Video: ReasonTV on the Debt Ceiling

cross-posted from the Pennsylvania Tenth Amendment Center

Until the debt ceiling was established in 1917, congress had to separately approve every new debt that the government took on.  The debt ceiling was established to make it faster and easier for the treasury department to borrow money during WWI.   Predictably, the war ended, but the treasury department’s expanded power didn’t.  When peace time came, the congress never reclaimed it’s Constitutional role for managing the U.S. debt.

Now, 94 years and 14 trillion dollars later, we’re periodically treated to this theatrical performance where the party in power threatens catastrophe if the debt ceiling isn’t raised and the minority party claims the mantle of fiscal responsibility in order to score political points for the next election.

This year, the Republicans get their turn claiming to be the thrifty ones, but it wasn’t that way five years ago.  In 2006, Senate Majority leader Harry Reid said,

How can the Republican majority in this Congress explain to their constituents that trillions of dollars in new debt is good for our economy?  How can they explain that they think it’s fair to force our children, our grandchildren, our great grandchildren to finance this debt through higher taxes.  That’s what it will have to be.  Why is it right to increase our nation’s dependence on foreign creditors?

After the 2006 elections, in her iconic “One Hundred Hours” essay in the Huffington Post, house Democrat Speaker to-be, Nancy Pelosi wrote,


Stealing Haslam’s Money

cross-posted from the Tennessee Tenth Amendment Center

You are stealing Governor Bill Haslam’s money. And he’s not happy about it.  In fact, he’s downright upset about it.  After all, how can any self-respecting Tennessean be so selfish as to try to hold on to more than their fair share of the money the benevolent state and federal governments allow them to keep from their labors.

It’s a national tragedy that’s playing out in states all across the country.  In every state of the union, citizens are trying to keep too much money.  After all, it’s not even your money.  What you don’t understand is that all money belongs to the government.  See, this is how it really works:  you work hard at your job to earn money for the government, and because the government is so nice they actually designate a portion of it for you to keep.  Isn’t that great?

But it doesn’t stop there.  Then the state government has to take its cut.  Because Tennessee doesn’t have an income tax (thank heavens!), we have to pay sales tax.

According to Governor Haslam the state of Tennessee is losing between $300 and $500 million because of untaxed internet sales.

Did you get that?  Haslam thinks the money in your pocket belongs to the state of Tennessee.  The state of Tennessee isn’t LOSING anything.  It’s YOUR money!  You get to decide how to spend it, not him.


Ron Paul: Debt Ceiling Drama

by Ron Paul

The debt ceiling debate is providing plenty of opportunity for political theater in Washington. Proponents of raising the debt ceiling are throwing around the usual scare tactics and misinformation in order to intimidate opponents into accepting more debt and taxes. It is important to distinguish the truth from the propaganda.

First of all, politicians need to understand that without real change default is inevitable. In fact, default happens every day through monetary policy tricks. Every time the Federal Reserve engages in more quantitative easing and devalues the dollar, it is defaulting on the American people by eroding their purchasing power and inflating their savings away. The dollar has lost nearly 50% of its value against gold since 2008. The Fed claims inflation is 2% or less over the past few years; however economists who compile alternate data show a 9% inflation rate if calculated more traditionally. Alarmingly, the administration is talking about changing the methodology of the CPI calculation yet again to hide the damage of the government’s policies. Changing the CPI will also enable the government to avoid giving seniors a COLA (cost of living adjustment) on their social security checks, and raise taxes via the hidden means of “bracket creep.” This is a default. Just because it is a default on the people and not the banks and foreign holders of our debt does not mean it doesn’t count.