U.S. debt has increased more rapidly than national income for more than half a century, creating what is often termed “debt fatigue.” The Congressional Budget Office reports that federal debt held by the public as a share of GDP increased to 98 percent in 2022 and is projected to increase to 185 percent by 2052, implying that Americans’ debt fatigue will only worsen. The fiscal rules enacted by Congress to constrain debt have clearly failed, and the federal government has virtually abandoned any semblance of a rules-based fiscal policy. Indeed, the debt ceiling has been routinely lifted or suspended, and the spending caps imposed by the 2011 Budget Control Act have been largely flaunted and were allowed to expire in 2022.
Steve H. Hanke, Barry W. Poulson
January 9, 2023
It’s Time to Put a Brake on the Debt-Ceiling Charade
[Most sources put the ratio about 120% or higher,
The debt “ceiling” is a total joke.
Prepare appropriately.—Joe]
On a side note, I recently purchased some Silver Peace Dollars, the bulk of them were dated 1923. Of course, then when it was a real currency, its value was $1.00. today it’s worth $30.00, not as much from a numismatic standpoint but the 90% silver it was made with.
Nobody in power will police themselves when it is not in their interest to do so.
I had an idea for imposing some financial restraint on various legislatures, but it’d require a Constitutional amendment. It’d go something like this:
“If any legislative body appropriates more public funds, as of the last day of its session, than was actually collected in the previous session of that body, no person that held an elected position in that body shall be eligible to hold any elected or appointed office, nor position of public trust or authority, nor to be employed at public expense, nor in any way receive any benefit at public expense, for a period equal to the full term of their office.
“Any laws that require public funding to be enacted, if they are not funded on the last day of the session of the enacting legislative body, or are insufficiently funded to achieve the stated public purpose within Constitutional norms, are repealed.”
Don’t this mean Congress or other legislative bodies can’t allocate more than they bring in in revenue? No. It just means that everyone in that legislative body is going to have to pay a personal price for the decision to do so.
Not bad.
I would also like to have something that says there can be no such thing as programs that are required to be funded continuously once established, e.g. nondiscretionary, or entitlement, programs such as welfare, social security, medicare/medicaid, and so forth.
If they’re a good idea, and not causing problems, fine, the annual debate should be short. If not, then there’s an opportunity to just let it die every year.
Sorry, the time to put on the brake was a 120 years ago. This is the debt trap that every dying empire goes thru. No way out.
One real disconnect we humans do mentally is when we forget that money is never lost. It just gets transferred.
Sam Bank-fried didn’t lose any money. It just went to someone else’s pocket. Like J.P.Morgan-Chase, Blackrock, And a host of other assholes that were being allowed to create the illusion of prosperity.
By printing money congress and friends can buy your goods and services (the sweat of your brow), at yesterday’s price.
Like the cartoon of Brenny Madoff under the FBI interrogation lights being ask where he got the idea for the ponze scheme. He answers sheepishly. The social security system.
With Saudi Arabia willing to trade oil in other currencies now. All that debt is coming home with the cows. No matter how much they print it will always buy less.
As you say Joe, it’s a total joke. The real question is when are we going to get tired of it being on us?
Like the old Russian said; We knew they were lying to us about communism. What we didn’t understand is that they were telling us the truth about capitalism.
Sharks got to swim, and slavers going to slave people. No matter what system they call it.