So our federal government has once again reached the mandated debt ceiling that was established...by the federal government.
Interesting...and irritating all at the same time.
Surprisingly, this threshold isn't a rare occurrence as one might think. As a matter of fact as a nation, we've been here over 70 times before this last one. During that time, Democrats have controlled both Houses and the While House, Republicans have controlled both Houses and the White House, and ever other mix in between the two scenarios.
In each case, up went the debt ceiling as if we were living in some utopian society where the GDP always grows at double digit rates and it never rains on Saturday.
So, why is it such a big issue all of a sudden? (must be Obama's fault)
Well, the answer to that $14 trillion question is because the debt itself is so huge relative to GDP. We're on the verge of that famous 90%-100% debt-to-GDP ratio where many believe a sovereign debt crisis is inevitable (see Greece and Ireland).
A vote that used to be treated as lackadaisical is now the subject of massive nervousness in Washington. Why now you say again? Because Americans are finally paying attention to the math and know if borrowing into bankruptcy is possible on a personal level...(i.e. your debt ceiling exceeds your ability to pay said debt) it's sure got to be possible on a national one too.
The time has come and gone to discuss and debate how we got to this point in our fiscal house. Such reflection may be important at some point in the future to ensure we don't repeat the mess we find ourselves in today, but right now we need bipartisan action on a major scale.
Sure massive cuts in our federal budget are going to hurt. Nobody denies that...well...no rational person denies that fact. But so much is broken in our current system of federal spending that only by making deep cuts can real changes be made to fix the system. Necessary chances. We've got to get our fiscal house in order and radical changes through spending cuts is the only feasible, viable option.
Take a second and think about the ridiculous circumstances involving waste and abuse of tax dollars that you personally are aware of involving our federal and state governments (yes, states have a claim in this also as a distributing arm of some federal government programs). Let me give you only two of the many from my list:
Just this past week, I was talking to a friend about a situation he was personally familiar with involving government entitlements. A lady living near him was trying to sell her monthly food stamps to his wife below their face value. The mother of two receives $500 a month in food stamps, but was willing to accept half for the current and following two months ($1500 for $750). Seems she had taken her federal income tax return (based solely on federal entitlements) of a little over $5000 and, among other useless things, put a down payment on a big SUV at a local Buy Here, Pay Here auto dealer. When she missed a payment, they came and got the vehicle. Now she needed several hundred dollars to get the vehicle back, oh...and get her cell phone turned back on too.
Did I mention she doesn't work and lives with her mom? Didn't mean to leave that out. She doesn't work yet receives thousands of dollars in government hand outs from our tax dollars. Makes you wonder how her kids eat. My friend's wife didn't bite on the offer by the way.
This next one is a little more risky for me to share. I work for a DoD contractor, and we sell 'widgets' directly to a number of military bases worldwide. In all honesty, our company works very hard at providing excellent pricing not just out of good stewardship but also because we are in open competition with other DoD suppliers. The problem occurs when particular 'widgets' we could sell directly to a base are systematically divided up into block contracts for large conglomerate contractors (read- who pay lobbyist), who in turn bid the 'widgets' out to other subcontractors (including us) and then often award the bids to a contractor under a special government designator (i.e. female/minority owned company, disabled vet, etc.), who then in turn buys the 'widgets' from a distributor...you guessed it...us. So something that could have been purchased by the end user at a distribution level price directly from us originally (as is often the case) is marked up not only once more by the block contractor, but again by the third different subcontractor involved as the procurement moves through the often lunatic workings of the military industrial complex on its way to the end user.
If only I were making this stuff up...
Only in an environment of unchecked funding can such absurdities exist and grow. As the debate continues to roar on about raising our national debt ceiling, take a moment and examine similar situations you personally know about like the two I've shared. Maybe one is as drastic as this situation reported just yesterday in news sources where a lottery winner of millions receives food stamps. Now multiple those cases several million times, and it's easy to see how we've gotten to where our country needs to borrow more than $14 trillion dollars just to pay the outstanding bills.
It all starts at home with anyone and everyone as crazy mad about this as I am picking up the phone or dropping a line to their elected representative, Republicans and/or Democrats, and demanding the political games stop now and necessary action be taken immediately. Yes Mr. Politician, the American public does realize there's an important election just next year. The real question is- do you?
Raise the debt ceiling to avoid a devastating default, this one last time, then balance the national budget and lock that in with a Constitutional Amendment...period.