I asked Alex Nowrasteh, economist for the Cato Institute, about a national debt solution: “Do you see our debt ceiling [and national debt] the way I do, that it is past the point of no return??”
He answered, after a pause long enough for a gulp, “Yes.”
Part One: No Other Reasonable Solution. There is a 5-step national debt solution. Its presentation begins in Part 2 with step 5. But before anyone is going to be interested in it we need in Part 1 to review a few facts about our national debt problem which everyone knows are there but no one wants to face, so we can agree there really is no other solution.
We political laymen are tempted to just leave politics to the professionals to handle it. But they can’t handle our national debt. Many are talking as responsibly as they can under the circumstances, but acting responsible at this point is like the Titanic captain, after he has slammed the ship into an iceberg, suddenly becoming responsible about who to let in the lifeboats. You need to know there really is a way none of us have to drown, but the politicians can’t do it without our involvement.
The other reason it is necessary to understand the gravity of the national debt problem., before we look at a solution, is that there will be little interest in the only solution unless the gravity of the problem forces interest. Because as Part 2 explains, the only national debt solution is handcuffed to the only immigration solution. Even more offensive to average Americans today, it is the solution commanded by God.
An even greater turnoff is the fingerprints of God on what Americans have done to create the debt problem, which God condemns; on the solution, which God commands; and on our debt problem itself, which God predicted. These three are measurable, their interconnection is indisputable, and their magnitude is equal, as precisely as human calculation can confirm.
It is important that we not allow this information to get out, because it will be absolutely fatal to the acceptance of this solution by average Americans. It is frightening enough to face imminent disaster. It is too great a burden to, on top of that, be blamed for it. If the only key to escape from disaster is labeled “blame” or “responsibility”, who will pick it up? We must label that key something else – anything else – and we must instruct our followers to do likewise. For example, my follower is Robert Allen.
We must also ensure that Americans do not learn of the responsibility of Christians and their assemblies for obstructing our only God-commanded solution which is detailed in Parts 3, 4, and 5.
But back to the theme of Part 1: there is no other solution. The closest to a “solution” that anyone is talking about is not a reasonable solution.
If Washington doesn’t come up with at least $4.7 trillion in deficit reduction, “we’re not going to have any money left to spend on anything else” but servicing the debt. Neither Republicans or Democrats have offered any serious proposals yet to shrink the gap between spending and revenues. “It’s nuts. We have an enormous fiscal problem in this country.” – Erskine Bowles, former White House Chief of Staff for President Clinton, who co-chaired the deficit panel with former Senator Alan Simpson, MoneyNews, 1/11/13
The Problem: America’s future, given her current population and relationship with God, looks as bad as the future of a family whose incomes barely cover credit card interest and grandma’s pills. Food, rent, utilities, and everything else have to go on the cards. Debt will snowball until the cards are maxed, followed by bankruptcy and eviction. Cutting waste will let it happen later, but it won’t stop it
America’s federal government spends over $1 trillion more than it collects in taxes each year.
Interest costs over half the cost of defense. It costs 84% of the cost of the whole rest of government besides defense and entitlements.
Interest costs this much even though it’s only 2% of our debt, the same as our 2% rate of inflation. Many investors receive a much lower rate. As investors lose confidence in Treasury Bonds a higher interest rate will be required to, uh, hold their interest.
What debt problem? The “debt ceiling”? But that’s not the biggest problem! The biggest problem is that despite these facts, America is about evenly divided on whether our debt is even a problem!
60% of Republicans want the borrowing to stop. Only 21% of Democrats are that concerned. They fear our nation can’t survive any more debt, which is what they believe we will get if Congress has no limit. (As of July 10, 2011.)
The Democrats who control the Senate and White House certainly want to raise the Debt Ceiling. In fact, “Obama Wants Power to Raise Debt Limit By Himself, Anytime”, according to the Heritage Foundation.
The Senate has so little interest in straightening out our budget that Senate Majority Leader Harry Reid hasn’t even allowed the Senate to vote on a budget, as law requires it do each year, since Obama was elected! Democrats are also doggedly committed to resist any “Entitlement Reform”, which the Republican-controlled U.S. House wants because there is no way to save America without it, since entitlements plus interest exceed our national income. Democrats are also doggedly committed to keeping Obamacare which is driving up health care costs by 15% .
