President Barack Obama demanded Monday that lawmakers raise the nation’s $16.4 trillion federal debt limit quickly, warning that “Social Security benefits and veterans’ checks will be delayed” if they don’t and cautioning Republicans not to insist on cuts to government spending in exchange.
“They will not collect a ransom in exchange for not crashing the economy,” he said at the 21st and final news conference of his first term. “The full faith and credit of the United States of America is not a bargaining chip. And they better decide quickly because time is running short.”
“We are not a deadbeat nation,” he declared…
Orwellian language – speaking as though the opposite of the situation is somehow the situation – is a hallmark of the Obama presidency, and the statement reported above is typical. So many things wrong with it, it’s tough to know where to start.
First, who is holding hostages and demanding ransoms? Obama is.
When the Treasury hits the debt ceiling, the government doesn’t just shut down. Tax revenues continue to pour in (to the tune of $2.2 trillion per year), which the government can keep spending. It’s not enough to cover everything that has been budgeted; that is why we have a deficit, after all. Some spending will have to be slowed, or stopped. But Obama – and Congress, which is at least half Democrat-controlled – have considerable ability to ‘decide what’. They could choose to keep spending on Social Security and veterans’ benefits. Obama’s remark is a signal that he plans not to.
In short, Barack Obama is threatening to hold Social Security and veterans’ benefit checks hostage; while pretending not to. It’s how any good criminal makes threats in public: he mentions something important or valuable, officially professing his virtuous desire to protect it, and unofficially making clear that he has a knife at its throat, if you don’t do what he wants. (To be clear, Obama’s behavior is different from a criminal’s: Obama pretends, and perhaps could believe, that he isn’t holding the knife.)
Second, after years of Obama overspending and so adding trillions to America’s debt (and with trillions more to come), the “full faith and credit” of the United States already isn’t what it used to be. That’s why the price of gold has doubled since Obama took office. Smart investors understand that there is no way the U.S. can ever pay off its Obama-size debts without de-valuing the dollar (printing a lot of new dollars, which cheapens the dollars that you hold, making everything more expensive). Yet Obama makes himself sound innocent of the matter.
Third, the ‘deadbeat’ move here isn’t to refrain from raising the debt ceiling. The ‘deadbeat’ move here is if we do raise the debt ceiling.
Think of the debt ceiling as your personal credit card limit. If you keep hitting your limit, the right thing is for your limit to not be raised any more. That would force you to live within your means. Living within your means would restore your solvency and hence, it would restore real confidence in your prospects and ability to repay. If you keep asking to have your limit raised (as you keep piling on more debt, rather than paying it down), that is when you are a deadbeat.
In effect, Obama is telling the credit card company (Congress) “You need to keep letting me borrow more and more than I can ever repay, because… (drumroll…) I have a policy of not being a deadbeat.” It is either Orwellian, or the behavior of a spoiled teenager. Take your pick. But either way, let’s not kid ourselves: We will raise the debt ceiling, not to avoid being a deadbeat nation, but precisely because we are one.
(NB: Made several edits after initial publication; mostly typos, but also changed an adverb or two, added ‘categories’ and added a new last sentence.)