The Debt Ceiling Issue Illuminates A Deeper Core Problem

May 26, 2023

Every time it comes down to the false choice of raising the debt ceiling or defaulting on our treasury debt payments we should be sober enough to realize the issue represents a much deeper problem and one that exists at a base level when it comes to government finances.

And as we suffer the verbal vomit from both sides of the aisle when it comes to who is to blame and “sky-is-falling” doom predictions, reality points the finger of blame at both political parties and the bureaucracy they refuse to tame.

Either way, we are spending beyond our means, increasing the debt of future generations. Even if spending remains flat we are increasing the debt of future generations. Dispense with the hollow political rhetoric being spewed by the elected and opportunistic economic class and it all boils down to irresponsibility, political opportunism, and selfishness.

The ‘First Default In History’ Is A Lie

To listen to the proponents of raising the debt ceiling you would necessarily have to believe that the United States has never crossed the default Rubicon. But this is a pressure tactic that is mired in dishonesty, something we should have come to expect from any politician when they talk about expenditures and revenue.

According to Alex Pollack, a former principal Deputy Director of the Office of Financial Research for the US Treasury, there were four times in history when the United States defaulted on the payments of its debts:

The default on the US government’s demand notes in early 1862, caused by the Treasury’s financial difficulties in paying for the Civil War
The overt default by the US government on its gold bonds in 1933
The US government’s 1968 default by refusing to honor its explicit promise to redeem its silver certificate paper dollars for silver dollars
The 1971 breaking of the US government’s commitment to redeem dollars held by foreign governments for gold under the Bretton Woods Agreement

These are instances of very real defaults on US government debt. It can be said that it is incredibly disingenuous and, in fact, deceptive for any elected official, political appointee, or bureaucratic “newspeak doublespeaker” to claim that the financial integrity of the US government is at stake.

So, the issue becomes this. What do we do to stop the debt-rasing season from ever coming again?

Take The Credit Card Away

It is well past time that we acknowledge at least one reality. The federal government – as well as most of the state governments – exists in a constant state of fiscal irresponsibility. They exist as spendthrifts incapable of spending within the means provided to them by the people; the taxpayers.

Therefore, government – on every level – cannot be trusted to provide oversight unto itself. The mere fact that the elected class can decide to raise its own debt limit for spending; that they can simply raise taxes on the people and/or rack-up debt for future generations rather than spend within their means, is a form of oppression and totalitarianism: “The king wants another string of polo ponies for his loyalists and benefactors, levee a new tax on the producers.”

It is also important for us to be honest enough to admit that both political parties are guilty of over-spending and using the public treasury to facilitate opportunities for themselves and their parties, be it through the bribing of voters through “social” programs or providing subsidies and contracts to private sector entities that should be left to participating honestly in the market place.

Additionally, even though debt and deficit statistics are often chronicled by presidency, all financial legislation must pass through the US House of Representatives, be approved and reconciled by and with the US Senate, and only then – with the president’s signature – does the budget become functional.

So, when consuming information on deficit spending and debt, understand that just because a president submits a request for a certain budget, it is Congress that controls the actual purse strings.

Here is a list, by presidency, of how the nation’s debt has exploded in just the contemporary. Keep in mind that these statistics encompass multiple terms, the prosecution of wars, and – in Clinton’s case – the “peace dividend”:

Joe Biden (2021-present): $2,499,993,043,258.10 – an 8.79% increase
Donald Trump (2017-2021): $8,184,018,553,995.10 – a 40.43% increase
Barack Obama (2009–2017): $8,335,071,012,541.80 – a 69.98% increase
George W. Bush (2001–2009): $6,102,365,591,311.64 – a 105.08% increase
William J. Clinton (1993–2001) $1,395,974,529,060.68 – a 31.64% increase

In 1993, the debt at the beginning of Bill Clinton’s tenure stood at $4.411 trillion. Today, as we traverse the Biden tenure the debt stands at $31.807 trillion. Our debt – because of the federal government’s spendthrift ways; its abstract addiction to spending, has increased by $27.396 trillion in just 30 years.

