Increasing the federal debt ceiling will result in going further in debt and increasing interest costs. Neither is in the interest of the United States. Pundits and politicians are convulsing to convince us that the Republican solution, “Cut, Cap and Balance” is lunacy. They scream “extremist” and proclaim, “it can’t pass”. Their fear is understandable. It can pass and should.
Business as usual liberals state there is no responsible alternative to raising the debt ceiling. Untrue. Several solutions do not require our government to bury itself deeper in debt. In the real world, if you had $40,000 in the bank and were short $2,200 in paying your parents’ monthly obligations, obligations you agreed to pay, would you default on their payment? No, you’d write the check.
We have $400 billion in Ft. Knox. We’re short $22 billion in August to meet the Social Security cash flow. We can write a check and avoid default. Default is not automatic; it is a choice, a lousy one. Default is the boogeyman to scare Americans into allowing the feds to go further in the hole and continue spending 40% more than we can afford. Raising the debt ceiling encourages our addiction to spending. It grows the problem, not the solution.
The Obama budget is opulent. Liberal and conservative Members of Congress thankfully have opposite political philosophies. Pundits and the President want a “compromise” that raises revenues and the debt ceiling. That’s capitulation, not a compromise. Instead, conservatives must hold firm, stop increased spending and revenue enhancements (the fancy redefinition of a tax increase). Remember the ghost spending cuts in the last “compromise” with Pelosi, Reid and Obama?
The real federal battle is over the Balanced Budget Amendment. Nothing short of adoption is a victory for the American public. Call the President’s bluff. The United States of America is the strongest and richest nation in the world. We have the assets to pay our bills, to pay down our debts and to live quite comfortably within our means.
We have a huge array of assets, starting with $400 billion in gold at Fort Knox that can be liquidated to cover short-term costs instead of going further in debt and paying more interest. Dept. of Energy, reported on March 7, 2011 that the Strategic Petroleum Reserves consisted of 726.5 million barrels of crude oil stored in underground caverns. We’ve had these reserves since 1973, during the most dangerous times for oil security. We haven’t needed them. At $117 per barrels, the Gulf reserves will bring $85 billion. That’s more than enough to cover the deficit to pay for Medicare and Medicaid throughout the next fiscal year. And, sell U. S. owned oil royalty shares throughout the USA for literally hundreds of billions more. The feds could even allow more oil production in Alaska to directly increase our income as a nation.
For a double benefit, switch federal new construction from appropriated dollars to build, sale and lease back projects saving hundreds of billions. Major businesses use sale, leasebacks to increase their cash flow and reduce their debt. The federal government needs that same approach.
Conoco Philips used a sale lease back after it bought the ARCO tower in Anchorage to pay down $90 million in debt, reduce it’s interest costs and improve its cash flow. The federal government should launch a major leaseback program for its huge inventory of buildings. Sales would immediately pay down debt and supplement income sufficient to continue paying our troops, seniors and in fact all responsibilities toward our citizens.
When Joe Sixpack is cut off from credit, as millions are today, he prioritizes spending and reduces it. It’s time the federal government follows that example. America need not default on any debt. America can easily avoid default. Default is the wrong choice, as unnecessary as it is immoral.