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Let’s Force Obama Into a Balanced Budget

By: Ned Ryun (Diary)  |  January 11th, 2013 at 07:25 AM  | 

RESIZE: AAA

Let’s start with a simple question: If conservatives had a choice, would we choose to balance the budget now or follow Obama’s model of catastrophic debt instead? For conservatives, the answer is painfully obvious. And the quickest way to a balanced budget is to let the US government hit the debt ceiling. When we reach the debt limit we can only spend what we take in; quite a novel, radical idea in Washington. Of course, how the revenue gets spent gets complicated, but one thing is certain. Upon hitting the ceiling, the executive branch chooses how revenue is allocated. The US government would only default if the President ordered the Treasury Secretary to not pay our debts. It’s practically impossible. It’s less likely than seeing a fish ride a bicycle. CBO estimates the US government will take in $2.6 trillion this year. It costs approximately $220 billion to service the debt and prevent us from defaulting–just 8.5 percent of revenue. In other words, if we hit the debt ceiling, we still have plenty of money to pay the essential bills.

In fact, according to the CBO, we have enough to pay all “mandatory spending” (Medicare, Social Security, veterans benefits, debt payments, etc.) and defense spending, plus have more than $300 billion to use for “discretionary” spending. That’s right. Not only could we run all absolutely essential functions of government, we would still have $300 billion to spare.

Obama’s math doesn’t add up, yet the President and his buddies in the media have convinced people that the government will “default” if we hit the debt ceiling. They say our economy will tank. Explain this: How is a balanced budget bad for the economy? I mean, God forbid we only spend what we take in…

To President Obama and the media, nothing is more frightening than a balanced budget. Just listen to their rhetoric on the debt ceiling. It sounds like they’re talking about the Mayan Apocalypse. It would be “catastrophic,” “cataclysmic,” or worse.It’s almost comical, really.As conservatives, I think we can win the PR battle by fighting for this balanced budget. If President Obama is unwilling to negotiate and write a budget with real entitlement reform, I say we don’t negotiate with him either.Let’s hit the debt ceiling and force President Obama to immediately balance the budget.My intuition is, from there, President Obama might be willing to negotiate. I say we settle for nothing less than a budget which balances in 10 years. If Obama doesn’t want to talk, at least our kids will be saved from billions and trillions of debt.

Now, of course, the Left will counter that the debt ceiling just stops us from being able to pay our bills. They’re wrong–it’s much more than that. The debt ceiling, duly passed by Congress, is there to stop Washington from robbing future generations. It should be used as such.

COMMENTS

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  • wgsampson

    What if the House Republicans man-up and balance the budget – just like every American family has to do. Then they can simply say, “We have a balanced budget, so we don’t need to raise the debt ceiling or pass any continuing resolutions.” Then, they focus all their attention on Harry Reid. I would like to see them trot out a Harry Reid clock (like the national debt clock), except it would add up all the money the taxpayers have paid Harry since he last did his job and passed a budget (any budget).

  • rbdwiggins

    Should congressional Republicans decide to hold firm on the debt ceiling, I hope they’re prepared to engage in a lengthy battle with the Obama Administration over the Fourteenth Amendment. One that is likely to reach constitutional-crisis proportions, because contrary to what many on the left contend, the Fourteenth Amendment is not a blank check to increase the public debt.

  • rbdwiggins

    Do you really think that a congress which refused to raise the debt ceiling would vote to authorize any new federal spending or authorize the Treasury to increase the public debt by issuing any new bonds? Spending beyond the valid public debt would necessarily have to be prioritized.

    You can’t solve a debt problem with more debt. Only real federal spending cuts and sustainable economic growth, accompanied with a dramatic decrease in the size and scope of the federal bureaucracy, will solve our debt problem.

  • fromthesidelines

    Those laws have already been passed. As a consequence, the total debt owed to US creditors will rise regardless of whether the debt limit is increased.

    Suppose Congress authorizes a road is built. Suppose you are hired to build the road. You build it. You send the Government an invoice. If at this point, the government decides to not pay your invoice, that does not magically mean we no longer owe you for the road. We owe you money. Our debt to you, the road builder, has gone up.

    That’s why the debt ceiling does not prevent the total debt from increasing. All it does is shift to whom the debt is owed. We can borrow money from investors to pay for the road, and hence owe the investors. Or, we can not pay for the services rendered, and so in effect, borrow money from you, the road builder. Either way, the debt goes up. We borrow the money from someone.

    Passing laws to build roads, and then later passing laws to deny payment for the roads that were built, does not magically limit our debt. It just shifts the debt from investors (who are more than happy to take the risk), to road builders (who had no intention of doing the work for free, and had every reason to expect getting paid on time.)

  • dfcord

    RDBWiggins,

    Please excuse an observation. You seem to be so eager to get out your talking points that sometimes you miss engaging the in discussion at hand.

