Against a Clean Debt Ceiling Increase
Our debt is 125% higher than our gross domestic product. That is not sustainable. What is not feasible or practical is trying to reduce the debt through tax increases, which would slow the economy and cause the debt to be an even higher percentage above GDP.
What is possible is freezing the debt.
It is possible for Congress to embrace a pay-go system, much like we had in the first Bush Administration that carried through the Clinton Administration. Freeze spending and require either tax increases or spending cuts thereafter. Couple that with deregulation and other incentives to spur economic growth and the debt becomes a lower and lower percentage of an ever-expanding GDP.
Growing our way out of the problem is a far better solution than taxing our way out of a problem with no propensity to slow down spending.
45 Republicans have been very loudly insistent that Kevin McCarthy not negotiate a clean debt ceiling increase. Democrats had calculated that they might be able to bypass the House GOP leadership, collect 218 signatures, and take a clean debt ceiling increase straight to the floor of the House.
Yesterday, in the Dispatch, David Drucker reported that the moderate GOP Main Street Caucus also opposes a clean debt ceiling increase. This is good. With both the moderate and conservative Republicans all opposed, the GOP should have the leverage to extract some concessions from the President.
Our debt is a national security threat. It cripples our ability to expand our military when we need it and provides us limited flexibility to navigate the future. With interest rates increasing, debt service payments on the debt will increase, reducing what money is available for discretionary spending. Increasing the debt ceiling and, thereby, increasing the debt will increase the debt service payments.
The House GOP needs to fight for reform. We cannot keep going down this road, and when a recession hits, it has the potential to strain Washington’s budget even more unless we act now.
Thomas Sowell wisely said “It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.”
How about another way? 1) Eliminate the income tax. 2) Initiate a National Sales Tax - on everything - including homes, yachts, airplanes, etc. (This prevents the incessant nibbling at the edges for exemptions). 3) Set a guardrail that USG can only spend 90% of the prior years tax revenue. Of the remaining 10%...5% goes to savings for unplanned expenses (weather disasters) and the other 5% pays down the debt. The result? Increased tax revenue with 100% of the population paying their fair share of taxes, predictable monetary policy for planning purposes, and a renewed sense that we're all in this together. An by the way, per capita income generation will break its own record year over year. This puts the future of the economy, and the country itself, back in the hands of its citizens - which is why this is almost impossible to implement.