Does Your Family Have An Appropriate Debt Limit?

Families, communities, and nations are stronger when they maintain appropriate debt limits. Families and communities have more difficulties raising their debt ceilings than the federal government. The federal government is the only organization of the three listed that can print its own money. However, families, communities, and nations all have big problems when they spend more money than they earn.

In his article at The Deseret News, Jay Evensen compared individual families with the current struggle between the White House and the House of Representatives to settle on an appropriate debt ceiling. 

Each of us has a debt ceiling, set mainly by the bank-imposed limits on our credit cards or the things we can use as collateral. But there are many more ways to borrow money, from bank loans to home equity lines of credit to applying for even more credit cards or calling to ask for a higher limit.

And we’re doing all of that, apparently.

While we’re sitting at home passing judgment on profligate politicians in Washington, the Federal Reserve Bank of New York’s Center for Microeconomic Data has released its latest report on total household debt for the first quarter of the year. The news isn’t good….

But, getting back to household debt, the New York Fed says this was the only time in the 20-year history of this report that debt has not dropped during the first quarter as compared to the last quarter of the previous year. Americans tend to overspend for the holidays, then pay off a good portion of that after the New Year. Not this time.

Total household debt now stands at $17.05 trillion, which is $148 billion more than the previous quarter and $2.9 trillion more than at the end of 2019.

Inflation is, of course, the prime suspect. Reports say we’re getting pay raises, but they aren’t big enough. Civilian workers got about 5.1% more on average last year, but inflation was 6.5% for the year, with food up by 10.4%, according to the Bureau of Labor Statistics.

To make up the difference, we’re putting more everyday stuff on credit, which is a really unwise thing to do. That’s especially true considering Bankrate.com reports the average credit card interest rate was 20.3% as of May 10.

Some people have little choice. They can’t afford to eat or drive without a credit card, if they’re lucky enough to have one. Lower income brackets always get whipsawed the most by economic troubles, left with few choices or strategies. They deserve the most consideration, but rarely get it.

But for the rest of us, it looks as if we’re not having many debt ceiling discussions at the kitchen table.

Inflation in the United States is way too high, and it causes rising costs in all categories. It also affects retirement accounts, which are losing thousands of dollars. The reality is that there may be a deep recession or even a depression in the near future.

Wise families will hold debt ceiling talks to decide where they can save money and pay down debt. A family that has no debt can sleep better at night and feel more peace during waking hours. Debt-free families strengthen their communities and states, and debt-free communities and states strengthen nations.

What Is the Limit, Save, Grow Act of 2023?

The U.S. House of Representatives voted today to pass the Limit, Save, Grow Act of 2023, which will raise America’s debt ceiling. The vote was 217-215 with four Republicans and all the Democrats voting against it. When House Speaker Kevin McCarthy introduced the legislation on April 19, he claimed that it would “limit federal spending, save taxpayer dollars,” and “grow the economy.” Time will tell if the bill fulfills its destiny. 

President Joe Biden threatened to veto the bill. However, the passage of the bill by the House puts the ball in the Senate’s court, and Chuck Schumer will be forced to do something about it.

The press release states: “House Republicans are committed to a sensible debt ceiling solution that will strengthen the American economy, protect American families, and save taxpayers over $4.5 trillion over the next 10 years.” The $4.5 trillion is only a drop in the bucket compared to the $31 trillion debt – more than the entire economy of the United States.

The debt is unsustainable, and the Republicans are trying to do something about it. All at the same time as making the U.S. “less dependent on Communist China,” curbing inflation, and “protecting Social Security and Medicare benefits for seniors.” Here is the plan: 

1) Limit Federal Spending:

·         End the Era of Reckless Washington Spending

Reckless Washington spending has caused record inflation, rising interest rates, supply chain shortages, and instability in the banking system. Our plan would establish spending levels for FY24 at FY22 levels – where the government was operating just 4 short months ago – and allow for 1% annual growth over the next 10 years.

·         SAVINGS: Approximately $3.6 trillion

 

2) Save Taxpayer Dollars:

·         Reclaim Unspent COVID Funds

§  Thanks to House Republicans, the pandemic is now officially over. If so-called “COVID” funding has sat dormant for over two years, clearly it no longer needs to be spent and should be rescinded without delay.

§  SAVINGS: Approximately $50-60 billion

 

·         Defund Biden’s IRS Army

§  As House Republicans did on Day 1 of our majority, we will fight for hard-working Americans by eliminating funding for the 87,000 new IRS agents charged with shaking down families and small businesses.

§  SAVINGS: Approximately $71 billion

 

·         Repeal “Green New Deal” Tax Credits

§  President Biden’s uncapped green energy tax credits and subsidies represent a massive corporate giveaway – including for wealthy Americans who can already afford expensive electric vehicles – that will distort the market and cause energy and utility prices to soar for everyday consumers.

§  SAVINGS: Approximately $271 billion - $1.2 trillion

 

·         Prohibit Biden’s Student Loan Giveaway to the Wealthy

§  President Biden’s egregious executive action would direct 70% of the benefit to those in the top half of the income spectrum – while forcing the 87% of adults without student loans to pay for the 13% who do.

§  SAVINGS: Approximately $465 billion

 

3) Grow the Economy

·         Strengthen the Workforce and Reduce Childhood Poverty

§  Right now, there are more job openings than people looking for work, in part because the Biden Administration has weakened some of the very work requirements that then-Senator Biden previously supported. By restoring these commonsense measures to assistance programs, we can help more Americans earn a paycheck, learn new skills, and reduce childhood poverty.

§  SAVINGS: Approximately $10-$120 billion

 

·         Prevent Executive Overreach and Restore Article I

§  The REINS Act would help Congress block efforts by Presidents of both parties to spend money outside of the normal process and impose massive new costs on the American people, which President Biden has abused to the tune of $1.5 trillion in unilateral executive actions.

 

·         Lower Energy Costs and Utilities

§  House Republicans’ H.R. 1 would unleash reliable, cleaner American-made energy, tap our abundant natural resources, cut red tape for project permitting, reduce our dependence on China and foreign adversaries, and lower the cost of gas and utilities.

 

4) A Responsible Debt Limit Increase

·         In exchange for these pro-growth and cost-saving policies, the debt limit would be responsibly lifted through March 31, 2024, or by $1.5 trillion – whichever occurs sooner – and be transmitted to the ever-so-robust legislative agenda of the United States Senate.

 

There is the Republican plan for beginning the process of bringing the spending of the federal government under control. It is a ten-year plan, so nothing will happen overnight. However, it would be nice to live in a nation that was not indebted to its enemies! The press release contained other facts and figures that may be of interest to you. They put the responsibility for the fiscal condition of our nation squarely on the shoulders of Biden and House Democrats.