An Interesting Catch-22
July 3, 2011 Leave a comment
Congress is deadlocked between the Democrats and Republicans over the issue of the budget. Essentially the Democrats are calling for closing loopholes in the tax code, which would lead to increases in taxes among corporations and the wealthy. The Republicans are calling for cuts in spending, which will severely reduce Medicare and drastically alter Social Security.
While the Democrats have been willing to negotiate on some issues, they have managed to stand ground on the need for actual tax increases. The Republicans feel that they can pressure the Democrats by walking out. As things currently stand, there doesn’t seem to be a way that both sides of Congress can get together to pass a new bill authorizing more debt, taxes, and spending (or reduction thereof).
So, what’s the problem. Well, without increasing our current debt “ceiling”, the United States cannot borrow more money. If we can’t borrow more money, then we have to start cutting back on our monetary obligations. The government would only be able to pay it’s obligations based on the revenues it has. This means a stall in new government programs, and given that we already are running a deficit and have to service debt on money borrowed, as well as things needed for daily life – payroll, utilities, social security, medicare, etc, drastic measures will be needed. First, a halt to new programs, cutting back on existing programs, furloughing government workers, and even starting to default on debt or obligations -ie only paying out 70% of someone’s social security benefits.
However, there is talk of a “nuclear option”. Essentially, there is an interpretation of the 14th Amendment where Congress is not actually needed to authorize new debt for the Federal Government. Exercise of this by the Executive could go virtually unchallenged, except by perhaps a joint resolution of Congress.
And therein lies the catch-22. See, if Congress were in a position to authorize joint resolutions pertaining to the national debt, the nuclear option would not be in play. Which kind of suggests that regardless of what happens, we will continue to borrow more money. So the real fallout from this will be what it has always been about – politics.
Today, I weighed in at 213.4lbs. It was expected that I’d go up a bit today, and likely tomorrow. But come Tuesday, we go to war against carbs to tear down my glucagon forcing it to use fatty acids for energy instead of glucose.