Many democrats resist debt control because they don’t understand it. Many others, because they openly look forward to America’s leveling among the nations. Economic devastation will slow our polluting, they think, which will save our planet. Economic desperation will force us to unite as a world under the United Nations and accept a national currency, ending all wars with a reign of peace.
The “No More Borrowing” Lever. That’s why the vote to raise the debt ceiling, in the Republican-controlled U.S. House, is the only way left to control spending. America has a deadline for figuring out the right decision about pulling that “no more debt” lever: 6-9 weeks from the first of the year. Mid-February, maybe as late as early March. It may take that long for average Americans to figure out what the Debt Ceiling is.
The Debt Ceiling, set by Congress at $16.394 trillion a year ago, is how much the federal government can borrow without further authorization from Congress, although a few accounting tricks will enable our government to continue for another 6-9 weeks from when the Debt Ceiling was reached on New Year’s Eve. Republicans control the U.S. House, where the Constitution says all spending bills must begin. So if the House refuses to raise it, borrowing will stop, and neither the White House nor the Senate can re-start it.
But even the Republican-controlled House is lukewarm about voting against raising the debt ceiling, because they have no strategy for how America can survive cutting up the credit cards. They know America is like the home where income equals rent plus debt interest, leaving nothing to eat and no utilities if the cards are cut up. The longer the debt grows the more inevitable the crash, but by keeping the cards we might be able to delay it a year or two.
(The difference between the U.S. budget and the budget of a U.S. family is that a bankrupt family has some hope of mooching off others better off, but not America! We’re about it!)
So most of the Republicans talking about pulling that lever only intend to pull it for a little while, long enough to scare Democrats into cutting a little bit. Ideally, they would like to pressure Democrats to accept Entitlement Reform. But their only weapon is a bluff.
The trouble is, Democrats know it is a bluff. They know that Republicans care more about economically destroying America than Democrats do.
It is hard to bluff someone who knows you are bluffing.
The “solution” that isn’t. Republicans talk about getting our debt under control through “entitlement reform”. Let me explain what that is, and how desperate that is.
Vice Presidential candidate and Congressman Paul Ryan has a well known entitlement reform plan, and so did about 4 other Congressmen. The number of years they thought it would take before we could stop borrowing ranged between 8-10 years. Presidential candidate and Congressman Ron Paul thought it could be done in 4 years, by closing all our military bases around the world, bringing all our troops back home, and trusting that communists and Moslems would leave the world economy alone.
No one, in any position to do anything about it, has offered a plan how to balance the budget in one year, much less in six weeks.
The Heritage Foundation shows how entitlement reform could work in 10 years, in a document called “Saving the American Dream”. Social Security checks would stop to seniors with other income over $110,000. Seniors making between that and half that would have reduced checks. Seniors who might like to return to work would be offered the incentive of reduced taxes. Younger workers, not yet retired, would be offered alternative retirement plans, so that future dependence on Social Security would be reduced. Changes like that, along with the natural growth of the economy, could bring entitlements under control and eliminate our deficit (but not yet reduce our debt) within ten years.
But consider how desperate any solution is that puts off balancing our budget that long. It assumes:
- no Mideast war that brings in Russia or China;
- no European collapse;
- no budget-busting natural disasters;
- keeping Republican control of all three branches for a decade;
- investors willing to float U.S. Treasury debt another decade at our ridiculously low rates;
- enough investment capital in the world to feed a debt blasting past U.S. GDP for a decade.
Mitt Romney had great ideas for stimulating the economy, but no numbers suggesting when he foresaw balancing the budget, if ever. He did promise to create 12 million new jobs over 4 years. But as the chart shows, that is only a quarter of how many more new taxpayers would be needed this year to balance the budget.
Unless you consider that a solution, there is only one sure solution for America, which just coincidentally lines up with what God demands. That solution bears the fingerprints of God. But it also includes a grave warning of judgment for refusing it.
NEXT: Part 2, the Solution: I asked economist Alex Nowrasteh a followup question: “And do you see that the only hope of repairing our ratio of 1.7 taxpayers to 1.0 entitlement recipients, which keeps our debt beyond our control, is a massive infusion of new taxpayers through immigration?”
#### By Dave Leach, The Partnership Machine, Inc.