Tag: debt ceiling

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Accountability national politics & policies tax policy

Kick the Can

Rep. Matt Gaetz (R.-Fla.) , Congress, spending

At first blush, it seems like the most pointless political move ever.

When Rep. Matt Gaetz (R.-Fla.) moved to oust Rep. Kevin McCarthy (R.-Cal.) from his role as Speaker of the House, lots of eyebrows were raised, and at least one pair of lips was licked. But did it make any sense?

This has never happened before, a House Speaker ousted by his own party mid-session.

That’s not an argument against the move, though. It was Gaetz who had blocked McCarthy back in January, through more than a dozen votes, allowing the moderate Republican to serve only with explicit conditions. Gaetz now says that McCarthy has failed to meet those conditions. Arguably, that’s accountability in action. Good?

Or mere revenge? After all, McCarthy had just made a deal with a sizable number of minority Democrats to fund the government and prevent a federal shutdown — thus kicking the overspending/​insolvency can down the road again. Gaetz and his closest colleagues in the House made the same deal with the opposition party, ousting McCarthy. 

It’s a game of kick the can, however you look at it.

Gaetz argues that McCarthy did not do what was required to bring fiscal responsibility, such as un-​package spending bills. “We told you how to use the power of the purse: individual, single-​subject spending bills that would allow us to have specific review, programmatic analysis and,” explained Gaetz, “that would allow us to zero out the salaries of the bureaucrats who have broken bad, targeted President Trump or cut sweetheart deals for Hunter Biden.”

But the deed is done. McCarthy’s out. Now, who to replace him?

Funny that no one mentions the wild plan to put Trump into the job — you know, the plan first floated after Election 2020?

It was such a snickered-​at notion, just a goofy way of taking 1600 Pennsylvania Avenue from Joe Biden.

Still, it was a plan. Only in the next few days and weeks will we learn if Gaetz really has one.

This is Common Sense. I’m Paul Jacob.

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Accountability national politics & policies U.S. Constitution

Facing the Debt with Deceit

trillion dollar coin, platinum, folly

The “trillion dollar coin” solution to the federal debt reared its absurd head, again, during the recent “debt ceiling” brouhaha.

I wrote about it over ten years ago, when Big Talkin’ Republicans were challenging Big Spendin’ Democrats over raising the debt ceiling at that time. 

The idea is bold trickery, allowing the President to inflate the currency by leveraging Treasury’s Congress-​given ability to coin platinum coins at any face dollar value. 

Typically, such collector coins sport on the reverse a value far below the metal’s value.* The trillion dollar coin would invert that, fixing the face value far, far above the metal value. The freshly minted coin would be sent to the Federal Reserve, covering the books that way.

It’s inherently deceptive and obviously ridiculous.

Thus it symbolizes contemporary politics quite aptly.

After the recent budget compromise that forestalled any real work of marshaling the federal government’s scarce (if astoundingly awesome) financial resources, however, the trillion dollar coin has been shelved.

For now.

Indeed, Democrats are tiring of the debt ceiling brinksmanship game. And it is mostly posturing. “Democrats have introduced a bicameral proposal to overhaul the debt ceiling process, leaning heavily into the recent default scare to push a bill that would essentially let Treasury ignore the debt cap and continue writing cheques with no limit,” explains The Epoch Times.

Would this any be better than the fake coin?

Perhaps more honest.

But, once again, it would be Congress giving away its authority. 

And until Congress can restrain its spending habits, we, the people, will always come up tails.

This is Common Sense. I’m Paul Jacob.

* On the day I checked, the spot price for an ounce of platinum was just over $1000, and the face value on the American Platinum Eagle remained $100, the ratio being a tenth of metal value.

trillion dollar coin, debt, Congress, folly

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national politics & policies

Making the Rounds

The “trillion-​dollar” coin proposal hit big in the last few months, even garnering a smile, a wink, and a nod from Paul Krugman. The idea was for the government to mint a high face-​value platinum hunk of token money and sell it to the Federal Reserve — to weasel around congressional approval for raising the debt limit.

Something very much like it was floated by Populist and inflationist Bo Gritz back in the early ’90s, when he was running for the presidency.

Though the current president has dismissed the notion, people like it so much — perhaps because of its “just so goofy it might work” aspect — that the whole meme is still making the rounds.

As a technical matter, a one trillion dollar coin would probably be too unwieldy. If actually given the go-​ahead, the Treasury and the U.S. Mint would likely opt for smaller amounts, cranking out a batch of them — a big batch, to cover the federal government’s rising debt.

My modest proposal? Mint coins at the legal tender amount of $666 million each.

The effigy of Liberty could sport a 666 tattoo on her forehead, and a neat UPC symbol on her wrist, which she could hold up instead of a torch.

