Oracle of Liberty

Constitutional Liberty and Economic Common Sense

Today’s “Debt Ceiling Debate” lesson


“Keep your eye on one thing and one thing only: how much government is spending, because that’s the true tax … If you’re not paying for it in the form of explicit taxes, you’re paying for it indirectly in the form of inflation or in the form of borrowing. The thing you should keep your eye on is what government spends, and the real problem is to hold down government spending as a fraction of our income, and if you do that, you can stop worrying about the debt.”

 Milton Friedman

Today’s Education lesson is on the ‘Government Shutdown’, the idiocy of it all and why WE are a fool if we are for raising it, continuously.

Ok, below is what the government is bitching about, what it is using to perpetuate FEAR in you, and why we are SUCKERS in this game but go along with it because most of us are too uneducated to understand how WE are being played.

Simplistically (its way more complex but trying to herd cats here) – Treasury receives revenue (taxes) from the citizenry. Those revenues are then used to fund govt. operations (expenses). When the revenues are less than expenses then govt runs a deficit (similar to your household budget finances). To bridge that deficit it either prints money, borrows money, raises taxes or lowers spending. Since the latter is NEVER an option for a leviathan who eats its own then it leaves only 3 options to remedy its insatiable appetite to spend. Raising Taxes is political suicide so that generally comes as a last resort, really to save itself from the inflation and destruction they create when they resort to the other two options remaining, printing money and/or borrowing money.  This is where WE come in without really knowing it or believing there is an adverse impact to us since either of these ‘remedies’ artificially increases the wealth we feel we have.  First the Federal Reserve (the “Fed”) lowers interest rates to help spur a lifeless economy.  Then Treasury issues new debt (increased money supply) by floating a bond for the Delta (difference in offset) in revenue vs. spending. Often these bonds are sold to the private sector or other govts. When no one buys up the supply of these bonds then the Fed buys the bond (monetizing the debt).  When that is still not enough it RAISES TAXES. This is the never-ending game. Each of us are the chips on the table and the masters are pushing US around in an unending game of chess but making us feel that we are vital pieces for their game of thrones.

Today, the govt is complaining that if the debt ceiling is not raised then it will be unable to pay its obligations/debts. But, remember, Obama – the economic bozo he and his ilk are – claimed “raising the debt ceiling does not increase our debt”. While, in Clintonian terms, he is correct, this is like saying to your credit card company that you want a higher debt limit knowing your intention is to spend above your current debt limit.  So, ipso facto, raising the debt ceiling does, in fact, mean increasing your debt for if you didn’t intend to take on more debt (spend) then the debt ceiling would not need to be raised. To highlight the idiocy of this statement let’s flashback to 2011 and the Debt Ceiling debate then.  In August 2011, we increased the debt ceiling from $14.3 Trillion to today’s $16.394 Trillion limit (reached Dec 31, 2012) and must be resolved by October 17, 2013, according to Jack Lew.  A refresher course on how well we cut spending in the last debt ceiling negotiation…that’s right less than 3% over 10 years.  Pathetic!  Our deficit is now – for effect I included all 12 digits – $16,954,000,000,000.  If you are a taxpayer your share of this debt is $148,193.  Clearly, raising the debt limit DOES INCREASE our debt.  Plain and simple…give congress 1 trillion and they will take 3 trillion.

Government’s debt accumulated because it has spent more than it has forced us to contribute to them by the tune of $17 TRILLION (do you have a clue how much money that is???). If Congress, who is responsible for raising revenues, doesn’t somehow approve the president/treasury to be allowed to spend more money (which can only at this point be created thru printing press or borrowing money as raising taxes will crash the system) then this hurts everyone and causes us to default on said obligations. Essentially, it has forced us to pay for the obligations of government, while promising the proletariat it rules over to spend (borrowed or stolen) more than it has received from said taxpayers. But if Congress doesn’t approve of taking on more debt (spending) then ultimately the people the government forced money from will pay the price – NOT THE GOVERNMENT, but YOU!  And if it can’t extract and spend more money from us then there is chaos in the streets, supposedly.  How does this make sense to a lawful people is beside me.

So we have lent them trillions by which they mismanaged and overspent by $17 Trillion more than we gave them, but now somehow it’s our responsibility to owe them more money.  And if we don’t give them more money then our life will be ruined based upon the problem they created. This is why big government is evil…it creates a law (fix) to avoid a problem. It ‘fixes’ problems only to create a bigger problem in which it then creates a new law to remedy said problem. They are constantly fixing problems THEY create. And many of us are too dumb to realize it or prefer to ignore it.  Would you ignore a cancer growing on your forehead?  Our deficit is a cancer that has reached terminal stage 3.  Our destruction is imminent yet we bicker over which party is right on the issue.  Neither national party is because each party believes in spending.  It just differs on what and how to spend.  The last debt ceiling debate cut less than 3% from spending on a

Hopefully now you see how foolish you are if you agree that the debt ceiling should be raised.  It’s a never ending cycle of our collective selves being so foolish that they steal from us then make us fearful that if they cant steal more from us then our life will be ruined because the economy will shut down and everyone will be out of a job.  It’s fear mongering and they use money (greed/evil, right?) as the wedge to divide us. They pit the ‘haves’ vs. the ‘have nots’ in the canard that is devilishly used to divide us.

Circular firing squad, cannibalism and lunacy? This is the reality of our life with this government we have allowed to foster, grow and enslave us. Until some major policy change happens via the Will of the People then we can expect to sink with the Titanic of debt that is drowning us.

Enjoy the rest of your day!

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