1-14-2013 John Campbell Newsletter
Posted by Newsletter Reprint on January 14, 2013
This just came across the wire from the office of Congressman John Campbell:
Monday, January 14, 2013
Debt Limit: The president says that we should just extend the debt limit, or cede the authority to him to expand it as he wishes. I’m sure he probably doesn’t think we even need such a discipline at all. He says he will not negotiate on this issue. He says that Congress has already approved all the spending that led to these deficits.
Like on most things, the president is completely wrong.
If credit cards had no limit on them, a whole lot of people would spend without end. The debt limit is like that. It is a discipline that reminds us Oh yeah we’ve just borrowed $16.4 TRILLION. That’s kind of a lot. Maybe we shouldn’t spend so much. Weve borrowed 35% ($5.805 trillion) of that since Obama took office. Maybe we ought to think about it before we try to borrow $7 trillion more, which is an approximation of how much more this president wants to borrow in his second term. And, as I understand him, the president won’t negotiate on this. In fact, he has yet to negotiate on anything. No change here. And, as far as Congress already approving the spending….that’s not correct either, Mr. President. Sixty percent of all federal spending occurs as a result of entitlements, which do not require any action by Congress on any periodical renewal. They continue without end unless Congress acts to change them. In my nearly 8 years in Congress, I have voted to reform and reduce said entitlements every chance I have gotten. But, never once have said bills passed the Senate.
I did not vote for this spending, Mr. President, and I don’t support it. Nice try.
This member of Congress will vote to increase the debt limit. But, only if there is significant, substantial and meaningful reform to several entitlement programs that starts to reduce the curve on our deficits by a noticeable amount immediately. Only a third of Medicare costs are covered by the taxes. The rest is borrowed. That cannot continue. Medicare will fail. Social Security is better off, but still under water.
The food stamp program has increased by 270% since 2002. Medicaid is rampant with inefficiencies and abuse. Student loans are burying kids in debt they will never be able to repay. And, there are about 400 other entitlement programs out there. Reforming entitlements is a target-rich environment. I’m flexible as to what said reforms should be. There are lots of options.
But, I am not flexible on this: I will not vote to raise the debt limit without said cost-saving and deficit-reducing reforms. Period. I understand that if we go past the ability of the federal government to borrow money, federal spending will be limited to how much is received. (Shocking thought!) I understand that this could cause major disruption in the financial markets. Foreign markets may lose faith in Treasury securities. A lot of federal programs will be shut down or reduced. A whole lot of people, including yours truly, won’t get paid. None of this is good.
But, if we don’t get these deficits under control, we will soon have a debt crisis which will be much worse than what I just described – and we will have no way to get out of it without tremendous pain. This is not conjecture. The only 3 countries on earth with a worse debt to GDP ratio than the U.S. are Greece, Spain and Japan. All 3 have had different outcomes from their respective debt crises, but all of them are bad. This president has shown no interest in or capacity for dealing with these deficits. I don’t know if he subscribes to the now disproven theory that deficits don’t matter or if he is just oblivious. But clearly, if the House does not act here, we will have a crisis at some point very soon. I don’t want to have to go past the debt limit with the consequences thereof. But, better to have such consequences of our own making at a time of our own choosing, when we have the ability to fix them, than to have much worse and uncontrollable consequences for which we are unprepared.
Why am I so firm about this? I have been a spending and deficit hawk since I was first elected to the California State Assembly in 2000. I was a spending hawk in my business for 25 years before that. Maybe it is my Scottish heritage. Maybe its because that’s the way CPAs like me are. I’m not sure.
But, for me now, this is beyond just a political position. It is beyond a fiscal position. It is a moral imperative.
Stay tuned for the next laptop on this subject. Once again: Same bat time. Same bat channel. (Actually why did I like that show? It was so campy.)
Until next time, I remain respectfully,
Congressman John Campbell