I thought about apologizing for writing about something other than food – again – as I have been in my last couple of posts. But I decided against it. That’s what a blog is; a place where anyone can write about what’s on their mind and put it out there for others to read. So the choice is yours, my friends – read it or not.
I hear people say that they don’t vote because their vote doesn’t matter. If I could string all those people together and take them to the poles, their votes would indeed matter. I cannot effect National change with my ramblings on this blog, right? After all, I’m just one little person in some obscure coastal town in North Carolina who spends her days surrounded by all things kitchen and food. I mean, what could I possibly know about the complex inner-workings of our Government? Why would I waste my time ranting about it here?
The answer is simple: “The only thing necessary for the triumph of evil is that good men should do nothing.”- Edmund Burke
I sleep better at night when I have done what I can to contribute to the resolution of problems rather than the exacerbation of them, even if no one pays any attention to me at all. When I have done the right thing, I rest easy. The outcome of current Government fiascos is not up to me, but my own actions do indeed matter – they are an expression of my true character. I am doing an insane amount of research and writing this blog post that has nothing to do with food because I am disturbed by what is going on in our Government and have no other outlet for my frustrations. I can’t make them stop, at least not until election day rolls around again. But I can make it known that I am not in agreement with the actions of our Government, and unlike Congress, I can point to documented reasons for my beliefs. I don’t ever want anyone to think I was complicit in the ridiculous actions (or lack thereof) of our elected officials. I am guilty of voting for the wrong people, perhaps. When faced with a field of undesirables, what is one to do? I will do better next time – if the choices are better.
By writing this post, I hope to spur some people to do their own research and stop believing the babble heard on television. For all of our Government’s failings, they have done an excellent job of being transparent if you have the patience to dig through the volumes of paper they have generated to find the truth. Here, I have done some of the digging for you.
Debt Ceiling: The End of Life as We Know It?
So what the heck is our Federal Government obligated to pay, not obligated to pay, and just what is all this talk of the so-called “Debt Ceiling” about? How much do we owe, and to whom, and what happens if we don’t pay it?
If I listen to the mainstream media outlets, they want me to believe that the debt ceiling not being increased will bring the Government to a complete standstill, and that the Republicans are to blame for not agreeing to the plan laid out by the Democrats. Seems simple enough, right? We all enjoy the relief that comes with having affixed blame somewhere. But let’s dial this back a bit and understand what’s really going on, shall we?
The truth is that the National Debt Limit is a moving target set by Congress and changed on a regular basis. For a very long time now, my entire lifetime plus most of my mother’s, Congress has been increasing the debt limit continuously. Look at the history yourself – don’t take my word for it. Increasing the debt limit directly implies two key things: first, that we don’t have enough money to operate our Government as it presently exists; and second, that despite being broke, Congress intends to spend more money that they don’t have. Indirectly, this implies that the money must come from somewhere to pay these bills. (It helps in this moment to remember that our Government does not generate any revenue of its own; it merely collects taxes from those persons and entities that earn it through legitimate enterprise and labor.)
If we, as individuals, behave as Congress has and does with regard to debt, we would be in bankruptcy court within 6 months, forced to sell everything we own to pay our debts. Then we would live with a decade or more of people being unwilling to lend us money of any amount. Congress has been on this spending spree for decades, unimpeded by any negative consequences. Imagine if you can that the National Debt is presently $16,747,411,584,091.53 – that’s nearly 17 trillion dollars. Much of that debt – over $10 trillion dollars – is privately held (according to the US Office of Debt Management in March 2013). Another $6 trillion of that debt is owned by foreign interests, about $1.5 trillion is backed by investment in Government Bonds & Securities (anyone with a mutual fund, pension plan, etc.), and a big chunk is owned by Banks and Insurance Companies (the same entities we bailed out a couple years ago), our States, and the Federal Government itself (yep, our Government can borrow from itself despite being broke). Of interest to me is the amount of debt owned by holders of U.S. Savings Bonds – about $180 billion dollars. Good for you if you have cashed yours in and put the money under your mattress. You are going to need it. But I digress.
