The Debt Ceiling Debate: My Two Cents Worth

Commentary by Bob McTeer

Source: Forbes

It would be nice if the proponents of reducing the deficits and the debt could achieve those essential goals by threatening to block an increase in the debt ceiling. But they can’t. Trying to do so will not only fail, but it will hurt their worthy causes, present and future.

In the first place, the debt ceiling makes no sense. Congress determines total spending levels. Congress determines tax revenue. They vote on these things. If the spending exceeds the revenue, there is no alternative to borrowing the difference, thus increasing outstanding debt. The only cures are lower spending and/or more revenue. The debt ceiling is redundant, and threats to breach it are self-destructive. The advocates of using the debt ceiling as a bargaining chip have no leverage. They can’t win, and they will be blamed for trying, as they have before.

Raising the debt ceiling without a big fuss will allow a more rational debate about spending and taxing and the size of the deficit and the additions to total debt. We’ve just had a significant tax increase. Hopefully, the next round will feature mostly spending cuts, especially cuts in the growth of entitlement programs, especially Medicare, where most of the problem is.

But they should not be called “cuts” as I just did. People don’t want their social security cut; they don’t want their Medicare cut; they don’t want Medicaid cut. Well, nobody is proposing to cut them. We are proposing reforms that will slow their growth below the growth of the economy that supports them. We are hoping to slow the increase, to make them sustainable, but that’s not how we talk. So, people are confused about our motives and our good will.

What we should emphasis rather than cutting, or even slowing their growth, is that current trends are simply not sustainable. These programs will go broke if not fixed. They must be fixed if they are to be here for our children and grandchildren. We are not trying to destroy the safety net; we are trying to preserve it. So, we should talk our talk better.

In the coming debate, those who want to fix the debt problem by fixing its root causes should have the high ground. Those who argue for the status quo when the status quo is clearly not sustainable are the unreasonable ones. They are the unreasonable ones who have been winning because our rhetoric is too easy to demagogue, and they have shown no shame in doing so.

It will be easier to fix the real problems if we stop making ourselves look silly tilting at the debt ceiling windmill.