Debt cri­sis woes aren’t too dire for our lead­ers

The Washington Times Weekly - - Politics -

Just how dire is the cri­sis over the $14,294,000,000,000 debt ceil­ing, which Amer­ica will hit on about May 16?

So dire that Pres­i­dent Obama spent much of last week traips­ing across the West col­lect­ing cam­paign cash (and hit the golf course for Round No. 65 on April 23). So dire that Congress headed off on a two-week va­ca­tion (and Sen. Harry Reid jet­ted off to China on a 10-day jun­ket with nine col­leagues, cost­ing tax­pay­ers mil­lions).

So dire that lawmakers have sched­uled their first ma­jor meet­ing on the is­sue for May 5, 11 days be­fore Amer­ica goes into global de­fault. And, last, so dire that the “smartest pres­i­dent ever” has put his top man on it, Vice Pres­i­dent Joe Biden.

The mes­sage from the un­miffed politi­cos in­side the Belt­way is clear: When you’re $14 tril­lion in debt, what’s an­other tril­lion or two? Let’s just get an­other credit card, even if we have to pay 29.9 per­cent, and charge it up.

Democrats have staked out some odd new rhetor­i­cal ter­ri­tory: Repub­li­cans who re­ject a move to raise the debt ceil­ing, they say, are threat­en­ing U.S. na­tional se­cu­rity and pos­si­bly putting in jeop­ardy the life of ev­ery man, woman and child in Amer­ica.

The White House has its own flour­ish: The pres­i­dent is more con­cerned about the “full faith and credit” of the United States around the world, at least ac­cord­ing to flack Jay Car­ney, who has used the phrase ap­prox­i­mately 1,487 times in the past few weeks.

The sit­u­a­tion is al­ready be­yond bad: If Amer­ica walked into a Hyundai deal­er­ship in­tent on buy­ing a 2011 Elantra, the sales­man would pull her credit scores and laugh her out of the show­room. And that’s just what Stan­dard & Poor’s, one of three main agen­cies that rate the abil­ity of sov­er­eign na­tions to re­pay their debts, did two weeks ago. The agency low­ered its out­look for Amer­ica’s long-term AAA credit rat­ing from “sta­ble” to “neg­a­tive.”

But Amer­ica’s pres­i­dent hardly bat­ted an eye, and lawmakers yawned. How lit­tle does Congress care about the bal­loon­ing debt? Repub­li­cans cheered from the rafters when they passed a $38 bil­lion spend­ing cut; but on one re­cent day, the debt rose by $34.5 bil­lion. Ad­mit­tedly an atyp­i­cal day, April 15. But still: in one day.

Democrats, on the other hand, have of­fered al­most no vi­able op­tions, in­stead opt­ing to dem­a­gogue the is­sue along the lines of the 1980s Medis­care mis­in­for­ma­tion cam­paign.

Mr. Obama has dis­missed a GOP plan to cut the na­tional debt by $6 tril­lion, call­ing it “rad­i­cal” (and he should know). But what else would such a plan be?

Here are the sim­ple facts: Amer­i­cans paid in $2.2 tril­lion in taxes last year. But the gov­ern­ment paid out to Amer­i­cans $2.3 tril­lion in ex­panded un­em­ploy­ment ben­e­fits, So­cial Se­cu­rity, Medi­care, Med­i­caid, etc. (the first time that’s hap­pened since the Great De­pres­sion). And that’s even be­fore pay­ing for three wars and ev­ery­thing else the fed­eral gov­ern­ment funds.

Maybe the United States needs a lit­tle credit re­pair coun­sel­ing from, say, Keenan Glass, who runs Credit-To­day.com.

Mr. Glass said the U.S. debt is like an in­di­vid­ual mak­ing

The sit­u­a­tion is al­ready be­yond bad: If Amer­ica walked into a Hyundai deal­er­ship in­tent on buy­ing a 2011 Elantra, the sales­man would pull her credit scores and laugh her out of the show­room. And that’s just what Stan­dard & Poor’s, one of three main agen­cies that rate the abil­ity of sov­er­eign na­tions to re­pay their debts, did two weeks ago. The agency low­ered its out­look for Amer­ica’s long-term AAA credit rat­ing from “sta­ble” to “neg­a­tive.”

$100,000 a year but with $300,000 in debt. “We’re to the point where even just cut­ting spend­ing isn’t go­ing to help; you’re never go­ing to get out of debt, ev­ery­thing’s just go­ing to keep get­ting worse,” he said.

“The next op­tion is: You could file for bank­ruptcy. [. . . ] But that’s not re­ally re­al­is­tic,” Mr. Glass said with a laugh.

So Amer­ica’s got two choices: Pay off the debt, some­how, over years and years, or in­crease its credit limit and just keep jug­gling debt.

And that lat­ter course is, of course, the eas­i­est and least painful op­tion. Rather than sim­ply cut­ting spend­ing by 20 per­cent across the board, which is what any nor­mal Amer­i­can fam­ily would do, lawmakers will in­stead just raise the credit limit, even as they put the nation an av­er­age of $5 bil­lion more into debt ev­ery day.

“Ei­ther way, the U.S. has got to hire a pro­fes­sional to help it man­age its debt,” he said.

Left un­ex­am­ined is just how the world’s rich­est coun­try came to be $14 tril­lion in debt. Mil­lion­aires and bil­lion­aires (de­spised by Mr. Obama) man­age their money so that they never have to work again, in­stead in­vest­ing their cap­i­tal to make their money earn even more money. Just why does the United States owe China and Ja­pan tril­lions of dol­lars, when they should owe us tril­lions?

Of all the pos­si­ble so­lu­tions to the prob­lem, even “rad­i­cal” ones, it’s clear that the very worst is to bor­row more. Which is why Congress will do ex­actly that.

Joseph Curl cov­ered the White House and pol­i­tics for a decade for The Wash­ing­ton Times. He can be reached at jcurl@wash­ing­ton­times.com.

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