There is one simple and effective way to cut excessive spending, the primary cause of debt, when expenditures overflow budget borders and that is to reduce spending. Reductions in spending would also help to mitigate the disastrous effects of inflation. Both these revelations have come as a great affront to state and national Democrats.
Republicans in the U.S. House of Representatives have proposed to enforce a current debt limit – sort of – and reduce expenditures over the long run so that Republicans and Democrats in Congress will in future years not be on the same political stump barking at each other.
The national and state debt ceilings, presumed obstacles to unlimited spending, have not prevented the kind of raging inflation that is nibbling at middle class prosperity. Taxpayers tend to be responsible because they know that, unlike the federal government, they cannot print inflated funny money to cover their debts. Still less are they able to borrow unlimited sums of money before being reeled in by banks.
In order to end inflation, raging throughout the country since President Joe Biden had put a stop to fossil fuel production, the federal government has raised interest rates, which curtail borrowing. This, in turn will slow down the economy, demand-siders assert. The chief problem with the economy, of course is not that demand is excessive, supply-siders insist. It is that supply is insufficient to meet demand. Supply increases reduce unnaturally high price inflation.
Rosa DeLauro, the U.S. Representative for Connecticut's 3rd congressional district since 1991, is not worried about inflation, or the reduction of jobs and wages relative to an unsupportable inflation rate of about 8.6 percent, or excessive spending both nationally and in her state. Increases in spending ineluctably lead to tax increases, or the printing of depreciated currency, or excessive borrowing, or business flight to states that are more worried about excessive spending than the phlegmatic DeLauro or Connecticut’s Democrat dominated General Assembly.
The words “cut spending” do not fall easily from DeLauro’s lips, particularly at times when elections demand that politicians offer solutions to problems they themselves have caused through foolish spending. Nor is DeLauro much worried about losing a congressional job she has held for more than three decades. Through the storms and fires of inflation, DeLauro’s assets – she and her husband are multi-millionaires – have remained steady, as was the course of the Titanic before being introduced to the iceberg.
Just now, DeLauro is worried about a national debt limit that, as its title suggests, is designed to “limit debt,” i.e. “limit spending.” Both the poorest of the poor and struggling middle class workers know that debt causes misery. “Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness,” says Mr. Wilkins Micawber, a clerk in Charles Dickens's 1850 novel David Copperfield. “Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
Debt ceilings, when they are properly applied, reduce debt by reducing spending. You cannot, Mr. Micawber realized when he was hauled off to London’s debtors’ prison, spend your way out of debt.
Here is DeLauro fulminating in an op-ed piece, “I warned Republicans about their debt ceiling bill. I was right,” against Republican Party efforts to reduce the national debt through prudent spending cuts: “On Wednesday, Republican House Speaker Kevin McCarthy unveiled a bill he claims will fulfill our debt limit obligations. In truth, the bill holds the economy hostage in exchange for slashing investments important to American families.” The McCarthy bill increases the national debt ceiling by $1.5 trillion and freezes spending at 2022 levels.
“In exchange for a short-term increase in the debt ceiling,” DeLauro writes, “the speaker’s proposal drastically cuts spending for 2024, then compounds those reductions by capping investments for the next 10 years. To be clear, Republicans are threatening a default on our debt unless we gut vital programs.”
According to Reuters, “The House bill would increase Washington's borrowing authority by $1.5 trillion or until March 31, whichever comes first, raising the specter of another round of negotiations during the 2024 presidential campaign. The bill would pare spending to 2022 levels and then cap growth at 1% a year, repeal some tax incentives for renewable energy and stiffen work requirements for some antipoverty programs.”
President Joe Biden has refused to meet with Republicans to discuss their measure. Bipartisan compromise on issues of major national importance has consistently been put off the table by this president. Almost every preceding Democrat president has compromised with Republicans on budgets and debt ceilings. Welfare work requirements were imposed by President Bill Clinton.
In all honesty, what do you call a “debt ceiling” that remains unenforced, so that year after year the ceiling is raised to accommodate more spending, while no sensible provisions are adopted to reduce spending? There can be no “ceiling” to such spending. It is because national and state politicians haven’t the common sense of a Micawber that the nation is nursing a debt of more than $31 trillion, while Connecticut is in debt by some $42 billion.