That would indicate, by commonly understood symbology, just how dangerous America’s debt really is, and how anti-​American the whole idea of the high face-​value coinage debt ceiling workaround would be.

Another way to go would be to carve each coin out of coprolite. Another fitting symbol for the last days of our fiat currency.

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies political challengers too much government

Fiscal Brinksmanship

“America,” President Obama insists, “is not a deadbeat nation.” Mounting evidence to the contrary.

He chastises Republicans for even contemplating a default on the debt. At a news conference this week, he called any attempt to use the debt limit authorization issue to negotiate federal spending down “absurd,” and akin to a hostage situation. Refusing to raise the ceiling, you see, would “crash the economy”:

He demanded that Republicans in charge of the House of Representatives approve a rise in the federal government’s authority to borrow money to pay existing obligations — without seeking policy concessions in return.

The BBC goes on to quote the president, who clarifies his stance. “While I’m willing to compromise and find common ground over how to reduce our deficits,” said the president, he insists that he will definitely not “have that negotiation with a gun at the head of the American people.”

It’s an interesting approach: accuse Republicans of dangerous brinksmanship, while continuing to overspend and increase debt to the very brink of insolvency.

What Obama won’t recognize is that fiscal conservatives, today, play the same role as a parents cutting up their college kid’s credit cards after the young spendthrift had racked up an extraordinary debt. Obama plays the role of the kid saying: I’ve already budgeted spending, you can’t cut up the credit card — that’d be irresponsible!

It was different in 2006, when Senator Obama opposed raising the debt ceiling and called the increasing debt levels a sign of “a failure of leadership.”

Now that he — and not a despicable Republican — has the leadership role, he’s changed his tune. He says his former cry of “irresponsibility!” was itself irresponsible.

The very best thing we can say about this? The president has been captured completely by the forces he once opposed.

This is Common Sense. I’m Paul Jacob.

P.S.Soon after the last period of the above squib was struck, I turned on Fox. And there was Sean Hannity, leading his nightly political opinion show with the president’s remonstrance of Republicans for daring to fix tight the debt ceiling. Hannity noticed what I noticed — indeed, what it turns out a lot of people noticed: Obama’s repudiation of a practice that he himself had engaged in in 2006.

But notice what Hannity is trying to prove: “how reckless, irresponsible and fundamentally dishonest a man [Obama] is.” Hannity sees Obama’s press conference performance as indicative of the president’s hypocrisy, demagoguery, and slipperiness-with-facts.

The case can be made, and Hannity has made it. The trouble is, the way Hannity makes it, to his audience, just skips over precisely this kind of behavior from Republicans. For, remember, Republicans repeatedly voted to increase the debt limit while their guy, Bush, was in charge. Another person to notice the differences between Junior Senator Obama and Second-​Term President Obama, young Ms. Julie Borowski (“Token Libertarian Girl”), showed more savvy on Facebook than Hannity does on his primetime program:

Most Republicans are against raising the debt ceiling under Obama. But most were all for it during the George W. Bush administration.

Most Democrats are for raising the debt ceiling under Obama. But most were all against it during the George W. Bush administration.

Pssh, here’s a better idea. Dramatically cut spending. Stop manufacturing fake crises and raising the debt ceiling almost every year to finance drunken spending sprees. And why they are at it, members of Congress should pass a budget for the first time in over three years. It’s no wonder that a recent Public Policy Polling survey finds that cockroaches are more popular than Congress.

No doubt, since insecticide is cheaper and more effective than politics.

Categories
national politics & policies too much government

Brew Stronger Tea

The Tea Party’s House Republicans have begun work, outlining a “plan to attack the federal deficit. The result: A proposal to cut $100 billion,” which amounts, in the words of Tom Mullen, on LewRockwell​.com, to a mere “[s]even percent of the deficit.”

Disappointing. But wait, Mullen goes on, “if history has taught us anything, it is that this isn’t ‘just the beginning,’ with more substantial cuts to follow. This will be the high water mark as far as reduction in government spending is concerned.”

Mullen then offers an alternative venue: The states should unite in defiance of Washington, authorizing and defending citizens who withhold income tax payments until Congress balances the budget. He calls this “interposition.”

Radical, yes. But it will prove even less effective than our first House’s first foray.

Why? Many of the states are in just as bad a financial shape — or worse — than the federal union, and are presumably right now primping for federal bailouts.

What to do?

Brew stronger tea.

And throw it at Congress.

No state bailouts. The only thing the House can do, alone, is prevent more debt. Don’t raise the debt ceiling, and force President Obama and Democrats in the Senate to take budget cuts seriously — big budget cuts — now.

As I wrote a few days ago, let’s put the federal government onto a cash, pay-​as-​you go finance plan immediately. This would require, certainly, no small amount of courage from House Republicans.

Brew stronger tea.

This is Common Sense. I’m Paul Jacob.