Judd Gregg: Easier to add debt than choose
Judd Gregg, a former Republican senator from New Hampshire, served as chairman of the Senate Budget Committee from 2005 to 2007 and ranking member from 2007 to 2011. He recently wrote an op-ed featured in The Hill. It is reposted here.
The United States debt now stands at $18 trillion. This is double what it was just a few years ago. The trend, under the presently proposed budgets of President Obama, is that it will triple in another five to seven years.
People point facts like this out all the time. But the response from the president and the Congress is to add more spending that has not been paid for, thus increasing the debt problem.
The two most recent cases are the supposed ‘fix’ of the Department of Veterans Affairs and the highway bill.
The VA bill, which would expand services at a cost estimated by the Congressional Budget Office at about $50 billion over 10 years, came to the floor of the Senate via a tactical procedure.
The issue was declared an emergency so that a point of order under “pay-go” — the imperative to use existing funds, rather than borrowed money to cover spending — could not be made against it.
Then, just to increase the fiscal insult, the future spending under the bill was converted from annual appropriations to a mandated program, adding billions of unpaid spending to the debt. This act of “do nothing responsible” wizardry was confirmed by a 97-3 vote.
As if that were not enough, there will soon be an agreement on a Highway Trust fund bill.
A bridge here, a subway there and fairly soon you have enough votes to pass the bill.
A gas tax increase to pay for a trust fund that is otherwise going broke would, of course, be much preferable. But that might require tough votes. It is much easier to borrow from our kids’ futures to do this type of thing.
Some people complain that this is a do-nothing Congress, heading into a summer vacation.
One wishes it were so.
Unfortunately, it has been a Congress that has put its foot on the accelerator, with members seeking to pacify their politically-favored constituencies at every turn.
In doing so, it is driving up the debt at a rate that guarantees a fiscal crash for the next generation.
It is ironic: The only legislative action that Washington is able to muster these days is the spending of money we do not have to address issues no one wants to pay for. And this is done in a manner that allows many politicians, from the president to rank-and-file House members, to avoid the consequences of having lit the fuse of this fiscal bomb.
But we still have the Fed as our friend.
After having printed a couple of trillion dollars to relieve the pain of the debt, and float the economy and the equities market, there is the chance that it will not see inflation as an issue.
This will allow most of this new money to continue to slosh around the neighborhood, pushing off the pain of the president and Congress’s excess.
But what if the Fed does change course? What if its members do conclude that inflation, which is after all supposed to be their first concern, is a threat?
This is not going to happen.
In a world where almost all the important central banks are running their printing press on a 24/7 schedule, inflation becomes muted by the relative nature of this worldwide approach.
If everyone is making money (literally) then how can you get serious inflation? There is no benchmark currency or economy to compare against.
Of course, at some point the country or region that sees no significant productivity gains but is still printing money will find itself with no chair in this world game of circling inflation. But that will not be the United States.
Thus it is possible that all this debt mongering is just that.
Or maybe not. It is difficult to deny that apples fall from trees.
At some point, unsustainable debt falls on the heads of a government that has created it — and of the people who have elected that government.
"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the opinions of all members of the committee.