Now the real budget battle loomsPosted Wednesday, April 13, 2011, at 8:55 AM
If you thought the battle over the current budget -- in which the government came within an hour of shutting down last week -- was a mess, wait until you see the battle over raising the federal debt ceiling.
On or about May 16, the government will hit the current cap of $14 trillion in debt. Although the ceiling has been raised repeatedly for decades, with only lip service paid to "viewing with alarm" the increase, this time it's going to be a real donnybrook.
Don't get us wrong. We fully expect the ceiling will be raised. The alternative is for the federal government to default on its debts, which would be an economic disaster not just for the United States, but the entire world (and don't expect all those nations whose debts we "forgave" following WWII to come through on our behalf when we need it).
Until about ten years ago, the federal debt was manageable, although still larger than anyone liked, and the train wreck of entitlement programs like Social Security and Medicare were looming on the horizon with the baby boomer generation getting ready to enter the ranks of retirees.
But it really started to get out of control during the Bush administration when Bush launched two wars -- in Afghanistan in direct response to the 9/11 attacks, and in Iraq for reasons that still passeth all understanding. Besides the direct costs of the wars themselves, an estimated $4 trillion dollars will be spent on health care alone for disabled veterans of those wars.
Then the economic meltdown at the end of the Bush and start of the Obama administrations added several trillion more dollars to the debt.
Raising the debt ceiling is necessary, but it won't come without a price this time. Most Republicans and even a few Democrats are going to demand further cuts in the federal budget and in federal programs before they agree to it. This is going to get messy, fast.
If the government is really serious about getting its financial affairs in order, it should take the radical step of eliminating all tax breaks and subsidies -- across the board. It's insane, for example, that taxpayers subsidize oil companies, which then pay virtually no taxes, so we can pay $5 for a gallon of gasoline while they reap record profits. It's insane that the richest people in American rarely pay any taxes at all, because of all the tax shelters provided for them, while the average blue collar worker and Main Street businessman is crushed by them.
Shutting down the federal government is one thing. Going in default on the nation's debts is something far, far worse. If you thought they put guns to each other's heads as the shutdown loomed, now they'll be aiming cannon. And this time, the deadline is real. It can't be extended "temporarily."
The battle for the very soul of what the federal government can and should do is about to begin, and a final decision must be made in just a few weeks. Talk about crunch time. The next few weeks may very well determine the future of America.
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Hot topicsA desire to stay the course
(0 ~ 10:34 AM, Apr 27)
Here we go once again...
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