Federal Borrowing Crosses the Rubicon
A year ago, Republicans in control of Congress suspended the cap on federal borrowing. The limit was automatically re-imposed on March 1st. Politicians now have a few months to hammer out legislation to raise the cap as the Treasury employs “extraordinary measures” to fend off default.
The federal deficit is mushrooming once again. The 2017 tax cuts have taken a bite out of receipts at the IRS and economic growth has not met expectations.
This year’s borrowing to fill the gap between government tax revenue and expenditures may reach a trillion dollars for the first time since 2012.
If Washington politicians follow the usual script, we can expect Republicans to posture as fiscal conservatives and then relent either just before or just after a federal shutdown.
Democrats will chastise the GOP for playing politics with America’s sacred responsibility to pay its bills.
This drama has played out dozens of times over recent decades and is therefore likely to repeat once more this fall.
Perhaps it won’t, though. The Associated Press notes that there just aren’t many people in the Capitol who even pretend to care anymore when it comes to deficits.
The AP quoted former senator Judd Gregg from New Hampshire on Sunday: “The president doesn’t care. The leadership of the Democratic Party doesn’t care.” He should also have included Republican leadership, including Senate Majority Leader Mitch McConnell, who have reliably supported metastasizing federal debt.
Meanwhile, the socialist Left has touted so-called “Modern Monetary Theory” (MMT) as the mechanism to fund the economy-killing Green New Deal and any and all other government boondoggles. At its core, MMT advocates for perpetual money printing to fund government spending.
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