What can be learned from the debt ceiling debate...

Don't trust the government. We are now into day 24,837 of the national debt crisis. It was sometime in mid 1943 when the American debt doubled, and we have been stressing about it ever since. In that time we have raised the debt ceiling countless times, and at least since the Carter years, rancorous debate and heavily partisan voting on the debt ceiling has been the rule rather than the exception. We are not experiencing one of those exceptions. But, there is something very valuable to be gleaned from this current debate that I don't think has been touched on yet, but needs attention. That is, in the political demagogic carnival show of the last months, the Democrats have essentially thrown out the semi-logical arguments that they have made for the need for a Government run retirement and health care program, and deficit spending to boot. So let's address these arguments in turn:

Argument 1) Market Driven Retirement accounts are inferior to Social Security because market accounts are subject to market volatility while Social Security is backed by the full faith and credit of the United States - Well, this is so easily proven a pointless distinction that I probably don't even need to point out the trouble with this argument. But I will make the point anyway. According to the Democrats own demagoguery we as a nation are one debt ceiling vote away from defaulting on the US Debt... so, while the market may fluctuate, by their own argument, Social Security is a debt ceiling vote shy from going away. This isn't really secure footing given that we are now holding this circus act at least once a year.

Argument 2) Funding the US Budget with Medicare and Social Security funds is fiscally sound since the IOUs deposited in these accounts are backed by the full faith and credit of the United States - Well, this second point is even easier to dispel than the first. Again we see that when up against the annual debt ceiling vote, by the Democrats own insistence, the rationale for borrowing this money is shown to be comically false. What good are these IOUs without the affirmative debt ceiling vote? If we are going to default on our debt, and ruin the full faith and credit of the nation on this one vote, then how valuable is that IOU really? Indeed, in an interview with 60 minutes President Obama claimed that he didn't know if the US would be able to pay Social Security and Medicare recipients as soon as August of this year... some three weeks from collapse. This is security, apparently.

 This is what the President wants us to think.... and in thinking it we must ask the important question: then why should we trust Government with our security? It should be clear by now how little "full faith and credit" really means in the age of huge deficits and debt. Efforts to cut spending are efforts to reinforce our nations faith and credit at home and abroad. Seeking ways to "increase revenue" and continue spending as usual is simply a continuance of the policy of cashing in on our nations waning faith and credit.

David Brooks: The Father of No-Brainers

Here is a good example of why David Brooks can't be taken seriously, from his latest OP/ED regarding the current fight in Congress over the debt ceiling.:

If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred million dollars of revenue increases.

 By previous attacks (Klien, WaPo) on the Republicans it has been asserted that the talks broke down with the Republicans when they were offered a 83/17 split on cuts versus new taxes when the Republicans own study sought an 85/15 split. So, if the Democrats are offering "$3 trillion in cuts" that would mean they are seeking more than $600 billion in new taxes. So it is a "few hundred million"... if "few" is defined as "over six hundred thousand".

Brooks is a liar who likes to make wildly inaccurate claims to support whatever subject he feels like flogging that day. He's a wordier Paul Krugman. That his Democrat readers gloss over these wholly inaccurate statements in an effort to give his statements gravitas is as damning of the reader as it is of Brooks. It stares you in the face, daring you to miss it... it is the very crux of his argument, and it's an utter falsehood. But then he is also wrong in his panic over the debt, and again the answer is staring everyone in the face.

The Democrats have agreed to cut $3 to $4 trillion.... lets assume that the $4 trillion is another lie by Brooks, but grant him that the $3 trillion is close to accurate. So, what do we pay per year in servicing the US debt? Well, counting Social Security and Medicare IOUs that sits at about $380 billion annually... but the Social Security and Medicare isn't technically due right now, and we can't default on intergovernmental debt anyway, so we are looking at a mandatory debt payment of about $200 billion to keep from defaulting on our external debt.... and HEY, the Democrats have agreed to cut far more than that.... so we have found a way to service our debt for several more years AND save over a trillion in deficits at the same time.

 So picture this: Some benevolent alien race swoops into out Solar System, decides that we Americans are so awesome that they will pay off every penny of our debt... now imagine that in the wake of having that burden lifted, our Federal Government saw the error in their ways and cut $1.5 trillion from our national budget over the next 10 years... Cutting that $3 trillion is the fiscal equivalent of that scenario, no need to raise taxes. CRISIS AVERTED. Shew! Now, if we could work it so that we cut that additional $1 trillion that Brooks is talking about, that would be enough to even cover increase in debt payments due to that economic recovery that we are supposed to be enjoying any day now. Well, it would cover it with over $500 billion to spare in 2014 and $300 billion to spare in 2020. 

Since I have now found the US government an extra $200+ billion without raising taxes, I now have the authority to spend it (it's a rule, trust me!). I would like to spend $200 billion by increasing the NASA budget 2800%... while cutting the NASA budget on green jobs and Muslim outreach. I would then like to issue a check to every US citizen in the amount of $1,500 annually in 2015, declining to about $300 in 2020 on the strict orders that the money must be spent. Wow, budget cuts, debt relief, and stimulus in one easy plan. You're all welcome.

 (Update: The Brooks article has been updated to use the phrase "a few hundred billion" instead of "a few hundred million" ... now that the statement is closer to accurate, let the absurdity of the statement "a few hundred billion dollars" wash over you)