{"id":19335,"date":"2017-09-11T23:09:58","date_gmt":"2017-09-12T05:09:58","guid":{"rendered":"http:\/\/lastbestnews.com\/site\/?p=19335"},"modified":"2017-09-11T23:09:58","modified_gmt":"2017-09-12T05:09:58","slug":"opinion-the-national-debt-ceiling-crisis-again","status":"publish","type":"post","link":"https:\/\/montana-mint.com\/lastbestnews\/2017\/09\/opinion-the-national-debt-ceiling-crisis-again\/","title":{"rendered":"Opinion: The national debt ceiling crisis, again"},"content":{"rendered":"
\"Bruce<\/a>

Bruce Lohof<\/p><\/div>\n

I wonder if Montana\u2019s congressional delegation knows the difference between spending money and paying bills.<\/p>\n

Once again \u2013 for the second time in a decade \u2013 Congress flirts with defaulting on the nation\u2019s debt by failing to raise the federal debt ceiling. Granted, the can was kicked three months down the road when, last week, it was attached to the Harvey hurricane relief package. Don\u2019t rest easy, though; some legislators still want you to believe that defaulting on the debt will reduce government spending.<\/p>\n

Think of it like this.<\/p>\n

You use your VISA card to buy a candle-lit anniversary dinner or get new shoes for the kids or fill up the jalopy\u2019s gas tank. That is spending money. At month\u2019s end you receive a statement from the folks at VISA and you send them a check. That is paying the bill.<\/p>\n

Pivot from your pocketbook to Washington\u2019s.<\/p>\n

The U.S. Navy requisitions a new ship or the U.S. Forest Service fights another forest fire or a U.S. senator procures a new computer. That is spending money. The U.S. Treasury defrays those expenditures. That is paying the bill.<\/p>\n

The problem, of course, is that Washington\u2019s expenses exceed its revenues. (You may be personally familiar with this phenomenon: in my home it\u2019s called the too-much-month-at-the-end-of-the-money syndrome.) Hence the national debt. Let me quote Edward Kleinbard, former chief of staff of the Congressional Joint Committee on Taxation: \u201cThe money coming in is systematically less than the money being disbursed \u2026 and Treasury makes up the difference by borrowing in the capital markets.\u201d<\/p>\n

Personally, you know that you have only two options. One, reduce expenses, e.g., fewer candlelit dinners, fewer shoes for the kids, or less gas for the jalopy. Or two, enhance revenue, e.g., a bigger paycheck or an inheritance from a maiden aunt. In any case your solution ISN\u2019T stiffing the folks at VISA. That makes you smarter than some members of Congress, for whom defaulting on the nation\u2019s debt is the way to go.<\/p>\n

\"CapreAir_Variable\"<\/a><\/div><\/div>Does the Harvey relief package vote tell us where Montana\u2019s congressional delegation stands on the debt ceiling? Hmm.<\/p>\n

U.S. Sen. Steve Daines voted nay. Or, more precisely, he voted against hurricane relief because a vote for relief was a vote for a higher debt ceiling.<\/p>\n

\u201cIf there\u2019s ever a good example of kicking the can down the road, it is continually raising the debt ceiling and not dealing with the cause of the debt,\u201d he has said. For Daines, the Harvey package was probably \u201cjust \u2026 another punt.\u201d<\/p>\n

U.S. Rep. Greg Gianforte voted yea, but his official website made it clear that disaster relief \u2013 in Texas but rather more so in Montana \u2013 was on his mind. Texas: \u201cOur hearts go out to \u2026 all affected by Hurricane Harvey\u201d and \u201cthis funding represents an important first step to help.\u201d Montana: \u201cThe people of Montana also face a massive disaster\u201d and \u201cI will continue being a strong voice for Montana, ensuring that folks in Washington understand the devastation on the ground in our state.\u201d The debt ceiling: not a word.<\/p>\n

U.S. Sen. Jon Tester voted yea, debt-ceiling increase and all. The vote was consistent with his position during the 2011 debt-ceiling crisis when he called on Congress “to prevent an economic meltdown, raise the debt ceiling and work together, in a bipartisan manner, to reduce our debt and deficit over the long term.\u201d<\/p>\n

We\u2019re left hoping that, three months down the road, politicians will understand: stiffing the folks at VISA won\u2019t reduce your personal debt and defaulting on the national debt won\u2019t reduce Washington\u2019s. It will have consequences, though. Namely:<\/p>\n

One, the rate of interest at which Washington borrows money will increase. Following the 2011 flirtation, Standard & Poors downgraded the credit rating of the United States. Another downgrade would follow default as night follows day, and experts suspect that an increase of no more than 0.2 percent a year would cost Washington about $400 billion over the next 10 years.<\/p>\n

Two, the rate at which American businesses and families borrow money would increase because bank rates are determined by Treasury rates.<\/p>\n

Three, each month tens of billions of dollars in valid claims against Washington would go unpaid, triggering a major recession.<\/p>\n

Meanwhile, of course, the national debt would stand \u2013 or, rather, increase \u2013 because, as you know, stiffing VISA doesn\u2019t pay down the debt.<\/p>\n

As Kleinbard explains it, \u201cNone of this is particularly speculative; almost all economists and policy makers agree on the enormous fiscal, economic and reputational costs of default.\u201d What, then, are we to make of it? Perhaps Congress really doesn\u2019t know the difference between spending money and paying bills.<\/p>\n

Bruce A. Lohof is a native of Montana. A former professor and a retired diplomat, he lives in Vienna and in Red Lodge.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

I wonder if Montana\u2019s congressional delegation knows the difference between spending money and paying bills. Once again \u2013 for the second time in a decade \u2013 Congress flirts with defaulting on the nation\u2019s debt by failing to raise the federal debt ceiling. Granted, the can was kicked three months down the road when, last week, […]<\/p>\n","protected":false},"author":76,"featured_media":19336,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3864],"tags":[6247,335,528,6248],"class_list":["post-19335","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinion","tag-debt-ceiling","tag-greg-gianforte","tag-steve-daines","tag-u-s-congress-jon-tester","prominence-category-featured"],"_links":{"self":[{"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/posts\/19335","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/users\/76"}],"replies":[{"embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/comments?post=19335"}],"version-history":[{"count":2,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/posts\/19335\/revisions"}],"predecessor-version":[{"id":19338,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/posts\/19335\/revisions\/19338"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/media\/19336"}],"wp:attachment":[{"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/media?parent=19335"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/categories?post=19335"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/tags?post=19335"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}