Debt Ceiling and Moody's: This Blog Ahead of the Curve Again

Moody's is a debt rating agency. Maybe somebody at Moody's reads this blog. Months ago, I told you that the logic of the establishment--including Obama and almost all establishment Democrats and Repubicnans--suggests that the debt ceilig is MEANINGLESS. If we HAVE to raise the debt ceiling, as the establishment always says, then what good is the debt ceiling? This bog asked that question. Now Moddy's (part of the establishment) is proposing this as the "solution" to the deb ceiling "crisis" (as distingushed from the defict/debt crisis, which Mody's does not propose to help "solve".). Yep. Moody's is advocating eliminating the continual "uncertaint" by doing away with the debt ceiling altogethr!!!


Just how good is this blog? I ANTICIPATED theMoody's idea, and also provided the SOLUTION which does not require doing away with the debt ceiling idea first enacted into law in 1917. We have DELIBERATELY made the debt ceiling pretty much meaningless, but it does not have to be.


What we have done is DIVORCE the debt ceiling from the SPENDING that creates a violation of the debt ceiling. We need to tie them back together. The debt ceiling has been raised 100 times. Moody's is using this to suggest that it is meaningless. It suggests to me that it should be a YEARLY event, tied to the budget and appropriations process. I head a cable TV report--the same one that said the debt ceiling was first enacted in 1917--say that the law required the debt ceiling be adjusted "every year". This may have been loose talk, and there may not have been a direct link between the debt ceiling and the yearly appropriations process, but tTERESHOULD HAVE BEEN, and THERE SHOULD BE.


What this means is that the debt ceiling law shold be amended to REQUIRE that Congress produce a yearly budget that estimates the amount the budget will require the debt ceiling to be raised. That same amendment to the debt ceiling law will REQUIRE that the debt ceiling NOT be raised until every appropriations bill has been passed. But it will also REQUIRE that Congress declare, at the end of te parropriations process, how much the approved spending will likely REQUIRE the debt ceiling to be raised, and to what amount, AND that Congress raise the debt ceiling to that level to cover the spending that Congress has just approved. Amd leep doing this year after year, always keying the debt ceeiling TRANSPARENTLY to the budget and appropriations process.


Notice how this SOLVES llthe Moody's problem on 'certainty". The debt ceiling will always HAVE to be raised to cover each year's approved spending. But it will still be MEANINGFUL, because every menmber of Congress voting for a budget, and for spending bills, will have to acknowledge EXACTLY (within reason) how much that person has contriubed to RAISING OUR DEBT. That will put on more pressure than the debt ceiling preently does to control spending, because members of Congress will have to be ACCOUNTABLE for their contributions to the nation's debt.


What if Congress does not pass a budget, as Democratws apparently never intend to do? Well, I have NO sympathy for Congress and the government not passing theappropriations bislls on tieme. That is a non-roblem because every member of Congress who participates in that farce should lose hi or her job. The debt ceiling law will FORCE the appropriations bills to be done, and that is a GOOD thing The debt ceiling law should put TEETH in the budget process, which would be another benefit. IF a budget was still not passed, each Congrsssional branch would still be required to estimate--EFORE votnig on AnY appropriatioins bill--the amount that total appropriations are expected to raise the debt, and therefor e the debt ceiling at the end of the appropriations process. The debt ceiling law should PROHIBIT more lthan a 10% error in that estimate, or Cohngress will ahve to revise the appropriations bils to stay within the estimate (margin of error taken into account), BEFORE any raisein the previous debtg ceiling. Again, this process will take place EVERY year, as part of the budget and appropriations process. Others may be able to come up with a more elegant debt ceiling bill enbodying these concepts, but the concept is osund. The debut ceililing should be KEYED to spending, and each Congress shoudl ahve to FACE the amount that its spending will require the debt ceiling to be raised.


Nope. It does NOT make any sense to pass spending bills that require the debt ceiling to be raised, and then refuse to raise the debt ceiling. That is simply sihonesty on the part of our politicians (as it was with Senator Obama). At the same time, Congress SHOULD have to address the debt ceiling in a way that acknowledges exactly how much each year's spending is adding to the debt. And Congress should still have to VOTE on that debt ceiling increase, to publicly acknowledge that they are taking repsonsibility for the spending that they have approved. Any person in Congress who votes FOR a budget, and spending bills, then will have to explain how he or she could vote AGAINST raising the debt ceiling.


If you don't do osomehting like what I propose, there is no way to make the debt ceiling meaningful. No, the preent fight is simply USING the debt ceiling to fight a SHAM battle on "spending". If the debt ceiling is directly keyed to spending, then it will be impossible to do a SHAM (well, hard anyway, as politicians are dishonest creatures at heart).


P.S. No proofreading or spell checking (bad eyesight).