Here we are at the debt limit again, and the new Treasury Secretary Jack Lew is urging Congress to go ahead and approve a higher limit so that Congress can continue to borrow money whenever it wants in the name of protecting America’s and the world’s economy. In a letter to Speaker Boehner, Lew stated that the issue of raising the debt limit is “not open to debate”:
“[I]ncreasing the debt limit does not increase spending or authorize new spending; rather, it simply permits the United States to continue to honor pre-existing commitments to our citizens, businesses, and investors here and around the world. These commitments were already approved by Congress, and honoring them is not optional. The global economic leadership position enjoyed by the United States rests on the confidence of Americans and people around the world that we are a nation that keeps its promises and pays all of its bills, in full and on time. Breaching that trust would do irreparable harm to the economy and the American public… I want to reemphasize what the President has said repeatedly regarding any threats to cause default in order to extract policy concessions from the Administration: We will not negotiate over the debt limit. The creditworthiness of the United States is non-negotiable. The question of whether the country must pay obligations it has already incurred is not open to debate. Congress has no choice but to protect our creditworthiness and our economy.”
Wouldn’t it be nice to wield such power to our own credit card companies? Just call them up and tell them that you know that you’ve gone past your credit limit, but that they really have no choice but to raise it so that you can continue to borrow and spend. Tell them it’s not open to debate. Besides, you’ve promised lots of people and businesses money, and you have an obligation to make due on your debts. They wouldn’t want you to default, would they? That would be immoral of them to force you to default on your debts to others.
Oh, but we can’t make that comparison, because governments are completely different. It’s a false analogy, because the purpose of our government is to take care of people from cradle to grave, to redistribute the poverty, to police the world, and to micromanage the global economy. Since that’s the government’s proper role, it’s going to need an endless supply of cash. Since it doesn’t produce anything on its own, it’s going to have to extract it from people in the form of taxation.
But that only brings in so much money since the number of taxpayers is dwindling thanks to a centrally planned economy. The only other option is to borrow money from our own central bank or from the central banks of other countries. And Lew doesn’t want us to default on our financial obligations. It would be immoral for Congress not to approve a debt limit raise and force us not to make due on our debts. If Congress didn’t approve it, they’d be “holding America hostage” with the debt limit.
So, just like last time, I’m sure Boehner will get everybody to be a good team player and approve the debt ceiling raise without batting an eye. It’s to protect the economy, of course.