Tuesday, October 20, 2015

The Debt Ceiling Debate (How About Cutting Up the Credit Card!)

By Ron Paul

The US Treasury’s recent announcement that the government will reach the debt ceiling on November 3 means Congress will soon be debating raising the government’s borrowing limit again. Any delay in, or opposition to, raising the debt ceiling will inevitably be met with hand-wringing over Congress’ alleged irresponsibility. But the real irresponsible act would be for Congress to raise the debt ceiling.

Cutting up its credit card is the only way to make Congress reduce spending. Anyone who doubts this should listen to the bipartisan whining over how sequestration has so drastically reduced spending that there is literally nothing left to cut. But, according to the Heritage Foundation, sequestration has only reduced spending from $3.6 trillion to $3.5 trillion. Only in DC would a less than one percent spending reduction be considered a draconian cut.

Defense hawks have found a way around sequestration by shoving billions of dollars into the Overseas Contingency Operations (OCO) account. OCO spending is classified as “emergency” spending so it does not count against the spending limits, even when OCO is used for items that do not fit any reasonable definition of emergency.

Yet, even using OCO to boost military spending by as much as $80 billion does not satisfy the military-industrial complex’s ravenous appetite for taxpayer dollars.

During the majority of my time in Congress, debt ceiling increases were routinely approved. In fact, congressional rules once allowed the House of Representatives to increase the debt ceiling without a vote or even a debate! Congress’ need to appear to respond to growing concerns over federal spending has forced it to end the practice of rubber-stamping debt ceiling increases.

Continuously increasing spending will lead to rising inflation as the Federal Reserve tries to monetize the ever-increasing debt. This will eventually lead to a serious economic crisis. When the crisis occurs, Congress will have no choice but to cut spending. The question is not if, but when and under what circumstances, spending will be cut.

The only alternative for cutting spending in response to economic crisis involves Congress gradually unwinding the welfare state in a manner that does not harm those dependent on federal programs. Congress will not even consider doing this until enough people have embraced the ideas of liberty to force the politicians to reconsider the proper role of government.

Those who accept the premises of the welfare statists are incapable of making principled arguments against welfare and entitlement programs. Thus, they can only quibble over spending levels or how to more efficiently manage the federal bureaucracy. While fiscal conservatives may gain some minor victories with this approach, their failure to challenge the welfare state’s morality or effectiveness dooms any effort to seriously curtail welfare state spending.

Similarly, one cannot favor both serious reductions in the military budget and an aggressive foreign policy. So-called cheap hawks may achieve some reforms in the Pentagon’s budget. They many even succeed in killing a few wasteful weapons projects. However, their unwillingness to oppose a foreign policy of perpetual war means they will always cave in to the war hawks’ demands for ever-higher military budgets.

Those who understand the dangers from continuing on our current path should support efforts to stop Congress from raising the debt ceiling. However, supporters of liberty will not win the political battle over government spending on welfare and warfare until we win the intellectual battle over the role of government. Those of us who know the truth must do all we can to spread the ideas of liberty.

The above originally appeared at the Ron Paul Institute for Peace and Prosperity.


  1. Throw in the towel guys. It's too late to turn back. Let them blow it up.

  2. "Cutting up its credit card is the only way to make Congress reduce spending..."

    Love ya' Ron. Love ya' RW, but you're both out of touch. The words of the Constitution mean nothing anymore. The words mean whatever anyone wants them to mean.

    1. We've had Tax Cuts for decades now - Late Payment or Non-Payment for services rendered and nothing has slowed. That part of Supply Side Theory: Refuted.

    2. Monetarism never had a chance. Monopoly control over the M$ never would allow a 1 - 2 % growth at a constant rate, not when thar's a war goin' on...or somthin'. Monetarism: Refuted.

    3. Bring all of your collected readings of Mises to the bar where the Triple-E rated bartender was serving drinks to you the other night and she will listen to every word you state, agree to every one of them and go home that night to her new puppy and wonder why this old guy wouldn't just drink his whiskey sour and and leave her alone after leaving a large tip. *Oh...wait a minute*... I got the bar and Congress mixed up. ABCT: Refuted.

    Notice I haven't stated that these Bodies of Knowledge have been falsified. They have not. The Truths on these positions will be proven (again) soon enough. The proof of this is to be found in the penalty given in the Constitution for reducing the amount of precious metals in the coinage made. Bernanke is still a'swingin' but ain't from the nearest tree. QED.

    Tear up the credit card given to congress? Sure. Term Limits? Yeah, absolutely. Limit the Federal Government to the jobs Constitutionally and explicitly given to the Central State Apparatus and those jobs only?

    Not a chance.

    'Preciate the good words, Ron. You to, RW. Sorry to say, as my own just completed words are typed, it all means nothing. There appears nothing at all that will stop the coming Moloch Leviathan.

    "Arbeit Macht Frei": Refuted. Death Camps not needed. The people will kill themselves


  3. Ron Paul has repeatedly said the constitution has failed.
    Obviously so.
    And he has stated more than once the US State won't be stopped until the dollar collapses.
    What he and RW are doing is to try and get as many people as possible to hear the message of Liberty before the collapse.
    Not only is there nothing wrong with this, it may be, and probably is, our best hope for the future.
    At least for posterity.