A Stupid Exercise
Merriam-Webster defines ‘stupid’ as: having or showing a great lack of intelligence or common sense.
What I’m talking about is the US Debt Ceiling.
In 1939 Congress first established the debt limit as its practiced today.
There are a variety of things that are stupid about this law.
First off is the fact that when Congress passes legislation that involves the expenditure of tax dollars, it is an easy exercise for it to know whether the funds are available to do so. Congress either knows or can know if a specific spending bill will require the borrowing of funds to implement.
If you or I know we have to borrow the money to do or buy something, we consider whether it’s worth it. If it’s something we really want or need, we’d consider what we’re doing that is perhaps less important and we’d consider whether to eliminate it or cut it back significantly.
If the answer is it’s worth borrowing the money to do, we’d go to the lending source and request the money. But, at that point it’s still not a done deal because the lending source, the bank, would assess whether we’re worth the risk of nonpayment and/or the interest rate we’d pay on the borrowed funds. The point is simple, when we make the decision to borrow, it doesn’t mean the bank will approve at a rate acceptable to us in our circumstance.
Now comes Congress and the federal budget. It has the ability to print money it doesn’t have. It can spend money beyond the ability or wherewithal to actually pay for it. It can simply add expenses over income to our debt. And that’s exactly what’s happened since the early 2000’s. Congress has run up debt that exceeds the country’s GDP. At the end of 2022, the national debt was close to 130% of GDP. In layman’s terms it means that if the government took all of everyone’s income for a year, it would still be 30% short of paying it off.
But we hear no one in Congress fighting and screaming about the latest expenditure bill putting us farther into debt.
Instead, it goes through ‘a stupid exercise’ of raising the debt ceiling – giving approval to spending what it has already approved. STUPID!
Oh, add to the exercise the prospect of ‘shutting down’ the government. Who’s kidding who? We all know from experience that a government shutdown does not save a penny. A shutdown simply means all federal employees will get a leave with pay. Nice work if you can get it.
Second, Congress has its budget separated into two parts which they call mandatory and discretionary. Mandatory expenses are things like Social Security and Medicare, and all welfare expenses dependent on the people who qualify.
Mandatory spending now involves over 60% of the federal budget. That means the Congressional budget process involves only about 40% of the actual budget.
Again, who’s kidding who? Mandatory spending is a way Congress can just throw up its hands and say we didn’t do this, we’re not responsible for that classified as mandatory. Fact is, we know every dime of federal government expense is under the control of Congress. Last year’s fiscal budget listed $5.2T as falling under the mandatory category.
Oh, and while the borrowing of money is discretionary, the interest expense on the debt is considered mandatory. Because servicing the debt is mandatory, Congress can pretend to avoid having to think about the increasing interest the government must pay to people/countries that buy the riskier and riskier payment of the debt. At the rate the debt is increasing, mandatory expenses will soon reach a point where it will consume all the government’s revenue. The U.S. government spent a record $213 billion on interest payments on its debt in the fourth quarter of 2022, up $63 billion from a year earlier. I might add here that the government loves inflation because it lowers the value of the dollar and therefore the value of the national debt.
Have we had enough yet? Do we get our jollies every few months watching Congress go through the stupid, time-wasting exercise of raising the debt ceiling? Is the hoped-for shift from overspending to our gratitude that Congress avoided another government ‘shutdown’ make us as stupid as they think we are?
Is anyone besides me interested in electing fiscally responsible Representatives, Senators and President? Perhaps you’d like to give these people a raise.
It’s past time we elect people who can add and subtract – and who will take responsibility for what and for whom expenditures are approved.
We have another chance to do so this year.
Let’s not waste our votes.
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Have a great and prosperous week.
Hug somebody.
Refereces:
https://finance.yahoo.com/news/americas-dumbest-law-195145183.html
https://news.yahoo.com/us-spending-record-amounts-servicing-165954263.html
SPIDER Bites
This week’s trivia question is: What is the oldest European-founded city in the United States? The answer to last week’s question re: the soft drink that once contained cocaine as one of its original ingredients: Coca Cola. The soft drink did once contain cocaine, according to the National Institute on Drug Abuse. When the popular drink was invented 1886, it was first marketed as a “patent medicine”; cocaine was legal at the time and was a common ingredient in medicines, according to the institute. Cocaine was removed around the turn of the century. Too bad, huh?
The college basketball coach with the most wins is Mike Krzyzewski of Army, then Duke fame, right? No, it’s Tara VanDerveer of Stanford. Her women’s team racked up win its 1,203rd win last week – and she’s still the coach at age 70. Wow!
SCOTUS ruled last week the feds could cut and remove razor wire placed by Texas on a section of its border with Mexico. Meanwhile President Biden acknowledged the southern border was not secure. But it’s the Republicans fault.
It’ll be pivotal as to what the Biden administration does after Texas ignored a Friday deadline to allow the feds to remove razor wire protecting the small town of Eagle Pass. What’s next, civil war?
Meanwhile, the 2023 number of encountered illegal immigrants coming across the border spiked to 2.4M in 2023, up from 1.7M in 2022 and 740,000 in 2021. Sanctuary cities are being inundated with these illegals, using extensive local monies to house, clothe and feed them. They are also flooding our ERs where the law requires they be served. Again, it falls to the hospitals to absorb the expensive demand for immigrant health care. President Biden wants more money for the border to apparently process more of them more quickly. At the same time VP Harris is calling for a quicker path to citizenship for illegals. Is it any wonder why the polls show Americans have had enough? It’s not a partisan issue.
Get ready for CosMc’s, the drive-thru-only spinoff of McDonald’s restaurants. The company opened a pilot store in December in Bolingbrook, IL. with great success.
Green Energy Czar John Kerry called consumer resistance to EVs the result of “misinformation.” Meanwhile the Biden administration continues spending billions on incentives and subsidies for EVs at a time when consumers don’t want them. You may recall last year the EPA issued new MPG requirements for cars and light trucks aimed at eliminating all emissions in those vehicles by 2032 – ergo, replacing them. What happened to a free, consumer-driven market? Remember that economically successful concept? We look more and more like Venezuela every day.
Its interesting to note here that the Caterpillar 994A earthmover consumes 264 gallons of diesel in 12 hours. It’s needed to move the average 250 tons of soil to obtain the needed metals (lithium, nickel, manganese, and cobalt) for a single Tesla battery. In addition, hundreds more pounds of aluminum, steel, graphite, and plastic are required for one battery. Doesn’t sound like the world is being saved does it, when EV owners can’t charge their batteries when it’s too cold and when they rely on fossil fuel generated electricity to recharge?
As a write-in candidate, Joe Biden won the New Hampshire Democratic primary vote with 24% of the votes – a total of 21,417 votes. Oh, Donald Trump won the Republican primary with 54.5% and a total of 163,700 votes. Since 42% of voters there are independents, who could vote in either Party’s primary, its obvious most of them voted on the Republican side.
