Debt Ceiling Will Be Raised
by JBS President Emeritus John F. McManus
“If you give someone the power to inflate the currency, he will.” That bit of economic truth ranks alongside any indisputable fact – such as the sun will rise in the east tomorrow morning.
There’s another economic truism ranking just as high. It is: “Raising the national debt ceiling will soon be followed by a need to do so again.” In other words, refusal to address the problem of national indebtedness in the proper manner – reducing the size of bloated government – will assure that the problem will only invite more increases.
The federal government will reach its allowable indebtedness on September 29th. If congressional permission to exceed the amount of red ink currently allowed isn’t forthcoming prior to the September date, the U.S. government will then be in default, something no sane person wants. Failure to increase the debt ceiling will bring about an unwanted economic catastrophe. So we can expect Congress to pass an increase just as surely as we can expect today’s sun to set in the west.
Speaking at an event in his home state of Kentucky on August 21st, Senator Mitch McConnell, the Senate’s Majority Leader, announced, “There is zero chance – no chance – we will not raise the debt ceiling.” People in that audience were assured, therefore, that reckless government spending would increase. Sleep well, fellow Americans.
McConnell and practically all of his congressional colleagues in both the Senate and the House will tell anyone they have no choice, that it’s either more debt or default. It’s a classic case of simply ignoring truth. There is another alternative: Reduce the size and cost of government.
The federal government spends billions upon billions in an array of unconstitutional programs that never should have been started in the first place. Education is one. Others include unconstitutional wars, health care, housing, welfare, foreign aid, environment, and so on. Every one of these gigantic spending spigots have not only sped our nation into near insolvency, the efforts of each have made matters worse in each of the areas where their illegal and unconstitutional activity has become common. Educational quality has plummeted; federal housing projects have become death traps; the cost of medical care has risen and forecasts of its availability are unsettling to say the least.
Very few Americans are aware that the U.S. government already includes owing both China and Japan more than one trillion dollars. Lesser amounts, hardly inconsequential because they haven’t exceeded the trillion dollar threshold, are owed to other nations. The admitted national debt already tops $20 trillion, a figure that makes the U.S. the most heavily indebted nation in all of history.
Can debt holders such as China (that’s Communist China to be more specific) dictate U.S. policy? Has indebtedness watered down or even cancelled U.S. ability to act in our nation’s interests in the foreign policy arena? Have our own leaders given China, Japan, and other large debt holders an opportunity to dictate U.S. decision-making? The answers are yes.
Even worse, has U.S. indebtedness placed Uncle Sam’s neck in a noose controlled by the United Nations? The UN’s International Monetary Fund recently bailed out Greece and, in the process, required Greece to follow its dictates about how to run that once-independent nation. Is that where the U.S. is heading? God forbid that the necessity might arise when the UN would step in to bail out our nation.
Raising the debt ceiling is simply postponing a dire reckoning that will surely arrive. Reducing the size, power, and expense of unconstitutional government is the only sane policy. Only the American people can force leaders to act sanely. Will you help?
A good start would be to contact Congress to abolish the Federal Reserve. Then consider joining our effort to rein in the federal government!
Mr. McManus served in the U.S. Marine Corps in the late 1950s and joined the staff of The John Birch Society in August 1966. He has served various roles for the organization including Field Coordinator, Director of Public Affairs, and President. Mr. McManus has appeared on hundreds of radio and television programs and is also author of a number of educational DVDs and books. Now President Emeritus, he continues his involvement with the Society through public speaking and writing for this blog, the JBS Bulletin, and The New American.
Borrowing Paves the Way Toward Servitude
by JBS President John F. McManus
Chapter 22, Verse 7, of Holy Scripture’s Book of Proverbs tells us what our nation can expect because of heavy indebtedness and consequent borrowing. It says very bluntly, “… the borrower is servant to him that lendeth.”
We can’t be sure that any Russian official has read Holy Scripture. But it is certain that some Russians didn’t need the Good Book to figure out that a borrower puts himself in a subservient position.
In the wake of the Russian occupation of the Crimean Peninsula, officials in Washington issued stern warnings to the Russian government. One key threat stated by President Barack Obama informed Moscow that assets held by Russians in U.S. banks could be frozen if the takeover continued. His warning was supposed to scare Vladimir Putin and various Russian plutocrats into canceling the takeover. But Mr. Obama’s not only didn’t frighten any Russian official, it made some of them angry. The blustering out of Washington had a reverse effect that could imperil the U.S. far more than anything waved in front of Putin and his team. On March 17th, the U.S. President made good on his threat and ordered the freezing of some Russian assets. Russian officials reacted with laughter. Putin is placing his own sanctions on U.S. Senators.
Sergei Glazyev is a top advisor to Putin. On March 4th, according to a report published by the Russian news agency Novosti – and reported in the U.S. by Barron’s – Glazyev showed very clearly his belief that considerable leverage in this confrontation is held by his country, not by the United States. With the blessing of Vladimir Putin, he thundered:
We hold a decent amount of Treasury bonds – more than $200 billion – and if the United States dares to freeze accounts of Russian businesses and citizens, we can no longer view America as a reliable partner. We will encourage everybody to dump U.S. Treasury bonds, get rid of dollars as an unreliable currency, and leave the U.S. market.
Japan and China each hold far more U.S. Treasury bonds than does Russia. Looking at the amounts realistically, Russia’s $200 billion is almost pocket change compared to what these two Asian governments possess. Should the U.S. offend either of them, or should they follow the course laid out by Glazyev, or should either or both simply decide to pull the plug on the dollar, one or the other could dump their holdings and cause the dollar to resemble the worthless Zimbabwean currency of only a few years ago. According to Glazyev, Japan and China may indeed be prodded by Russia to do so.
Right now, the admitted U.S. national debt stands at approximately $17.5 trillion dollars. Much of it has been “serviced” by foreign purchases of U.S. bonds. Another large portion has resulted from the Federal Reserve creation of dollars out of thin air, new dollars to cover domestic deficits and to bail out shaky banks both here and overseas. Yet, deficit spending continues and the sacrosanct “independence” of the Fed remains unaudited and uncontrolled.
U.S. leaders have placed our country’s neck in a noose. Instead of working to extricate America from its predicament, a merry march toward insolvency and loss of sovereignty continues as if there will always be a lender. Congress recently passed legislation to allow the national debt to rise and, while at it, members didn’t even place a ceiling on how high it could go. Blame for this outrage should be directed at Republican leaders and most Democrats who arranged also to keep government debt much less of an issue during the 2014 election cycle.
Will American awaken in time to keep our country free of servitude to its lenders? Only God Himself knows for sure, but we can all be certain that what was stated in His Book of Proverbs can’t be denied.