Dealing with Our Debt

 Dealing with Our Debt

                    Robert A. Levine  May 23, 2023

America’s entire debt situation is insane. First of all, there should be no debt ceiling. When Congress appropriates money for any government acquisition or activity, that should be deemed as obligating the government to spend the money to pay the bill. There is no reason to have a separate vote to allocate money to pay off debt that Congress already agreed was necessary. This vote to raise the debt ceiling to pay bills that Congress has already authorized allows a minority party to hold the nation hostage. And extremists on both the right and left are only too willing to raise questions and gain publicity by opposing or delaying the increase in the debt ceiling for money that Congress has already spent.

It is time for a separate vote on the debt ceiling to be eliminated. When Congress passes a bill that entails government spending, that bill should ensure that government funds will be used to pay that debt. Almost no other nation in the world has separate votes on spending bills and raising the debt ceiling to pay these bills. The uncertainty associated with approving the debt ceiling roils all the financial markets, damages the sanctity of the dollar and hurts the American economy, even if raising the debt ceiling is passed. Thus far, the United States has never defaulted on its debts and it is hoped that this will never happen.

Having the dollar as the currency used in international trade is beneficial for the United States. There are currencies waiting in the wings, like the Chinese yuan or the European euro that would be glad to take the place of the dollar in international trade.  This is much more likely to happen if the U.S. defaults on its debt. Dollar denominated debt is also considered as a safe haven for the rest of the world. When there is an economic crisis anywhere, people all over the world want to park their money in American government obligated debt. This strengthens the dollar and also America and we should be loath to do anything that would damage the standing of the dollar.

That is why it is crazy for the Republicans in Congress to make demands regarding future spending when the debt ceiling is for money that had been already spent. There should be no question about

payment of this debt and no question about raising the debt ceiling when the payment comes due. As I said, the proper way to handle this is to get rid of the debt ceiling completely, allocating funding whenever Congress and the president pass a bill. No more games involving the dollar and America’s debt.

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Resumed Do-Nothing Congress

Presumed Do-Nothing Congress

                Robert A. Levine  1-10-23

The control of the House of Representatives into Republican hands and the chaotic and traumatic election of Kevin McCarthy as Speaker of the House is predictive of government gridlock and dysfunction. McCarthy squandered much of the power of the Speaker’s position in order to get elected and it is hard to imagine how he will be able to govern with any degree of efficiency. The Republican House candidates ran for office without a definitive platform, except to investigate Democratic officials and the programs that Democrats have initiated. Also a desire to cut government spending, even if it affects social programs like Medicare and Social Security.

McCarthy has allotted chairmanships of important committees to MAGA Congressmen like Jim Jordan, who have already indicated that their man objective is going to be to investigate Democrats. A number of elected Republicans continue to be election deniers and want to re-litigate the 2020 election which they claim that Trump actually won. This is a formula for a government that is non-functional and will not be able to accomplish anything positive for the American public.

The major problem is that McCarthy does not have a working majority in the House to get things done. At least twenty of the GOP members of the House who ultimately voted for him as Speaker demanded and received special concessions and will be able to block any bipartisan legislation or spending bills. A single Congress person can also call for a vote of confidence at any time for the Speaker’s position, diluting much of McCarthy’s power. To keep these votes of confidence at a minimum, he may have to negotiate frequently with individual Congress persons, forcing him to make further concessions.

In order to govern effectively, McCarthy and House GOP members have to come up with specific programs that they wish to pass to move America forward. Changing House rules and investigating government activities is insufficient to positively impact the nation. Unfortunately, many of those recalcitrant Republicans come from deep red districts whose voters don’t care how their representatives conduct themselves in Washington. Some constituents just demand loyalty to Donald Trump or opposition to anything the Democrats propose.

Important spending bills and extension of the nation’s debt limit come up for votes this year. If Republicans block these bills or demand extensive changes, they may damage the world and America’s economy and the nation’s standing in the world. These Republicans are not a good advertisement for a democratic style of government and play into the hands of our autocratic opponents. Unfortunately, some of these House Republicans covertly or overtly support Putin and the Russian government and would be only too happy to see an autocratic government in place in America. The idea of compromise is anathema to many of these politicians who insist that it is ‘my way or the highway’ in governing America.

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