Debt Ceiling and the Deficit

Listening to the news, it would seem that it is time for the President, our Senators, and our Representatives to actually find some solutions on the debt ceiling based on what we regular Americans already know.

First, we are spending far more than we take in. A trillion dollar deficit increases our national debt. Since 2008 we have added 4 trillion dollars to our national debt. The only way to stop growing the debt is to reduce the deficit spending to zero. It doesn’t seem that this concept is all that hard to figure out, at least for those of us who live out of the infamous beltway.

Will reducing the federal spending hurt? Of course it will. Some federal employees may lose their jobs, some people living off the flow of money from the federal government will lose their income, and some companies will need to find new clients. It will be similar to what many of us around the country have experienced over the past several years.

The upside is that without the federal government spending every available dollar, the economy may begin to grow which would provide new jobs and opportunity.

Second, the debt ceiling is about spending. Congress has demonstrated their ability, over the past decades, to spend whatever amount is collected in taxes and more. We must start the process to only spend what we collect in taxes and fees (revenue). To continue increasing the limit on the federal credit card without a plan to halt the growth of the debt is foolish at best. At worst, it is destructive to every American’s future.

In our lives, if we leave large debts, they are paid out of our estates when we die. That means our family has a smaller inheritance. For the federal government that means the following generations are left with more bills than opportunities.

Third, if we want to actually solve this problem, Congress needs to do their job and pass a balanced budget. Then we need to live within our means, just as families across our nation already do. Discussions on raising revenue (tax and fee increases) and eliminating tax credits should be a part of the budget discussion, not a negotiating tactic in dealing with the debt ceiling.

Americans know what happens when your personal or corporate debt grows too large, we go bankrupt. Watching Greece, Ireland and other countries that have failed to keep spending under control should serve as a warning to us. I’d suggest that the approach that regular Americans take toward debt be followed by our government.