    However, I’m not one to pass up to opportunity to learn something new. For example, did you notice that in the ruling from Flemming v. Nestor, there is no mention of “debt” or “default”.
    http://supreme.justia.com/cases/federal/us/363/603/case.html

    I can understand how one might use this precedent in an attempt to make the case you want to make, but if this is the sum-total of what you have, I suggest the case has not been made yet.

    Furthermore, it is beside the point. If the government reneges on a contract or otherwise breaks a promise and then it is in “default” by definition of the term. The fact that the government can default on promises without legal consequence doesn’t change what happened.

    It is the Republicans who are saying a strict adherence to a balanced budget is what is best for the country. If the Republicans truly believe that, then I would expect them to act on that belief.

  • fromthesidelines

    Its a false equivalency. Of course, unpaid social security payments is not debt. But, unpaid invoices for services rendered is definitely debt. When I invoice a customer, and that customer doesn’t pay me, that customer owes me. That doesn’t magically change just b/c the customer is the US Gov. Does your business do work for the US gov? When you invoice them, do you not record a receivable on your balance sheet? And does the gov not record a payable on their balance sheet?

    The point is — not paying people is not paying people. Call it what you want. When a customer owes me money for services my company rendered to them (which is completely unrelated to ss entitlements, or anything of that sort), I call it debt.

  • rbdwiggins

    Anything Congress promises, it can also take away. You are only guaranteed protection if it is a right that is protected by the US Constitution, or subsequent Amendments to the Constitution.

    It may not be fair, but valid public debt has a specific definition, and the accrued property rights of bondholder are protected by the Fourteenth Amendment.

  • rbdwiggins

    “If the government reneges on a contract or otherwise breaks a promise and then it is in “default” by definition of the term“.

    That simply isn’t so just because you say it is. Valid public debt has a specific definition. The Supreme Court recognizes it as the accrued property rights of the holder of an annuity (bondholder), and those rights are protected by the Fourteenth Amendment. Regarding the federal government: Default can only occur as the result of non-payment of the annuity to the bondholders.

    As far as everyone else is concerned: Anything Congress promises can also be taken away. It may not be fair, but it’s just a broken promise.

    As a point of fact: Congressional Democrats have blocked every attempt to pass a Balanced Budget Amendment.

  • fromthesidelines

    I understand your point. Actually, I don’t think our comments are mutually exclusive.

    If your principal point is that 14th Amendment only affords protection to bondholders, and not other creditors — ok, even if that were the case, I still don’t think that this is inconsistent with my original comment.

    I was simply pointing out — limiting the debt ceiling does not inherently limit the debt. It just limits treasury debt, and so shifts debt that will arise from laws already passed to other creditors.

    And worse still, if you are correct — these other creditors have lesser protection under the Constitution. The government can default on, for example, unpaid contracts without legal recourse.

    Well, maybe that’s the case. That would be shame, but you might be right. Thanks for the viewpoint. Its given me something to noodle on.

  • dfcord

    This has gone past the point of ridiculousness…
    de·fault

    (d-fôlt)

    n.

    1. Failure to perform a task or fulfill an obligation,
    especially failure to meet a financial obligation: in
    default on a loan.
    http://www.thefreedictionary.com/default
    Breaking a promise is breaking a promise regardless of what the Supreme Court or the 14th Amendment says.
    Again, the fact that the U.S. Government can legally do whatever it wants in this area doesn’t change the simple, common definition of terms.
    I understand you are laser beamed focused on justifying what you want to have happen to the point of claiming your way is the only way.
    But it simply isn’t the case.

  • rbdwiggins

    The Treasury can’t issue new bonds without congressional authorization. I can’t picture a world in which Congress gives up its constitutional power under Article I, Section 8, and authorizes Treasury to create a sub-prime market for government bonds that is not subject to the debt limit.

  • rbdwiggins

    Denial won’t change the facts. The common definition is irrelevant, because the federal government plays under different rules than the common man.

  • fromthesidelines

    (calling it a “sub-prime” market is a little bit of a misappropriation of the term, but that aside). Futures contracts are not new bonds. They are contracts to purchase bonds in the future. If Congress never authorizes the issuance of those bonds, the Treasury defaults on the contracts, which — according to your interpretation of the 14th amendment — it is fully able to do without legal recourse. Its entirely consistent with the Constitution, both article 8 and the 14th, as without Congressional approval, no new bonds are ever issued. Investors that buy the futures take the risk.

    The more I think about it, I really can’t see how this hasn’t come up yet. Unless, of course, your interpretation of the 14th is incorrect :)

    In any case, I’ll leave it there, I don’t want to be guilty of threadjacking for what could probably be a very interesting side conversation. Thanks again for sharing your view, and engaging me in thoughtful conversation.

  • danilaw

    I like the Harry Reid clock.

  • checkmate2012

    Me too! The symbolism describes the just say no Senate on getting serious about the debt, way more than chatter! It’s not the R’s, it’s the The Reid.

  • commonsenseobserver

    Great idea.