Don't Raise the Debt Ceiling!

http://paul.house.gov/index.php?option=com_content&task=view&id=1799&Itemid=69

Don't Raise the Debt Ceiling!        

As of November 7th, the total U.S. public debt outstanding reached an 
astonishing $13.7 trillion. This means that although Congress just raised the 
debt ceiling to $14.3 trillion back in February, the new Congress will face 
another debt ceiling vote almost immediately next year.  Otherwise, the 
Treasury will not be able to continue issuing debt to fund government 
operations.

The upcoming vote will provide an interesting litmus test for the new 
Republican congressional majority, especially those new members closely 
identified with Tea Party voters.  The debt ceiling law, passed in 1917, 
enables Congress to place a statutory cap on the total amount of government 
debt rather than having to approve each individual Treasury bond offering.  
It also, however, forces Congress into an open and presumably somewhat 
shameful vote to approve more borrowing.  

If the new Congress gives in to establishment pressure and media alarmism 
about “shutting down the government” by voting to increase the debt ceiling 
once again, you will know that the status quo has prevailed.  You will know 
that Congress, despite the rhetoric of the midterm elections, is doing 
business as usual.  You will know that the simple notion of balancing the 
budget, by limiting federal spending to federal revenue, remains a shallow 
and laughable campaign platitude.

Of course congressional leaders-- now Republicans-- will tell America that 
they plan on balancing the budget soon, but they just need some time.  After 
all, we have to keep the government open, right?  We can’t have 
an “emergency” shutdown of vital government services.  But somehow Congress 
always finds money for emergency spending, in the form of supplemental 
appropriations bills for TARP bailouts, troop surges, and the like.  Why is 
there never an emergency that justifies less spending???

Surely we are facing an emergency debt spiral, as evidenced by the Federal 
Reserve’s recent commitment to buy another round of Treasury debt.  It’s now 
quite obvious that the U.S. government plans to inflate its way out of debt, 
and the world is fleeing our dollar in response.  Just 7 years ago Congress 
raised the debt ceiling to $6.4 trillion, which means the federal government 
had doubled its indebtedness in less than a decade.  Annual deficits for 2011 
and beyond are projected to be at least $1 trillion.  By contrast, the entire 
federal debt amassed from the founding of our nation until President Reagan 
took office in 1981-- a period of roughly 200 years-- was $1 trillion.  So 
it’s no exaggeration to state that federal debt is growing exponentially.  

I have two simple proposals when the new Congress convenes in January.  
First, refuse to raise the debt ceiling.  Find a way, month by month, for 
Congress to spend only what the Treasury raises in revenue.  Second, start 
over from scratch with the 13 appropriations bills that fund the federal 
government.  Reject any talk of baseline budgets or discretionary spending.  
It is all discretionary, and members of both parties should vote against any 
2012 appropriation bill that is not at least 10% smaller-- in nominal dollars-
- than its 2011 counterpart.

A motivated Congress could begin to slow the tide of debt by taking the 
simple step of cutting federal spending by 10% across the board for the next 
few years.  Let’s hope it does not take the complete collapse of the U.S. 
dollar to provide this motivation.

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