Don't Raise the Debt Ceiling!

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As of November
7th, the total U.S. public debt outstanding reached an astonishing
$13.7 trillion. This means that although Congress just raised the
debt ceiling to $14.3 trillion back in February, the new Congress
will face another debt ceiling vote almost immediately next year.
Otherwise, the Treasury will not be able to continue issuing debt
to fund government operations.

The upcoming
vote will provide an interesting litmus test for the new Republican
congressional majority, especially those new members closely identified
with Tea Party voters. The debt ceiling law, passed in 1917, enables
Congress to place a statutory cap on the total amount of government
debt rather than having to approve each individual Treasury bond
offering. It also, however, forces Congress into an open and presumably
somewhat shameful vote to approve more borrowing.

If the new
Congress gives in to establishment pressure and media alarmism about
“shutting down the government” by voting to increase the
debt ceiling once again, you will know that the status quo has prevailed.
You will know that Congress, despite the rhetoric of the midterm
elections, is doing business as usual. You will know that the simple
notion of balancing the budget, by limiting federal spending to
federal revenue, remains a shallow and laughable campaign platitude.

Of course congressional
leaders – now Republicans – will tell America that they
plan on balancing the budget soon, but they just need some time.
After all, we have to keep the government open, right? We can’t
have an “emergency” shutdown of vital government services.
But somehow Congress always finds money for emergency spending,
in the form of supplemental appropriations bills for TARP bailouts,
troop surges, and the like. Why is there never an emergency that
justifies less spending???

Surely we are
facing an emergency debt spiral, as evidenced by the Federal Reserve’s
recent commitment to buy another round of Treasury debt. It’s
now quite obvious that the U.S. government plans to inflate its
way out of debt, and the world is fleeing our dollar in response.
Just 7 years ago Congress raised the debt ceiling to $6.4 trillion,
which means the federal government had doubled its indebtedness
in less than a decade. Annual deficits for 2011 and beyond are projected
to be at least $1 trillion. By contrast, the entire federal debt
amassed from the founding of our nation until President Reagan took
office in 1981 – a period of roughly 200 years – was $1 trillion.
So it’s no exaggeration to state that federal debt is growing
exponentially.

I have two
simple proposals when the new Congress convenes in January. First,
refuse to raise the debt ceiling. Find a way, month by month, for
Congress to spend only what the Treasury raises in revenue. Second,
start over from scratch with the 13 appropriations bills that fund
the federal government. Reject any talk of baseline budgets or discretionary
spending. It is all discretionary, and members of both parties should
vote against any 2012 appropriation bill that is not at least 10%
smaller – in nominal dollars – than its 2011 counterpart.

A motivated
Congress could begin to slow the tide of debt by taking the simple
step of cutting federal spending by 10% across the board for the
next few years. Let’s hope it does not take the complete collapse
of the U.S. dollar to provide this motivation.

See
the Ron Paul File

November
30, 2010

Dr. Ron
Paul is a Republican member of Congress from Texas.

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