The Next Sequester, The Next Disaster

Co-written by Kim Crumb & John Doble

Setting the stage for a fall budget showdown over raising the nation’s debt ceiling, House Speaker John Boehner, R-Ohio, renewed Tuesdau (7/23) his insistence that “we're not going to raise the debt ceiling without real cuts in spending. It's as simple as that.”

So how might you be affected?  Below is a chart (Chart 1) that reflects government spending.  If you add-up spending on: defense, Medicare/Health and Social Security/Labor you now have 75% of the budget.  With calls for “smaller government,” it's useful to say “where will the cuts be made?”   We're already near a modern historical low to have the “discretionary” part of the budget be only 25%.   If you add interest payments and veterans benefit's, that leaves 15% for everything else government does.

Boehner isn't admitting it, but the sheer math indicates that further cuts will hit many programs that we all use every day – Medicare, Social Security, and “tax spending” programs like the home mortgage interest deduction.  People have inflated ideas of what's being spent on things like “foreign aid” so they can indulge the illusion that huge cuts could be made without it hitting them.  The “easy” cuts don’t exist anymore.  The kind of draconian spending cuts Boehner is talking will cause serious pain to many average Americans.

Just how bad is our national debt? Are we really in a crisis by US historical standards?   Examining a chart from the time of the Constitution up to 2011 (Chart 2), it is obvious that our national spending during WWII stands far above anything we’ve had before or since.   Our current spending is not that extreme by historical standards, and unlike Reagan’s deficits, are entirely the cause of the Great Recession, not reckless spending.

Zooming in for more detail (Chart 3), the WWII deficit still stands out and our current deficits are rapidly dropping down from the peaks caused by the Great Recession, and the CBO forecast that they’ll continue dropping for the next few years..  Taken in perspective, does that look like an immediate crisis to you?  Can you even tell the 2014 deficit from those Reagan years that are portrayed, by many of the same people, as “good times?”  Republicans didn't claim that was a crisis, then, why do they now claim a similar percentage of debt-to-GDP ratio requires sudden-and-drastic action?  

The answer is?  “Divide and conquer” politics.  They are inventing a crisis to pit one group of citizens against another and to justify extreme acts that fit their ideological agenda. They never ask, “what am I willing to give up for myself?” but “what should somebody else give up?”  A recent example is the new farm bill that gives billions to large agribusiness and drops food stamps, depriving millions of poor people the ability to feed their families.  The principle seems to be: large government if OK, as long as it supports business, but “bad” when it supports everyday people. 

Moreover, raising the budget ceiling has nothing to do with current spending, it's just about paying for past outlays that has already been legislated and spent. Have you ever thought about what that means if it were applied to your life? If you stop paying your bills on what has already been purchased, how would that work out for you?  It damages your credit while not changing your upcoming spending at all.  It's not a responsible approach at all.  

During the last debt ceiling showdown we got the “Sequester” as the “solution.”   It was designed to be so damaging that Congress would never let it go into effect, that they just would be forced to take action first, rather than hurt the country with such detrimental and indiscriminate cuts.  So what happened?  The Republican House insisted that the sequester go into effect, and earlier this year, it did.  This is why we are not an optimists on this, and neither should you be. Boehner's rhetoric is a re-run of the same blunt force economic trauma, and the dismal results will be further damage our economy and citizenry.

Do you want that to happen to you, your family, your neighbors and friends...our great country?  Then please call your Congressman and insist that the debt ceiling not be used as “hostage” to anything else.  Otherwise you might find some program that matters to you soon will be held “hostage.” 

If you won’t listen to us, would you listen to Benjamin Franklin? 

As a Founding Father, Benjamin Franklin was leaving the Constitutional signing and a lady asked him, “What have you given us?   His reply: “A Republic, if you can hold onto it.”  He wasn't mincing words, he was warning us that every generation would have to take a stand for the Common Good.   How about calling (or tweeting or e-mailing) your Congressman now, before the Debt Ceiling Showdown makes this worse than it has to be, like the Sequester, yet again?  I doubt Franklin would be accepting any lame “I'm too busy” excuses about shirking this duty.   What future do you want for America?