So is crashing into the current debt ceiling going to cripple Government and change our way of life? Failure of Congress to reach an agreement on raising the debt limit will not completely cripple the Federal Government. It will, however, take choices away from the lawmakers. Their predecessors have made certain sections of the Code of Federal Regulations (CFR) “positive,” and some of those positive or “statutory” sections of the United States Code (USC) have mandatory funding attached to them. Things like National Defense (32 USC), The President (3 USC), Federal Elections (11 USC), Judiciary (28 USC), Veterans Benefits (38 USC), Highways (23 USC) and Transportation (49 USC) must be funded, though some sections of those regulations are not statutory and can be altered. Other titles or sections in the USC, such as Public Health/Housing & Urban Development (42 USC), Employee’s Benefits (20 USC, which includes Social Security), Internal Revenue (26 USC, which includes Social Security Disability), Banks & Banking, Food & Drugs (21 USC), and Education (34 USC) are not statutory parts of our law and will be among the first to have funding withdrawn. (You may observe here the distinction between statutory and non-statutory, as this is also the line along which Congress fights; they can’t change the statutory things so they fight over the non-statutory items and base their political campaigns on these matters as well).
It could easily be concluded that all of the non-statutory laws and programs that have been passed by Congress over the decades have served to cripple our Government’s ability to fund the statutory programs. Our Congresses have historically written checks for their pet projects (non-statutory feel-good programs like public housing, public education, and farm subsidies – ironically called “pork” by the media) that have caused the checks written to our core National programs (Defense, Transportation, Veterans benefits) to bounce. More borrowing was done to keep the checks from bouncing and ‘round we go, every year.
Personally, I hope the Republicans keep stonewalling and refuse to raise the debt limit under the proposed terms. It isn’t that I agree with their plans, either; rather, I just want our Government to become solvent. Continuing to write checks we can’t cash is not the way to solvency. I don’t claim to have all the answers, but I don’t have too much paycheck left to sacrifice for the common good before I too will need public assistance to feed myself and pay my bills.
Heavy reliance on Government to provide basic needs does not work. It’s expensive, and it is not sustainable. History shows us many examples of this worldwide, and it is still on display in places like Cuba where they are struggling with how to allow private enterprise without giving up Government control. Their Government promised to provide everything for the people, all of whom worked for the Government. Realizing the error of their ways (being broke with no plan), the Cuban Government is now faced with the reality that they cannot provide everything for their people. Many European countries are at a similar crossroads where their social ideals have gotten too expensive to sustain. We are right behind them on the same track, and it won’t work for us either. Dependency breeds laziness and, eventually, contempt. Human beings don’t value things if they don’t have to work for them, and they are not inclined to work for them if they will be provided for them. Moreover, our founders broke with England to avoid the very situation in which we now find ourselves – being heavily taxed with no real voice among the decision makers. Frankly, I don’t think the so-called decision makers are really making decisions based on their consciences anymore; I think they are doing what the people with the money are telling them to do.
So yes, if this stalemate continues, additional programs will be shut down and many of us will be directly impacted by it. The Government literally has to choose which programs to shut down temporarily to pay for essential (statutory) programs and services. Who will make the call about what is essential and what isn’t? It is largely written into law already in the US Code, where some Titles are statutory and must be funded. Veteran’s Disability Compensation (VDC) and the Military are among those that must be funded; civilian Defense worker’s salaries and Social Security Disability Income (SSDI) payments are not. If there is any money left after the statutory obligations are paid, it will probably be up to the White House to decide who gets it. I wouldn’t want to be in their shoes.
Credit Ratings and Congress: Hostages of the Monster They Created
Our financial system in this country is very complex; but I find that most of the complexity exists to camouflage the realities of the system. At its core, it is not really all that complex. The dirty little secret is this: when you use private monies to fund public projects, the public administrators of the funded programs are unavoidably beholden to the lenders. There is no way to avoid personal agendas when you borrow money. Even your auto loan is subject to the whims of the organization from which you borrowed; there is undoubtedly language in your contract that allows them to call the loan at any moment, leaving you forced to pay the balance or return the vehicle. Just look for it, I guarantee it is there, perhaps in some obscure paragraphs that do not seem applicable to you – bank legal jargon. Most legitimate lenders have a corporate policy of not calling loans unnecessarily, but they have the option if circumstances should make it prudent for them. If they decided to do so, they would not be the least bit concerned about you. So it is with loans to our Government from private investors and foreign interests; Government is beholden to those interests and their agendas. Do what we want or we will call the loan – that is the message that our lawmakers are hearing from investors.
