Balanced budget best, but debt default dumb
| February 15, 2023 1:00 AM
Government spending is increasing by $2.6 million a minute. The national debt now stands at over 31 trillion dollars. That’s primarily money that people over 40 have spent, and a debt that infants born today will be burdened with, likely for their entire lives. This, in a great nation in which each generation has continually been wealthier than the one before.
That is emphatically not so, now. The future generation has been accurately described as victims of “generational theft.”
Out of deep concern about this, I contacted the wisest and smartest man I have ever known on the subjects of government debt and spending. Robert L. “Bob” Bixby for 30 years has been the CEO of the Concord Coalition, a national watchdog organization that has been monitoring and warning about government debt since the early 90s. I have consulted him since before the 2011 budget crisis.
Bixby is more concerned than ever about the national debt that he sees as “absolutely unsustainable.” But he also sees that ignoring the debt ceiling will save the government no money and the resulting default on the government’s obligation to pay its bills will actually create costs that will only add to the debt. This would be “totally mindless and irresponsible,” Bixby says.
Bixby “has never been a fan of the debt ceiling because it doesn’t address the causes of debt which are deficit spending and reckless tax policy.” Instead of fiscal discipline which requires political courage, Congress submits “to pressure from special interests from both the left and right” of the political spectrum, “and the debt continues out of control.”
He thinks that government debt default is so unthinkable that there is “a lot of subdued panic in business circles “ and that “most Congressional Republicans are already looking for a way back from the cliff.” He says there is a “committed group in the House apparently willing to take the country over the cliff, but I have to believe that a combination of Republicans and Democrats will run over the so-called Freedom Caucus.”
Bixby believes the best debt policy for the country would be something on the order of the “pay-go” rule that Congress once imposed on itself to pay for new expenditures either by reductions in other parts of the budget or by tax increases. According to Bixby, pay-go was never completely adhered to and was ignored completely to pass the 2017 tax cut.
Bixby suggested that the courage to stick with the “pay-go rule would help tremendously in dealing with the debt much more effectively than monkeying with the dangerous debt limit.”
Ironically, the same extreme Republicans who are apparently, as a matter of principle, willing to sacrifice their country’s economy by not raising the debt limit now, were not bound by the same principle during the Trump years. In Trump’s single four-year term, with Republican support, the debt ceiling was raised three times. Trump promised in the 2016 campaign that he would balance the budget in eight years. Instead he increased it by a record $7 trillion in four years, nearly 25% of the entire national debt accumulated since the time of George Washington.
It needs to be noted, too, that when Barak Obama was a U.S. Senator during the George W. Bush administration, he not only voted against the debt limit increase, but spoke against doing so on the Senate floor. Both Democrats and Republicans have used the debt limit for political advantage.
The financial integrity of the United States is critical to everyone’s well-being. Congress is obligated to face that simple fact, and protect us all from the threat of economic collapse. To do that it has to face up to the politically tough job of limiting spending and providing sufficient revenue to pay the nation’s bills.
Bob Brown is a former MT Secretary of State and State Senate President.