Declaration of Independence

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. - That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.

Thursday, May 25, 2023

Is the U.S. Nearing a Debt Cliff?

Daniel Horowitz has some strong words for Democrats and Republicans: Stop lying to the American people about possibly defaulting on our debt. He wrote that it is necessary for us to “understand the leverage, opportunities, and potential pitfalls in forging an agreement or in failing to forge such an agreement by a certain date” IF we are to “properly negotiate a path to fiscal sanity and avoid the inevitable long-term default.” 

Horowitz blamed both parties for “operating under a false assumption that there is a June 1 debt default cliff” if an agreement is not made. We will not be destroyed immediately, and Speaker Kevin McCarthy “needs to set the record straight immediately.” Horowitz continued with his reasoning.

Default on debt is not the same as a shutdown, slowdown, or rolling blackout of certain government agencies, functions, and programs. We have an obligation to pay our creditors. We have a strong need to pay for Social Security and Medicare. We have no obligation, however, to fund HUD, the EPA, Department of Education, Ukraine, or illegal aliens. There is enough money to pay the interest on the Treasuries, so there is no threat of default. Period. And for the most part, there is money for other critical functions for a while longer. Full stop with the default talk!

I expect that Horowitz knows a whole lot more about how the government works than I do. However, I know that any individual, family, company, or nation can prosper when they have more debt than income.

I agree with the Republicans in that we need to bring the spending under control. Besides stopping Biden from throwing money at every potential Democrat voter, we should decrease the size of the federal government.

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