October 24, 2013 | Vol. 117 -- No. 27

Keep kicking the debt can until the next time

In our opinion

Last Wednesday, Congress did what they appear to be experts at – and that’s very little.

Sure, they did do their best at dueling demagoguery. It’s seemingly what they spend the most time at earning their $175,000 a year. Oh, they did get their regular workout kicking the very dented and nearly crushed debt can down the pothole-pocked road.

A 285-144 vote in the House of Representatives, which followed 81-18 approval in the Senate, allowed about 18-percent of the federal government to reopen and the government to keep spending uncontrollably as they do so well.

President Obama followed Congressional approval when he signed yet another continuing resolution funding the government through Jan. 15 and raising the nation’s debt ceiling until Feb. 7.

The total debt stood at $17,085,395,024,387.53 as of this past Monday morning, surpassing the historical barrier sometime last Friday. When one spends at the rate of over $300 million a day there was no finish-line camera to catch the exact moment.

Once again we’ve been taken to the so-called edge of yet another fiscal cliff. Our leaders are so adept in fixing the blame, but far away from repairing the problem.

Pulled back from the brink, a place it seems we face regularly, one has to wonder what might really happen if no one blinked in this game of congressional chicken? While the amateur accountants and auditors on the floors of Congress warned of absolute Armageddon, others more schooled in finance thought otherwise.

Vernon L. Smith, suggested that the president’s claim that, “every economist out there is saying” that “millions of Americans – not just federal workers – everybody, faces real economic hardship” if the debt ceiling isn’t raised, simply is not true

And while Smith might have a common name, the 2002 co-winner of the Nobel Prize in Economics maybe ought to have a pretty solid understanding of how things work. We’re not sure of the extent of the president’s personal business acumen.

History is on the side of the U.S., Smith explained. The U.S. is one of the few countries in the world and in history that has never defaulted on its debt.

Remember, this is a government that takes in $2.5 trillion a year and was not really running out of money in the piggy bank. Its $3.6 trillion yearly spending addiction was the real issue.

And that has another camp pushing for a default because the current debt – while it has spiraled upward out of control during the last two administrations – goes back in history to post-Revolutionary War times when the federal government assumed the states’ costs of that conflict.

If we “repudiate” – or refuse to accept or support – on the debt, in the real world we declare a form of bankruptcy. Our credit cards are chopped up and we must live off of what we earn and that’s what some hardline conservatives think is the proper path.

It’s somewhat of a logical argument until one considers to whom that debt has been incurred.

China owns a little over 20 percent of the $5.6758 trillion held by foreign countries. The rest of the more than $17 trillion debt is owed by either the American people, or by the U.S. government to itself. About 45 percent is money borrowed from we the people and places like the Social Security Trust Fund, for example.

With the latest “sky is falling” episode behind us, now the country awaits the next crisis, be it foreign or domestic. Until that happens, 316 million citizens in this country can bide the time watching their $54,000 share of this debt continue to grow.

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