Hornberger's Blog

Hornberger's Blog is a daily libertarian blog written by Jacob G. Hornberger, founder and president of FFF.
Here's the RSS feed or subscribe to our FFF Email Update to receive Hornberger’s Blog daily.

What about the Debt Ceiling?

by

Let’s not forget the big debate several months ago over whether the debt ceiling should be raised. It’s important that we periodically revisit this issue before the new ceiling is reached in couple of years from now, at least to show the fraud that U.S. officials and the mainstream media engage in each time the ceiling is reached.

First of all, why the ceiling? What’s its purpose?

The debt ceiling is an acknowledgment that when the government incurs too much debt, that is not a good thing for the country. By setting a debt ceiling, public officials are essentially saying that the amount of debt now owed by the government will be so large that the government will be prohibited from incurring any more debt on top of the existing debt. The ceiling sets the maximum amount of debt that the government will be permitted to incur.

Thus, when the debt ceiling was reached several months ago, the government was prohibited from adding more debt onto the amount of the existing debt. That would necessarily have required the government to make massive spending cuts to match the amount being collected in taxes, which would have enabled the government to avoid borrowing any more money.

So, the debt ceiling is an acknowledgment and a protection — an acknowledgement that the government has already incurred an excessively large amount of debt and a protection for the American people that the government won’t go over that amount of debt.

But we all know it’s just a fraud. After all, a ceiling is a ceiling. If it’s going to be raised each time it’s reached, then it’s not really a ceiling at all.

Yet, that is exactly what happens every time the debt ceiling is reached — it’s raised and a new debt ceiling is then set. Everyone knows that when the new ceiling is reached in a couple of years, the ceiling will be lifted again.

In the meantime, the amount of debt owed by the government continues to grow, which, as the debt ceiling acknowledges, is not a good thing for the country.

Recall all the angst displayed by the mainstream media during the last debt ceiling debate. The world would collapse, the media cried, if the debt ceiling wasn’t raised. They were making all sorts of dire predictions as to what would happen if the debt ceiling wasn’t raised.

Of course, each time the ceiling is approached some Republicans promise that they’re not going to vote to raise the ceiling. Every time, they assure us that they are “fiscally conservative” and that they’re not going to break their promise. But everyone knows that that’s precisely what they are going to do. They back down every single time, especially when the mainstream press starts screaming at them to raise the ceiling.

The whole process is nothing but a sham — a charade. The statists want the federal government to continue spending as much as it has been spending plus more, both on the warfare state and the welfare state. Oh, sure, they’re hoping for “growth,” which means they’re hoping for more tax receipts, but if that doesn’t happen their position is spend and borrow and spend and borrow.

Consider the mainstream media’s position since the debt ceiling was raised the last time. Do you see them calling for massive reductions in federal spending in preparation for the new debt ceiling that will be reached in a couple of years from now? Do you see them saying, “Look, we were lucky that the Republicans caved the last time but now we have a real debt ceiling in place, one that cannot be raised the next time”?

Of course not. In fact, most of the mainstream media is telling us how important it is that the federal government continue spending and borrowing no matter what. They’re saying that it’s the key to economic prosperity. And they know that the Republicans will cave again under the pressure of the mainstream media.

What’s going to happen in a couple of years from now, when the new debt ceiling is reached? The whole charade will start all over again. There will be tremendous angst, and the mainstream media will once again pull out all their dire predictions and exclaim how urgent it is to raise the ceiling again. Never mind that they didn’t give a whit about reducing federal spending for the previous 2-3 years. And of course, the Republicans will promise that this time they’re not going to raise the ceiling even though everyone knows they will end up folding and do precisely that.

If truth be told, the statists, both in office and in the private sector, would love nothing more than to abolish the debt ceiling and then just let federal officials continue spending and borrowing to the heart’s content. After all, don’t forget that the debt ceiling is an express acknowledgement that too much debt is a bad thing. Each time it’s reached, Americans are reminded that public officials, with the full backing of the mainstream press, are doing something really bad to our country.

Just ask the Greeks. They’ll be happy to talk about the consequences of too much government debt.

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.