Jul 20, 2011

Cut, Cap and Balance Passes House

Chuck MisslerBy Dr. Chuck Missler
Koinonia House

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"The budget should be balanced; the treasury should be refilled; public debt should be reduced; and the arrogance of public officials should be controlled." - Cicero. 106-43 B.C.
In an effort to hold the Federal Government to responsible spending practices, the United States House of Representatives has been bubbling over America's financial situation, and a "cut, cap and balance" budget plan passed the House on Tuesday with a vote of 234 to 190.

House passes 'Cut, Cap and Balance' billWhile the bill has been expected to get hung up in the Senate, the House version comes with an allowance for the nation’s debt ceiling to rise by $2.4 trillion if both the Senate and the House pass a balanced budget amendment. The bill comes at a time when the United States needs to get more serious than ever about fixing its money problems.

The national debt of the United States is about $14.5 trillion these days. According to the 2010 US census, the population of the United States is just about 311 million, which makes each citizen's share of this debt in the area of $46,624. If each family of four were able to toss $186,500 at the national debt, it would get paid off! The sooner the better too, because the debt has been increasing on an average of $3.85 billion per day since September 2007. Sadly, most of us don't have $46,624 in our back pockets.

When the US government spends more money than it brings in, that's called poor management deficit spending. The national debt is caused because the Federal Government has been content to spend outside its means for a long long time. The national debt was $1 trillion in 1982 when President Reagan first pushed for a balanced budget amendment. In 2000, the debt was up to $5.65 trillion. Now, just 11 years later, the US owes $14.5 trillion in debt, a whopping 96.5 percent of its Gross Domestic Product.

President Obama's budget presented to Congress included more than $1 trillion – that's $1,000,000,000,000 – in new deficit spending for just next year. We're seeing a trend; the 2009 annual deficit was $1.89 trillion, and in 2010 it was $1.65 trillion. The Senate unanimously voted against the newest budget, but there is a demonstrated willingness in Congress to spend spend spend America to its demise.

The US Federal Government has gotten hugely obese, a monster that requires much more sustenance than the nation’s financial structure can handle. There are two basic answers to dealing with the financial disparity before the system collapses under all that weight; we either increase tax revenue or cut off the calorie supply to the giant. It would be foolish to raise taxes on a country with struggling businesses and high unemployment. The answer then has to be reducing the exhausting exercise Congress forces on our federal pocketbook every year.

The current budget plan would cap federal spending at 18 percent of the US GDP, since that is the average amount brought in by tax revenues each year. In other words, the US would have to only spend as much money as it gets each paycheck. It can't borrow from the future anymore.

The critics have bellowed at the prospect of cutting spending, though. They declare that the economy will go under if the government doesn't keep pouring money into it, that old people will not get Social Security and children will starve from lack of food aid.

Norman J. Ornstein wrote Monday in The Washington Post,
"It is hard to make the case that decapitating food inspection, air traffic control, scientific research, Head Start, childhood nutrition programs and more, as the amendment would almost certainly require, would lead to a healthier economy, itself a necessity to solve the debt problem."
Nobody wants Grandma out on the street because there's no money in Social Security for her after she paid into it for 50 years. Nobody wants the dollar to be so devalued that when Grandma does get her Social Security check, it's not worth enough to pay her electric bill. We've gotten ridiculously dependent on Uncle Sam's handouts, however, and we need to do some major revamping of our priorities. We have to.

"Our bloated and obese federal budget needs a healthy and balanced diet, one that trims the fat of overspending and grows the muscle of our nation's economy," said Rep. Reid Ribble of Wisconsin, one of the 87 first-term House Republicans determined to reduce the size of government.

Americans need to get away from the idea that it’s somehow good to spend money that the country does not have. If the money isn’t there today, it most definitely will not magically appear tomorrow.

Related Links
Dueling Debt Ceiling Strategies - FrontPage Magazine
'Gang of Six' provides hope for debt talks - Reuters
Reid says he's waiting on Boehner to tell him 'path forward' on debt - The Hill
Entitlement programs consume Gross National Product and more - Washington Times
Oil rises as debt talks continue in US, Europe - MSNBC