Government shutdown and national collapse are not the inevitable results of the failure of the president and Congress to raise the national debt ceiling. If the debt ceiling isn’t raised, the federal government will just have to pay its bills from tax receipts rather than from borrowing.
That will require a lot of prioritizing. But if not now, when? Without prohibiting new debt, it will never be done.
Besides, the whole debt ceiling exercise is based on a misapprehension. The real issue is not debt at all but spending. Debt is a borrowing that has to be repaid. But the national debt has been going up for years and there will be no repaying it. Rather the debt — the issuance of U.S. government bonds — becomes money itself, as the markets treat the bonds as money. Thus the money borrowed goes from private hands into the government’s and then into the hands of those who are favored by the government.
Some of this redistribution is good. Since the government’s efforts to restore the economy have failed utterly and the real un- and underemployment rate is probably above 15 percent, now is hardly the time to curtail income support, food stamps and medical care for the poor.
But some of this redistribution is bad, horribly so. It is what sustains the stupid imperial wars in Afghanistan, Iraq, Libya, Somalia, Yemen, and other countries incapable of posing any threat to the United States, wars the government has no intention of winning, wars the public doesn’t support but tolerates because nobody has to pay for them and there is no military draft.
This redistribution underwrites the rescue of parasitic but politically connected financial institutions. It loads the country with pork-barrel projects needed only by politicians to buy votes. It pushes the compensation of government employees and contractors far above the compensation of everyone else. It finances the government’s growing intervention in every aspect of life.
Most of all, this ever-increasing debt has destroyed civic virtue by encouraging people to think that everybody can have everything he wants from the government at the expense of someone else and that no one ever has to choose. And it keeps government growing at the expense of the private sector, making the biggest question whether the country can sustain a private sector at all or whether government will take over everything.
Holding the debt ceiling where it is will force the country to choose between necessities like its social insurance system and all its stupidities. It’s well past time for that.
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Chris Powell is managing editor of the Journal Inquirer in Manchester.