To put that into perspective – and although the biggest percentage jumps occurred under the tenures of Franklin D. Roosevelt (1,473.73%) and Woodrow Wilson (722.21%) which include the participation in World Wars I & II, it took the United States over 200 years to rack up just one-seventh of the current debt.

So, it is a legitimate question. Shouldn’t we take the federal government’s credit card away?

Kill The Beast, Change The Rules & Trurn It Upside Down

As Communist China continues in its quest to replace the US financial apparatus as the world’s largest financial interest (with the help of the reprobates at the World Economic Forum, the World Bank, and – disturbingly – our own Federal Reserve), we in the United States must consider measures to affect radical change for our own financial preservation – both the country’s and for ourselves as individuals.

With every cent spent in deficit spending, with every nickel added to the national debt, with every raise of the debt ceiling, and with every unforgivable inflationary move by the Federal Reserve, we are allowing our own government to diminish the fruits of our labors, making us poorer for their actions.

And so it is that we – the citizens – must exert maximum pressure on our federally elected officials (read: public servants) to radically change the system or encourage our state governors and legislatures to invoke federal-government-neutering nullification measures, which I will be addressing in a forthcoming book: Nullification.

In consideration of navigating a solution to our spendthrift federal government, a few things must happen to stop the bleeding and then seal the wound for good. Among them I would suggest:

The Federal Reserve Must Be Leashed: The invention of the Federal Reserve and the subsequent Federal Reserve Act created an uncontrollable and unholy alliance between the wealthiest men in the world and the US federal government by which the Federal Reserve was given the exclusive right to “coin money”, an activity reserved to the federal government by the US Constitution, in the issuance of Federal Reserve Notes. Just as President John F. Kennedy proposed to do with Executive Order 11110, the federal government must take back that authority and relegate the Federal Reserve to an advisory role.
The US Dollar Must Be Married to a Tangible Asset: The removal of the US dollar from the gold standard (a move made by FDR, not Richard Nixon) may have seemed like a good idea at the time, but in retrospect, it was very shortsighted. The federal government must peg or tether the worth of the US dollar to a stable, reliable, tangible asset so that politicians and bankers can not manipulate the worth of the fruits of our (the taxpayers’) labors to constantly create soft cushion landings for themselves and their wealthy cronies during tough global economic times.
The US Federal Tax System Must Be Inverted: In order to force the federal government into financial responsibility, the whole of the US tax system must be inverted from one based on income to one based on consumption. This will require the revocation of the 16th Amendment. In tandem with this, the federal government would necessarily be forbidden from borrowing into the future without the existence of a national emergency and a four-fifths approval from the whole of Congress. This four-fifths majority would also be necessary – in tandem with a national referendum – to raise taxes by any percentage. All other taxing authorities – from any department, agency, committee, or institution – would immediately become null and void.

To the last point, this action would render the IRS an entity that provides oversight to institutional collection compliance, thus eliminating its interaction with individuals completely. If something is sold, the seller collects the tax percentage and it is remitted to the federal government. The consumer never interacts with the federal government.

Additionally to the last point, because the federal government would be forbidden from borrowing but for extreme circumstances (well-defined) with prerequisites, it would necessarily force the reformation of its spending priorities, eliminating the practice of buying votes with funding from the public treasury and eliminating the accrual of debt.

Even with all the potential vulnerabilities that would come with inverting our tax system to one of a consumption tax (not a VAT, but a true consumption tax) rather than an income tax, the benefits grossly outweigh the vulnerabilities, and the vulnerabilities could be addressed in the wording of any codification to the Constitution.

The Werewolves of Washington

Perhaps it is paradoxical to use the idea of Warren Zevon’s song to describe the cry of “Wolf!” so often used by our elected class; a cry that seeks to conjure fear amongst the electorate. But it is not a stretch to suggest those same wolf-crying opportunists are, in fact, predators; predators that feed off the wealth of the working class and our Republic.

Democrats proclaim – with straight faces – that Republicans are to blame for the “debt crisis” because they won’t allow them to keep spending in insane ways. Republicans – with straight faces – blame Democrats for spending beyond their means even when they hypocritically do exactly the same thing when in power. We, the people, are the ones with “clowns to the left of us and jokers to the right”.

One thing is for certain. If we do nothing and we just keep eating it and smiling, the song will remain the same…