Cancel the Country's Credit Card
February 4, 2011
Cancel the Country’s Credit Card
As Governor of California, Ronald Reagan said: “For many years now, you and I have been shushed like children and told there are no simple answers to the complex problems which are beyond our comprehension. Well the truth is, there are simple answers they just are not easy ones.”
It is with this same mindset and outlook that we must approach our country’s financial situation.
Last Tuesday I attended the President’s State of the Union address. This is an important annual tradition, but in many regards is more symbolic than substantive.
Disappointingly, the word “debt” only appeared in the President’s prepared remarks one time.
Our federal government is at an economic breaking point, which presents a serious threat to our nation’s financial well-being. For far too long, Washington has been unwilling to make tough decisions to put the country on a path to fiscal responsibility.
The reality of our country’s debt crisis cannot be overstated. The nation’s debt amounts to a shocking $120,000 per family. They have dug future generations into a hole from which they may not be able to climb.
In a few months, Congress will be asked to raise the country’s debt ceiling and sign on the next generation’s behalf an even larger liability. As a result of 11 increases since 2002, the current limit is $14.3 trillion. The most recent increase took place in February 2010 and was the largest in American history - a record $1.9 trillion.
Proponents of raising the debt ceiling claim the move is necessary in order to avert economic disaster. To say that we must spend more now to save later is faulty logic that has proved false again and again - both in the failed stimulus and bailout plans. After their massive borrow and spend efforts, unemployment is even higher and our deficit out of control.
There will be many proposals of “compromise” put forth ahead of the debt ceiling vote. One such compromise will be spending cuts, and some have offered $74 billion as a starting amount. I propose raising the spending reduction floor to at least twice that -- add in real spending caps for next year -- and then we can talk. Alongside fiscal sanity, we must demand the elimination of excessive regulations that choke job creation. Businesses must be allowed to flourish, free of federal impediment or intervention.
When the House is asked to vote on raising the debt ceiling this spring it is an opportunity for our new Congress to establish a clear path for fiscal responsibility. This will include addressing not just our existing debt, but finding ways to end the culture of spending money we do not have by cutting up the nation's credit card. In that same speech as Governor, Ronald Reagan called on Californians to decide “whether collectively we can afford everything and anything we think of simply because we think of it.” Congress must embrace this mentality when deciding what expenses are worthy of the taxpayers’ dime.
As we mark the 100th anniversary of the birth of Ronald Reagan, my favorite President, let us observe his wisdom and remember that while the task may be daunting, the solutions for economic prosperity are straightforward.