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U.S. News and Commentary



Thursday
Jan212010

Democrat aim to increase debt limit is wakeup call to U.S. taxpayer

Commentary by Kay B. Day

Had it not been for Republican Scott Brown’s historic victory in Massachusetts, the Democrat Party’s aim to increase the U.S. debt limit might take the top spot in the blogosphere right now. The Associated Press said on Wednesday the government needs “an additional $1.9 trillion to pay its bills, a record increase that would permit the national debt to reach $14.3 trillion.”

If the country had a platform for a national town crier, that $1.9 trillion figure would be shouted at the top of his lungs. [Article continues below graphic.]

The US Treasury provides the public with information about US debit and who holds it.
The truly disturbing element in this request is a complete lack of attention to downsizing the federal government. The only way to avoid continuing to raise the debt limit is to do what the private sector does in hard times—reduce expenses. There are exceptions, of course. Crony corporations get bailouts. Taxpayers fund those too, and we hear politicians tell us we’ll get our money back. How?

No one ever mentions exactly how we, the taxpayers, will get any money back if bailout funds are repaid.

On the Internet there is a complete list of U.S. Government Departments and Agencies. Even a brief stroll through the vast link garden on that site will shed light on why our government needs more money. We have created a leviathan for a model of federal governance, with an emphasis on growing it to a point where it will simply gobble up most private wealth.

The bill will come due as all bills do.

It has come due for Medicaid, Medicare and SCHIP. The bill has come due for AMTRAK, the Post Office and Fannie Mae and Freddie Mac. And it will come due as we fund a water taxi service in Connecticut ($1.9 million) and the Old Tiger Stadium Conservancy in Michigan ($3.8 million).

Citizens Against Government Waste, a watchdog organization, said The 2009 Pig Book revealed 10,160 earmarks worth $19.6 billion.

We could talk about the fact the government hands out tax refunds to those who pay no taxes at all, but that discussion would run longer than space permits.

One interesting disclosure was included in the AP story: “Arguing over the debt limit provides a forum for Republicans to blame Democrats for rising deficits and spiraling debt, even though responsibility for the government's financial straits can be shared by both political parties.”

That salient point contradicts the administration, Democrat leaders in Congress and the entire leftwing constituency’s pinning blame on Republicans. Even some Republicans pinned all the blame on Republicans. The US Report has taken every opportunity to point out blame for US financials should be assigned to both parties. Thus it was comforting to learn the AP, an entity we perceive as tilting towards the Democrats, apparently agrees with our assessment.

A troubling revelation can be found in a post at the Congressional Budget Office blog. CBO addressed the matter of Freddie Mac and Fannie Mae, two government sponsored enterprises that back approximately half the mortgages in the U.S. After the government assumed control of these financial disasters, CBO rightfully concluded their operations should be included in the federal budget.

The CBO blog said, “In contrast, the Administration, which ultimately determines what is included in the budget, considers Fannie Mae and Freddie Mac to be nongovernmental entities for federal budgeting purposes.”

CBO further noted, “In the baseline budget projections it published in 2009, CBO accounted for the cost of the entities’ operations in the federal budget as if they were being conducted by a federal agency. That is, CBO treated the mortgages owned or guaranteed by Fannie Mae and Freddie Mac as loans and loan guarantees of the federal government. The operations of Fannie Mae and Freddie Mac added $291 billion to CBO’s August baseline estimate of federal outlays for fiscal year 2009 and $99 billion to the spending projected for the 2010–2019 period.”

Fannie and Freddie remain outside the budget. And those money pits will still need federal funds—“OMB has estimated that cash outlays from the Treasury to the two entities will total another $65 billion over the 2010–2019 period.”

The single most important issue for our people and our government should be real government reform. From applying principles of attrition to federal agencies so that the federal employment rolls are gradually reduced to enacting a cease and desist tactic to pay for local projects that are non-vital in nature and certainly not federal concerns, there must be a reformer somewhere in the land who is smart enough to see the light.

We have grown a government we cannot sustain. We must choose between reducing government spending and taking the hit now or permitting the government to grow to a size that will ultimately demand almost all wealth be controlled, filtered and dispensed by the government.

The Democrats will likely not admit that. The Republicans will admit it but may be reluctant to take steps to actually downsize because states are reliant on all that federal pork.

Increasing the debt limit again is a loud wakeup call. We ignore it at our own peril.

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