Cut up nation's credit cards
Saturday, July 16, 2011
Beth Cody, Writers' Group member
Iowa City Press-Citizen

Should we increase our country's debt limit? The United States government technically reached its authorized limit of $14.29 trillion (that's trillion with a "T") in May, and needs Congressional approval to raise it yet again.

This has always been a formality in the past, but now people are finally starting to worry about our massive and frankly unrepayable debts and are pressuring Republican representatives to do something.

Republicans are dithering over requiring spending cuts before raising the limit, but will undoubtedly cave in to fearmongering, compromise for a few modest cuts, and the debts will continue to pile on.

Are we insane? Why are we even considering issuing new credit cards to an addict on a spending binge that we and our children are obligated to pay for? We need to take all of the cards away and cut them up in little, tiny pieces.

If the limit isn't increased, the world will not cease spinning on its axis and throw us all off into outer space, like the spendthrift special interests would like us to believe.

No, government has options:

1. Default on part of its debt now. This happens all the time in other countries and simply leads to higher borrowing costs and forced spending cuts (which are coming anyway), but also economic turmoil.
2. Raise taxes, which will depress the economy, leading to lower tax revenues and an eventual default.
3. Print more money to pay for obligations, leading to higher inflation and an eventual default.
4. Cut spending and over-regulation substantially now, which will bring hope to businesses, more jobs and higher tax receipts (but probably still default).

Obviously, #4 is the best choice for the future of our country. But the Big Spenders cry that any cuts will put Granny out on the streets, even though paring back to 2003 spending levels would be enough to balance the budget.

But not enough to pay off our debts – that would require more serious cuts. Some suggestions:

1. Close most of our military bases around the world, get us out of endless, futile wars and avoid new ones. Policing the world is impoverishing our children and eroding our freedom; our Founding Fathers warned us against such folly.

2. End all corporate welfare. No more bailouts or subsidies to any businesses, no matter how "vital," "too big to fail," "green" or home-spun farm-y.

3. Gradually reduce government employment and significantly decrease pay and benefits to discourage government job seekers. They will face mass layoffs when we default anyway, so let's gradually let them go during a (relatively) good economy.

4. Phase out middle-class subsidies such as guaranteed loans for housing and college that have caused destructive market bubbles.

5. Admit that Social Security is a failed Ponzi scheme and phase it out for wealthier and younger workers.

6. And the Big One: Get government out of health care. Having every family responsible for obtaining health insurance will rein in costs and make insurance better.

Many people will think that these are outrageous suggestions, and I understand that they are frightened of what will happen without these programs.

But these programs are all doomed to spectacular failure anyway if we do not do something about them now.

Historically low interest rates will certainly rise, making government interest payments more burdensome even without additional debt. Debt service already consumes one-sixth of incoming revenues, predicted to rise to 30-40% in the next decade.

How will we service our debt, make increasing entitlement payments, pay all employees, and police the world, while our economy is imploding from the burden?

Mass unemployment exceeding Great Depression levels, hunger, violent civil unrest and large-scale emigration will be our dismal and terrifying future, the result of our inability to make necessary choices today.

The only sensible answer is to cut spending, not to pile on more debt.