Tuesday, October 8, 2013

The Debt Ceiling Debate and Political Consistency

Here's an impassioned plea, arguing about why American politicians should not increase the nation's debt limit:

Mr. President, I rise today to talk about America’s debt problem.

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.

Over the past 5 years, our federal debt has increased by $3.5 trillion to $8.6 trillion. That is ‘‘trillion’’ with a ‘‘T.’’ That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next 5 years, between now and 2011, the President’s budget will increase the debt by almost another $3.5 trillion.

Numbers that large are sometimes hard to understand. Some people may wonder why they matter. Here is why: This year, the Federal Government will spend $220 billion on interest. That is more money to pay interest on our national debt than we’ll spend on Medicaid and the State Children’s Health Insurance Program. That is more money to pay interest on our debt this year than we will spend on education, homeland security, transportation, and veterans benefits combined. It is more money in one year than we are likely to spend to rebuild the devastated gulf coast in a way that honors the best of America.

And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infra- structure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on.

Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities. Instead, interest payments are a significant tax on all Americans—a debt tax that Washington doesn’t want to talk about. If Washington were serious about honest tax relief in this country, we would see an effort to reduce our national debt by returning to responsible fiscal policies.

But we are not doing that. Despite repeated efforts by Senators CONRAD and FEINGOLD, the Senate continues to reject a return to the commonsense Pay-go rules that used to apply. Previously, Pay-go rules applied both to increases in mandatory spending and to tax cuts. The Senate had to abide by the commonsense budgeting principle of balancing expenses and revenues. Unfortunately, the principle was abandoned, and now the demands of budget discipline apply only to spending.

As a result, tax breaks have not been paid for by reductions in Federal spending, and thus the only way to pay for them has been to increase our deficit to historically high levels and borrow more and more money. Now we have to pay for those tax breaks plus the cost of borrowing for them. Instead of reducing the deficit, as some people claimed, the fiscal policies of this administration and its allies in Congress will add more than $600 million in debt for each of the next 5 years. That is why I will once again cosponsor the Pay-go amendment and continue to hope that my colleagues will return to a smart rule that has worked in the past and can work again.

Our debt also matters internationally. My friend, the ranking member of the Senate Budget Committee, likes to remind us that it took 42 Presidents 224 years to run up only $1 trillion of foreign-held debt. This administration did more than that in just 5 years. Now, there is nothing wrong with borrowing from foreign countries. But we must remember that the more we depend on foreign nations to lend us money, the more our economic security is tied to the whims of foreign leaders whose interests might not be aligned with ours.

Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘‘the buck stops here.’’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

I therefore intend to oppose the effort to increase America’s debt limit.” (my bold)

It is really, really hard to argue with the logic presented, isn't it?   This speech was given on the floor of the Senate way back on March 16, 2006 during the Bush II Administration.

As he said he would, the then Senator from Illinois and the current President of the United States voted “nay” to House Joint Resolution 47 which would have seen the debt limit increased to $8.965 trillion, an amount that almost seems laughably small by today’s standards, as shown here:

Here is a look at the debt level when the Senator from Illinois took over the White House:

Here is a look at the federal debt level today:

That's an increase of $6.12 trillion in debt or 68.3 percent of the entire debt ceiling limit that President Obama found so offensive back in March 2006.  It is also nearly twice the projected increase of $3.5 trillion in debt that was proposed in President Bush's budget for the years between 2006 and 2011 that was of such great concern to the then Senator.

Consistency?  Not so much.  It does seem rather interesting that the current President is now expecting co-operation from the same august Congressional body that he was a part of in 2006 that didn't co-operate with the Bush II Administration when they needed to raise the debt ceiling, isn't it?

I guess that was the other "Barack Obama".  Apparently, a politician's opinion on any given issue  must be flexible, dependant on the political reality of that particular point in time.

Consistency - one of the rarest commodities in Washington. 


  1. I'm not a Obama supporter, but just for giggles what would the current debt level be if Obama never decided "Too Big to fail" and bailed out wall street? (I was against the Bailout) They all should have gone bankrupt.

  2. Wow, It's all kinda scary.
    In this case, inconsistency in politics can be a good thing. The world doesn't need an uncontrolled default on US debt.

    But in the bigger picture, where does this end? Obama was probably right in 2006. Does that make these "Tea party" politicians right today? Given it's been about 7 years (or $6.12 trilllion) since Obama's speech, the probability of bringing the debt down in a controlled manner isn't good. Is this the only alternative?

  3. Is it now time to go into survivalist mode? Buy a gun? Stock up supplies? Get ready for the (zombie) apocalypse?

  4. Sensible people know that a big debt is a problem. The issue is how to bring it down. And to fix the deficit and debt, one needs to look at the source of the problem. Here's a big source that most politicians, Republican or Democrat, refuse to acknowledge:
    The wars in Iraq and Afghanistan will end up costing taxpayers 4 to 6 trillion (that's *TRILLION*) dollars.

    That's a big chunk of the $16 trillion debt, caused by a President and Congress who was happy to get into these wars, but loathe to ask the US people to pay for them. In fact, he actually reduced revenue even while spending inordinate amounts on the war. Tell me, which party is fiscally responsible?

  5. Shouldn't you have bolded this bit too, so as not to be disingenuous?

    " As a result, tax breaks have not been paid for by reductions in Federal spending, and thus the only way to pay for them has been to increase our deficit to historically high levels and borrow more and more money. Now we have to pay for those tax breaks plus the cost of borrowing for them. "

  6. I guess my whole point was to point the fickle finger of fate at both sides of the political spectrum. Both sides have proven time and time again that they are quite capable of overspending their revenue stream and then looking for a way to cover their butts when the pressure is on. Unfortunately, it's not just the United States; most OECD nations have what are essentially unserviceable sovereign debt levels.

    It's a house of cards and we're just waiting for a gust of wind.

  7. It's very healthy to revisit this speech by Senator Obama. It doesn't really matter which political party you look at in today's America: both Democrats and Republicans are playing the same game. Kicking the can down the road, refusing to take measures to reduce the debt and stop the runaway spending, not addressing now-pressing issues like the retirement of Baby Boomers... and the only thing Congress actually produces is a ton of pork.

    The American democracy, prototype of so many others around the world, is turning into a different form of government. It looks more and more like the Third World's so-called "democracies", where the only piece of democratic government left is the formality of elections. Do governments change? Yes, they do. But you get the new party in government and it's just a new bunch of thieves taking over from the previous bunch. Constituencies become feuds, where the incumbent uses public money for projects that will buy him/her votes, but where the goal is in no way the long term benefit of the community. Paper democracies, in some places even called "kleptocracies" (rule by the thieves). And not just America: I see the same happening in my own Canada.

    In other words, personal interest has replaced common sense and civil duty. Republicans: we're willing to bankrupt our country to repeal Obamacare, because any public health care is evil. Democrats: we prefer to see America sinking in debt before we yield an inch of our own convictions; we will spend any amount to keep entitlements. Can't ideologies and dogma be left aside when diagnosing the ills of a country? Deng Xiao-Ping, leading a Communist nation, was able to leave dogma aside and just use common sense to get China out of poverty and misery. Amazingly, it should be concluded that Western nations should follow the example set by a totalitarian regime (not at the political repression side, certainly).

    Is there a way out of this? Unfortunately, I doubt it. Getting a different party doesn't change anything, just names. The big question is, how does democracy survive its own metamorphosis? Does it...?