So if you are thinking that this little situation we are in over the Debt Ceiling is just our elected officials behaving badly and fighting amongst themselves, think again. The ‘lenders’ are undoubtedly on the phone with our Senator’s aides telling them what needs to happen to avoid them calling the loans, and reminding them of the unofficial terms under which the loans were originally given.
The very banks and insurance companies that were bailed out by the Government in 2008 under TARP are among the Government’s creditors now. These banks have heavily invested in bonds and treasury notes in exchange for the bail outs. Just as it has become difficult for private citizens to obtain loans under the stringent standards these lenders now apply, so too is it difficult for the Government to obtain loans. Banks know better than any of us how great a risk our Federal Government is as a borrower. Our lawmakers created this banking monster, and now they are worried that the banks will not fund them if they lose their AAA credit rating. Read this speech by Secretary of the Treasury Lew last month and you will see what I am talking about. He says they have already used up the reserve “cash box” funds and don’t have any “extraordinary measures” left to employ as of October 16th. Guess what day it is today?
The debt ceiling has officially been reached. The cash box is empty.
Filling the Empty Cash Box
There are essentially five ways that our country’s empty cash box can be refilled.
- Domestic Loans – from Private Individuals, Private Corporations, and through additional Bond initiatives (Smart, rich people who want control of our Government)
- Foreign Loans – China is chief among the possible lenders, and is already a key supporter of our Federal Government (Smart, rich, Foreign individuals and Governments who want control of our Government)
- Corporate Taxes – Raising taxes for corporations, giving the largest corporations ‘exemptions’ to facilitate them providing loans so that the status quo can be maintained, leaving small companies to carry the burden and eventually close their doors
- Income Taxes – Raising income taxes for individuals (you and me), and levying new fines (such as the fines for not obtaining health insurance, which is just a tax with another name)
- Program Cuts – Reducing or eliminating non-essential Government programs to free up money to be used on essential (statutory) programs
In order to take any of these measures but the last, the debt limit must be raised. This is the real argument in Washington; some of our legislators actually want to consider entering default and beginning to move toward solvency; most do not.
Raising the Debt Limit: Inevitable?
Raising the debt limit allows Government to continue to operate as it is rather than cut programs. It’s pretty clear Congress doesn’t want to cut programs; trying to fund new programs associated within the American Recovery and Reinvestment Act (ARRA, aka Obama Care et al) is how we got to this point. Existing programs were not fully funded when these additional measures were enacted; there never was a plan to pay for them other than to raid the cash box and hope for the best.
The non-essential programs that Government refuses to cut are the programs enacted to kiss the asses of the people who loaned them money before, and to chip away at our paychecks and personal liberties, thus exercising ever-increasing control over us. Congress can’t cut those programs – those old loans might be called in by the previous investors, and where will that leave them? In Barney. Barney Rubble. Trouble!!!
There is no easy way out of this mess, certainly not if you are an elected official. There is no way for Congress to avoid getting mud in their eye. They are literally living with the consequences of their actions and the actions of those who went before them. Problems of money, property, and prestige have come to bite them in the ass because they took loans from outsiders who expect favors in return. That, my friends, is the bottom line.
Its spelled c-o-r-r-u-p-t-i-o-n.
The only real question facing our lawmakers right now is: Whose ass will they kiss this time?
What would I do? I would do exactly what is supposed to be done: fund the positive titles in the US Code (that’s why they are statutory – they are a priority) and start slashing all the non-essential people, places, and things. I would start living within my means right now today (pay as you go, don’t buy what you can’t pay for immediately), and start working on a plan to keep it that way. The alternative is a steady march toward bankruptcy, which will only serve to make us even more vulnerable to corruption and foreign interests down the road.
Suck it up Congress – do the right thing. Your constituents might even have a little respect for you if you did.