The Free Press, Mankato, MN

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January 19, 2013

My View: Debt ceiling should come with spending cuts

— It seems we can’t tune in radio, TV, or read news without being exposed to the word “balance.” After reading The Free Press Jan. 16 editorial — “Don’t Risk Hitting Debt Ceiling” — I thought about writing something that might offer a little balance.

When considering what to do about the federal debt ceiling it’s best we think with our brains not our hearts, beware of emotional scare tactics, set public opinion aside, and disregard rhetorical thuggery by politicians.  

Over the past 50 years the average ratio of government spending to Gross Domestic Product has been about 20 percent. Currently the federal government spends close to 25 percent of GDP. About 40 percent of that spending is borrowed money. If the federal debt ceiling is not increased the government cannot borrow more money, but would not need to default provided it continued to pay the interest on the present debt. 

Interest on the debt is far less than the approximate 15 percent of GDP the government will collect from income taxes (fiscal cliff agreement) and other revenue. After paying the interest the government could set priorities on what other payments to make during the temporary cash flow crunch, until a debt ceiling agreement could be reached.

In his Jan. 14 press conference the president suggested that if the debt ceiling is not increased Social Security and veterans benefit payments will be “late.” It is incomprehensible to think payments to the elderly, retired, disabled, etc., would not be a high priority item. It is even more incomprehensible to think the Commander in Chief would not place a high priority on veterans benefits. 

Failure to increase the debt ceiling would not be a good thing, but the way I see it not as bad as no meaningful action to reduce debt through real spending cuts — now, not a promise to address them later. In my opinion the country has no right to contract for debt for periods longer than the majority contracting it can expect to live. With the debt at about $16.5 trillion we have already crossed that line — our children are not being born free.

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