Well, the gentlemen in Washington have done it again.
We are treated to televised announcements by Harry Reid and Mitch McConnell telling us that ‘the system works.’ Once again, we hear that politics is the art of compromise, that each side got less than they wanted, but all it was possible to get.
Here’s what I understand has been done:
1. Congress has raised the debt ceiling by something like 3 trillion dollars. Which means that the national debt can swell from 14 trillion to about 17 trillion without bumping up against the statutory maximum.
2. Congress has committed to ‘spending cuts’ also known as ‘deficit reduction’ of something over 2 trillion dollars.
3. About three quarters of those spending cuts are yet to be identified. A committee of 12 legislators will be appointed to come in with recommendations on the subject.
As I understand it, the new debt ceiling should last until about March of 2013. So the federal government now has its credit limit boosted high enough so that it can continue to borrow money to live on for about another year and a half.
Isn’t that wonderful news?
We get to spend an additional 3 trillion dollars we don’t have, provided, of course, that we can agree on not spending 2 trillion we already have agreed to spend.
Our elected representatives have decided to postpone taking any steps toward fiscal responsibility for another eighteen months. Then, of course, we will get to do it all over again. With a new Congress and either a new or a renewed executive office.
When will we Americans begin to realize that it doesn’t make any difference who wins the elections as long as the system is broken?
Our two hundred year old constitution simply does not address the question of fiscal integrity. Our forefathers apparently assumed that the elected representatives of the people would not borrow more than necessary. And would provide for timely repayment of our debts.
Didn’t they know that voters have a tendency to vote themselves rich? Weren’t they aware that democracies throughout history have lasted less than 200 years because they go broke ?
Frankly, it’s hard for me to understand how a nation can go broke when it has the power to coin money and issue currency.
If counterfeiters can get rich printing hundred dollar bills, why can’t the federal government?
I looked at the annual reports of the U.S. mint and the Bureau of Engraving and Printing. Last year the mint turned in a piddling profit of $405.8 million. The B.E.P. was worse. It made only $43,428,000.
Of course, the Bureau has a problem in that it has only one customer, the Federal Reserve Bank. The Bureau of Engraving and Printing is part of the United States Department of Treasury. It cranks out about 6 billion greenbacks every year, which it sells to the Fed for a little less than ten cents apiece.
Can’t make a lot of money selling hundred dollar bills for ten cents apiece, now can you?
Maybe it’s time for the people of the United States to realize that our government is in the business of manufacturing currency.
Our Constitution should require that we manufacture enough every year to pay the debts of the government. We should never run a deficit. We should never have to borrow money.
Wouldn’t that cause inflation?
Only if we spend too much. And if we do, the consequences will be immediate. We will pay the price of our own profligacy.
Not our children and grandchildren.