Wednesday, July 27, 2011

A Drop (Debt) Ceiling

  The media has had a field day with the ongoing debate over raising the US debt ceiling from its current level of 14.3 TRILLION dollars. President Obama and House Speaker Boehner had dueling speeches on TV last night outlining their positions. As is his custom, Obama wants to get a deal done even at the expense of alienating his most ardent supporters with spending cuts but is pushing for any increase in the spending limit to be large enough to keep him from having to raise taxes or cut programs while he is seeking reelection in 2012, while Boehner wants to look tough on cutting spending while keeping the Republicans from being blamed when millions of Social Security checks aren’t delivered and hundreds of thousands civilian military employees receive their pink slips.

  I don’t understand the talk about how if the debt limit isn’t raised, the government will default and won’t be able to pay its bills. Since the government will presumably still be collecting payroll and other taxes, they should be able to pay the essential bills out of that. Could it be that the government can’t even pay essential bills out of its income?

  I also don’t understand the Republican and Democrat plans to increase the debt ceiling by x TRILLION DOLLARS in return for a cut in spending of x TRILLION DOLLARS times 1.1 (give or take a few HUNDRED BILLION). IF I needed to borrow a hundred dollars, but I could reduce my spending on groceries by a hundred dollars, why would I need to borrow a hundred dollars? Only if a) I was only talking about cutting my grocery spending by a hundred dollars and had no intention of really following through, b) I was living in such a hand to mouth fashion and was so far behind in my debts that I would be bankrupt without my money fix, or c) They are going to cut a TRILLION DOLLARS in spending by cutting one dollar in spending over the next TRILLION YEARS.

  While every other time the debt ceiling needed to be raised some sort of face saving solution was found, this time I think the 2 parties have painted themselves into separate corners. The Republicans owe their current reign in the Congress to the financial and volunteer support of the Tea Party movement and their central tenet is to cut spending and not increase taxes, while the Democrats get their support from unions, government workers, and other groups who are part of the over 50% of the population that receive aid directly or indirectly who are loath to have their aid cut and would rather raise taxes on wealthy people to pay for the deficit.

  The banking crowd has weighed in with the advice that the US should remove the debt ceiling permanently in order to preserve its AAA credit rating. This sounds like a crock to me. Why would you give an entity that has been on a runaway borrowing spree for the last 40 years (except for a few years in the late 90s) an AAA credit rating anyway? The debt ceiling is a rare device that actually holds the government somewhat accountable. Removing it would just give the politicians of all parties’ carte blanche to spend and spend and spend. By the way, the same banks that want the US to be able to borrow at will without even a perfunctory nod to raising the debt ceiling were giving mortgages to anyone who had a pulse (and sometimes not even that) just a few years ago. These guys would give alcoholics credit cards that only worked in liquor stores.

  If the crises continues and the government can’t pay its bills, no one knows what will happen but I tend to think that not much will change except even more wall to wall news coverage. When the Republican Congress shut down the government in 1995, President Clinton was very inventive in finding ways to keep services going and I’m sure President Obama has that script in his desk drawer at the Oval Office.

  When I was working in a fast food restaurant as a teenager in New Jersey, a store manager named Jim Kennedy would go nuts if he saw the servers putting more than one ketchup packet in the to-go bags unless they were asked for and he would go even more nuts if even one ketchup packet was placed on a tray. I asked him why once and he said that the ketchup packet cost 3 cents (in 1978 cents) and a handful of them cost about the same as all the ketchup that was in the squeeze bottle on every table that was filled each night with industrial size cans of ketchup. I didn’t care too much for this managers’ screaming and yelling style (he was an oversized volunteer high school football coach – you know the type, I’m sure), but I had to admit that he made a lot of sense about the ketchup packets. Another one of his ‘go nuts’ triggers fired if we got our free employee sodas using the disposable wax cups that the customers got instead of the small reusable employee cups. I asked about that too and was told that the cup cost almost as much as the soda that went into it. I’m not sure I believe that, but he was a good watchman over his companies’ money (except when he would have us make up a mess of chicken and roast beef sandwiches for him to take home from work).

  If I knew where Jim Kennedy was, I might try convincing him to run for public office. But in the meantime, I’d like to offer my own version of his wisdom. Every day this week while driving to and from Des Moines, there has been road work on the road I use to get into and out of Marshalltown. Every time, I’ve had to wait at least 10 minutes for the pilot car to slowly make its 2 mile round trip and lead me to or away from the promised land. There are at least 2 and sometimes 3 people hanging around at the intersection holding a stop sign or waving their hands for the cars to stop and telling them that it would be quicker to turn around. Every car except me has waited a few minutes and then turned around or took the long way around. I’d like to advise the government that since no one is waiting for the pilot car they should just please close the road and save us the $400 a day that the sign holders, pilot car driver, and pilot car cost. Since the road work will take a week, we will have saved $2,000. Only 14,299,999,998,000 more dollars to go! While we’re at it, maybe the congressional cafeterias can make sure they aren’t dishing out ketchup packets. After all, you have to start somewhere!

Our tax dollars at work.