sonofshamwow
08-04-2011, 01:23 PM
http://www.mlive.com/opinion/grand-rapids/index.ssf/2011/08/guest_commentary_debt_ceiling.html
Guest Commentary: The debt ceiling deal -- an agreement to do nothing
By: Rep. Justin Amash
Last week, the federal government utterly failed to produce the debt ceiling deal that the American people deserve. Instead, Republicans and Democrats came together, realized that real economic reforms would require politically difficult compromises, and agreed to do nothing except promise to work on it later."
To excuse their failure, both sides made up scary claims about a coming “default” when, in fact, simple math shows that default was impossible. I joined 65 other House Republicans and 95 Democrats in voting “no.”
In the end, the deal had the impact of a rounding error on our out-of-control budget. The federal government takes in around $6 billion a day and spends $10 billion. That means $4 billion per day is borrowed. Total enforceable cuts in this deal were $21 billion for all of next year. That’s less than one penny of cuts for every dollar of government spending — a small blip on a spending graph that slopes upward into perpetuity.
The rest of the “cuts” in the deal — the ones the politicians bragged about — are promises to pass laws that slow the growth of spending in the future. Promises to pass smaller spending increases are not cuts, and, even if they were, Washington’s reputation for keeping promises is not good.
On both sides of the aisle, politicians claimed that they took a bad deal because the alternative was a doomsday “default” that would sink the American economy. But the math does not support their claims. The Treasury takes in about $180 billion in receipts and pays out about $20 billion in loan interest each month. Default on our debt obligations was never more than a scare tactic. As Yale Law Professor Bruce Ackerman noted last week, “There is zero — and I mean zero — chance that the United States will default on its debt even under the worst-case scenario.”
A much better deal was possible, but most politicians were unwilling to make real compromises. Republicans needed to accept practical reductions in military spending and the elimination of special tax breaks and subsidies for people with political connections. Democrats needed to accept reasonable reforms to Social Security, Medicare, and Medicaid that would keep these programs viable and preserve most benefits. These are necessary, difficult compromises. If we wait until we run out of money and our creditors stop lending to us, the cuts will be more abrupt, larger, and more devastating for the most vulnerable Americans.
Another sensible compromise would have been for Congress to pass a well-structured balanced budget amendment. Decades of deficit spending have shown that the politicized legislative process does not produce balanced budgets.
I have introduced my own version of a balanced budget amendment, which pays down the debt over time, allows deficit spending in recessions, provides for a supermajority override in emergencies, and phases in over 10 years. It has earned strong bipartisan support and more than 25 cosponsors. With three-quarters of the public favoring such an amendment, Congress should have sent a balanced budget amendment to the American people for their consideration as part of a debt ceiling compromise.
The tragedy of the debt ceiling deal is that it is a political tactic, not a policy compromise. It allows each side to claim a political win for the campaign trail without actually accomplishing anything. Because the deal doesn’t seriously address the government’s growing fiscal crisis, I couldn’t support it. The American people know better, too. The day the deal was announced, the stock market sank. A recent Rasmussen poll shows only 22 percent of the public support the deal.
Today’s government debt is already more than $45,000 for every man, woman, and child. Each month the number goes up another $400 per person. Every cent has to be paid back by the American people either through higher taxes or paychecks that buy less at the store because of inflation.
Enough is enough.
U.S. Rep. Justin Amash, R-Cascade Township, is a member of Congress representing the 3rd Congressional District.
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Guest Commentary: The debt ceiling deal -- an agreement to do nothing
By: Rep. Justin Amash
Last week, the federal government utterly failed to produce the debt ceiling deal that the American people deserve. Instead, Republicans and Democrats came together, realized that real economic reforms would require politically difficult compromises, and agreed to do nothing except promise to work on it later."
To excuse their failure, both sides made up scary claims about a coming “default” when, in fact, simple math shows that default was impossible. I joined 65 other House Republicans and 95 Democrats in voting “no.”
In the end, the deal had the impact of a rounding error on our out-of-control budget. The federal government takes in around $6 billion a day and spends $10 billion. That means $4 billion per day is borrowed. Total enforceable cuts in this deal were $21 billion for all of next year. That’s less than one penny of cuts for every dollar of government spending — a small blip on a spending graph that slopes upward into perpetuity.
The rest of the “cuts” in the deal — the ones the politicians bragged about — are promises to pass laws that slow the growth of spending in the future. Promises to pass smaller spending increases are not cuts, and, even if they were, Washington’s reputation for keeping promises is not good.
On both sides of the aisle, politicians claimed that they took a bad deal because the alternative was a doomsday “default” that would sink the American economy. But the math does not support their claims. The Treasury takes in about $180 billion in receipts and pays out about $20 billion in loan interest each month. Default on our debt obligations was never more than a scare tactic. As Yale Law Professor Bruce Ackerman noted last week, “There is zero — and I mean zero — chance that the United States will default on its debt even under the worst-case scenario.”
A much better deal was possible, but most politicians were unwilling to make real compromises. Republicans needed to accept practical reductions in military spending and the elimination of special tax breaks and subsidies for people with political connections. Democrats needed to accept reasonable reforms to Social Security, Medicare, and Medicaid that would keep these programs viable and preserve most benefits. These are necessary, difficult compromises. If we wait until we run out of money and our creditors stop lending to us, the cuts will be more abrupt, larger, and more devastating for the most vulnerable Americans.
Another sensible compromise would have been for Congress to pass a well-structured balanced budget amendment. Decades of deficit spending have shown that the politicized legislative process does not produce balanced budgets.
I have introduced my own version of a balanced budget amendment, which pays down the debt over time, allows deficit spending in recessions, provides for a supermajority override in emergencies, and phases in over 10 years. It has earned strong bipartisan support and more than 25 cosponsors. With three-quarters of the public favoring such an amendment, Congress should have sent a balanced budget amendment to the American people for their consideration as part of a debt ceiling compromise.
The tragedy of the debt ceiling deal is that it is a political tactic, not a policy compromise. It allows each side to claim a political win for the campaign trail without actually accomplishing anything. Because the deal doesn’t seriously address the government’s growing fiscal crisis, I couldn’t support it. The American people know better, too. The day the deal was announced, the stock market sank. A recent Rasmussen poll shows only 22 percent of the public support the deal.
Today’s government debt is already more than $45,000 for every man, woman, and child. Each month the number goes up another $400 per person. Every cent has to be paid back by the American people either through higher taxes or paychecks that buy less at the store because of inflation.
Enough is enough.
U.S. Rep. Justin Amash, R-Cascade Township, is a member of Congress representing the 3rd Congressional District.
Share this message!