Courtesy of Mish.
My best friend in high school, David Wise, wrote an interesting OpEd for the Baltimore Sun two days ago. I do not agree with all of it, but he does hit the nail on the head of the critical issue as to who is to blame for the default impasse.
Wise says Obama must not allow a default.
I happen to think that a default would not be catastrophic. However, that debate is moot because the odds of a default are a million-to-one, if not higher. So let’s get down to the critical paragraph.
Congress has the power of the purse and the power to tax under Article 1, Section 8 of the Constitution. If Congress authorizes too much spending or permits inadequate revenue generation, it hardly makes sense that it can override the results of the exercise of these Constitutional powers by a mere statute, any more than a person who runs up credit cards purchases could try to avoid responsibility for debts by telling the credit card company that the amount exceeded some artificial total amount of debt that he has vowed not to exceed. Alan Greenspan once said in an interview: “Why do we have a debt limit in the first place? We appropriate funds, we have tax law, and one reasonably adept at arithmetic can calculate what the debt change is going to be.”
Ultimate Irony
Please note the irony. Congress has full and complete constitutional power to enact spending, and it does that “too well”.
Congress then attempts to enforce a ceiling on the national debt (debt that is 100% caused by Congressional overspending).
Obamacare vs. the Debt Ceiling
Obamacare is a bad bill, and I welcome attempts to modify or delay it, but given that Boehner is Prepared to Cave-In to Obama, and given that Obama is not going to sign any bill he does not like, political grandstanding is going to do nothing except make Republicans look foolish.
Tax Cuts and the Deficit
One can praise Republicans for cutting taxes. But one cannot praise Republicans for failing to cut expenses at the same time.
Wise writes …
In 2001 the Republicans took control of the White House and both houses of Congress. At that time the U.S. budget was in surplus and the entire national debt was projected to be paid off. The Republicans proceeded to run eight straight deficits — gutting revenue collection while increasing spending — on the way to generating the first trillion-dollar budget deficit under President George W. Bush and leading the economy into the worst financial crisis since the Great Depression — all factors with which the U.S. economy is still contending.
Who Broke Washington?
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