Debate over the debt ceiling in recent weeks has both parties pointing fingers at each side trying to out duel the other in a senseless blame game of debt ceiling political obligation. What’s the real issue is if and when will the U.S. default on portion of its debt.
The default will occur if the U.S. fails to meet its debt obligations by failure to pay either interest or principal due. Raising the debt ceiling claims from fundamentalist that a default on Aug. 2 is lacking and will result in catastrophefinancial disaster because the government has proven time and time again that it has unlimited spending with nothing to offset restraint. This is done through ties to the Treasury Department.
The Treasury Department provides the federal government car blanch with unlimited fiscal wastefulness spending raising Treasury debt. In the last ten years, foreign markets have been willing to purchase Treasury debt and fund the U.S. government’s deficit spending. (China being the biggest) This has led to unlimited spending creating default. The government has had default in the past in 1934, 1968 and 1971. 1934 was a major devastation as the default resulted in a depression of economic proportion known as the “Great Depression.”
Republican candidate Ron Paul recently stated the national deficit is greater than the current $14 trillion plus hovering in the range of $200 trillion. This was first mention back in 2008 and again this past year, 2010. The national debt stands at more than $14 trillion, while net total liabilities are estimated at over $200 trillion making the government insolvent, as there is no way that this massive sum of liabilities can ever be paid offaccording toThe Economic Collapse. “It is now mathematically impossible for the U.S. government to pay off the U.S. national debt.”
Here’s what I think the government should do to curtail overspending. By law per the U.S. Constitution cancel out the Federal Reserve system returning fiscal responsibility to Congress. This could cancel out the debt held by the Federal Reserve which would save the U.S. a couple of trillion dollars under the debt ceiling according to Ron Paulbringing the federal government back within the limits intended by the Constitution.
If Congress voted both the government and Federal Reserve out of business by reducing regulations on business and taxes on business, then business would begin to expand. Taxes on the wealthy were exactly the same during Clinton’s administration, the same wealth tax in 2007. So if we could get spending back to where it was in the 1990s and before 2007, we would have a balanced budget.Revenue is down because the economy is down.
Stop policing the world sending American military troops overseas like past failed wars in Iran, Iraq and current Afghanistanwhich will soon be considered the most expensive war in cost topping the past administration. Instead bring the troops back home saving a few trillion more dollars lower the debt ceiling. Starting to get the picture here?
Finally, stop this current administration from additional currency being printed which is fueling hyperinflation pushing revenue down because the economy continues spiraling downward and spending is up because we have too much government and a democratic congressional members that spends like there’s no tomorrow.
Unless major changes to this system are made, the U.S. will default on its debt. If the government defaults on its debt, then issuing new debt, higher borrowing costs will ensure that the government cannot continue the same old spendingprocedures. Raising the debt ceiling, the alternative to defaulting now is to keep increasing the debt ceiling. Keep spending like a fish out of water hope that the default comes 100 years from now when our kids, kids, kids have kids.
I’m no expert, but what do I know?
The opinion expressed in this commentary
article are solely those of Michael Coker