Senator: No Debt Ceiling Hike Without A Balanced Budget
Video - Raising the Debt Ceiling: It Just Makes Sense. Not.
As Reason columnist and Mercatus Center economist Veronique de Rugy, has pointed out, we’ve maxed out the nation’s credit card in the past without dire results. In the mid-1980s, the mid-1990s, and in 2002, for instance, the debt limit wasn’t raised for months at a time and the government got along just swell. The government has a big bag of tools it can use, ranging from playing around with the amount of spending that is liable to the limit to prioritizing interest and debt payments over other outlays. Interest on the debt for this year is projected to be about $225 billion and government revenue is expected to be around $2.2 trillion, so the government can easily pay the vig and avoid defaulting.
The boldest plan to rein in spending and debt comes from newcomer Sen. Mike Lee (R-Utah), a Tea Party favorite who dispatched Republican incumbent Bob Bennett in the primaries before coasting to victory in the general election last fall. Lee has vowed to block passage of a debt-limit increase unless Congress signs on to his balanced-budget amendment which would cap annual federal spending at 18 percent of Gross Domestic Product (GDP). The amendment would require a super-majority of two-thirds in the Senate and House of Representatives. Lee’s bill is competing with another Republican proposal from Sens. Hatch (Utah) and Cornyn (Texas) to cap spending at 20 percent of GDP. The Hatch-Cornyn bill has weaker rules on its higher cap as well.
In 2010, spending came to about 24 percent of GDP and it’s expected to come in around 25 percent of GDP in 2011. Since 1950, total federal revenues have averaged 17.8 percent and have reached higher than 20 percent exactly once. Spending over the same time has averaged just under 20 percent.
Sen. Mike Lee, R-Utah, repeated Monday his plans to block raising the federal debt ceiling until a balanced budget amendment is brought to a vote. An amendment Lee coauthored with Sen. Jon Kyl, R-Ariz., would require Congress to balance the budget each year and keep spending at 18 percent of GDP.
“It’s unsustainable, and it’s also way out of whack with what the practice has been over the last 40 years, which puts us between 18 and 19 percent of GDP,” Lee said on Fox & Friends. “We need a federal government that’s not so big and so expensive.”
May 6, 2011 at 12:22 PM
Reader Comments (5)
http://alethonews.wordpress.com/2011/04/11/nyt-demands-libyan-war-escalation/
http://www.trust.org/alertnet/news/slight-amounts-of-strontium-found-near-crippled-japan-nuclear-plant
Why is the Federal Reserve forking over $220 million in bailout money to the wives of two Morgan Stanley bigwigs?
http://www.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411
[snip]
The technical name of the program that Mack and Karches took advantage of is TALF, short for Term Asset-Backed Securities Loan Facility. But the federal aid they received actually falls under a broader category of bailout initiatives, designed and perfected by Federal Reserve chief Ben Bernanke and Treasury Secretary Timothy Geithner, called "giving already stinking rich people gobs of money for no fucking reason at all." If you want to learn how the shadow budget works, follow along. This is what welfare for the rich looks like.
Obama's Budget Has One Small, Missing Piece.... For $6.3 Trillion Dollars
http://www.zerohedge.com/article/obamas-budget-has-one-small-missing-piece-63-trillion-dollars
Yea obama has to keep his buddies at the banks happy
Unlimited credit for GSEs seen as backdoor bailout
http://www.reuters.com/article/2010/01/05/us-usa-housing-bailout-idUSTRE6044YU20100105
Prof Suspended For Having Lap Dancers Perform in Business Ethics Class (and Charging Students $150)