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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.
Ron Paul
www.house.gov/paul
Visit Congressman Ron Paul's Web Site
Congressman Ron Paul of Texas enjoys a national
reputation as the premier advocate for liberty in politics today. Dr. Paul is
the leading spokesman in Washington for limited constitutional government,
low taxes, free markets, and a return to sound monetary policies based on
commodity-backed currency. For more information click on the Project Freedom website.
Published with the authorization of Dr. Paul.
Copyright Dr. Ron Paul
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