Treasury Secretary Timothy Geithner has alerted Congress that the nation will once again hit the debt ceiling on Monday, but that his department can take “extraordinary measures” to keep paying the bills for another few months.
Incredibly, the debt ceiling was raised from $14.294 trillion in August 2011, to its current level of $16.394 trillion. Thus in the span of only sixteen months, the Obama administration has added a whopping $2.1 trillion to the national debt. [Source]
The entire hullabaloo about the "Fiscal Cliff" is a politico- and media-manufactured diversion.
The real discussion we need to have -- but won't -- concerns the "Fiscal Abyss" (in the words of former Comptroller General David Walker) facing our nation.
Raising taxes is like putting a Band-Aid on a severed femoral artery.
DON'T RAISE THE DEBT CEILINGI've thought long and hard about this issue -- and have arrived at what is probably a controversial opinion: Republicans should refuse to raise the debt ceiling without huge spending cuts and entitlement reforms.
Here's a news flash: President Obama wants the country to default. He has layered on so much debt, so fast, that the U.S. simply can't honor its obligations.
And the administration's cascade of regulations (like "Boiler MACT") are explicitly designed to prevent the economy from growing fast enough to help make up the difference.
DEFAULT NOW -- OR DEFAULT LATER?The real question we should be asking is whether a default now is preferential to a default later.
I believe a default now is by far the best solution for the vast majority of Americans: when the default occurs, it will shock the financial system, rattle markets around the world, and -- in all likelihood -- herald the onset of another Great Depression.
A default several years down the road, however, will be far worse for America:
• The crash will be much larger, and much more catastrophic for the citizenry -- and it will hit seniors and the poor much harder;
• America's manufacturing sector will be less able to recover than it is today, having been downsized by this administration's regulatory onslaught;
• And America's citizens will be even less self-reliant, whether it comes to EBT cards, firearms, family-owned farms, and every other measure of independence;
• The military will be weaker, having been gutted by years of Obama's efforts to defund national defense;
The real question we must ask is this: do we want the economy to crash on Obama's timing -- or ours?
THE NEXT DEBT-CEILING DEBATEI believe that the House of Representatives should refuse to raise the debt ceiling without immediate and immense cuts and entitlement reforms. Barring, say, a $900 billion reduction in annual spending (removing the Stimulus from the baseline budget, for example), the House should refuse to raise the debt ceiling.
Let the country default.
It is provably better to default now than later.
We know that President Obama wants the country to default. That much is clear with the accompanying chart, which comes to us directly from the White House. He just doesn't want the default to happen quite so soon, before he's had a chance to -- in his words -- "fundamentally transform" America.
So let's default now, before things get immeasurably worse.