the debt limit, or not.

Advocates of big spending (in both parties, especially Democrats) are getting away with the implication that THEY are the morally and fiscally responsible ones by proposing raising the debt limit. But raising the debt limit is nothing more than raising the limit on a long-since maxed out credit card. If you knew somebody who makes $50,000 a year and had $700,000 racked up on his credit card, would you tell him that the responsible thing is to raise his credit card limit — immediately?

Of course, the example I’m offering is ludicrous. Why? Because no bank, no credit card company, no private lender of any kind would ever allow such a morally and fiscally bankrupt borrower as the United States government now is to keep getting more money. The game would have been over long ago.

I keep hearing from these big spending politicians that America must “honor its obligations.” But we’re talking here about DEBT. Isn’t the way to start honoring your debt obligations to simply start paying it off? And exactly how do you start paying it off by deeming an arbitrary increase in the amount you allow yourself to borrow? It’s insanity.

America’s politicians are literally addicted to spending. They will not stop, and they speak and act as if they cannot stop. Nobody is talking about spending cuts, other than in the abstract. The Tea Party types appear serious, but the grim reality is that the Tea Party does not have the backing of most Americans to make the kind of spending cuts they seek — indeed, the spending cuts required to keep America sustainable, to say nothing of a balanced budget.

The deficit is fueled not only by spending, but by an inability of the economy to grow. Since Obama came into office, unemployment has risen and the recession never really ended. If we’re not in a depression, we’re surely in something like one — and real estate is clearly in a depression, by any definition. The less wealth being created in the private economy, the less money government has to spend. Politicians appear to realize this, but don’t seem to care about letting the private economy grow again. Most of them only care about their immediate and shorter-range needs to spend. Just like an addict. That’s why the artificial debt limit matters so much to them.

If you or I were intelligent visitors from another planet, and we had just landed to watch this fiasco playing out, we’d have a lot of questions. One of the questions would be, “Why do these Americans keep allowing their politicians to spend this money? They could vote for a President and a Congress who were serious about cutting spending and balancing the budget if they wanted to. Why don’t they?”

The answer is clear: Most Americans don’t want spending cuts. That’s why most members of Congress are afraid to make cuts, and only the more principled minority will take a strong stand on the issue. The American government is acting like a bunch of crazy addicts, but only because the majority of Americans hold contradictory premises. “Be fiscally responsible. Balance the budget. But don’t touch Medicare, Social Security, welfare, or most other government programs.” AchieveĀ all of these logically contradictory ends? It can’t be done!

There is no fiscal responsibility without the rational action required to balance the budget. In order to get out of this recession, the government must do what a majority of Americans, up to now, have not wanted it to do: Privatize the economy, including health care. In order to balance the budget, the government must do what a majority of Americans, up to now, have not wanted it to do: Cut programs, and that includes at least long-term cuts in Medicare.

At a minimum, politicians should stop pretending that raising the debt limit is the responsible thing to do. Once they raise it, and surely they will, they’re only going to start spending again. Until the spending not only stops, but is reversed, there will be no possibility of fiscal sanity in the American economy.