"America is not a deadbeat nation!” “The United States pays its bills!”
“We must not let our country default. That would be catastrophic!”
In the past few weeks we’ve all heard each of these statements in the run-up to the looming date when the federal government will “run out of money.” I submit to you that currently America is a deadbeat nation and we do not “pay our bills.” If we did, we would not have nearly $32 trillion dollars of fiscal operating debt. Fiscal operating debt is the total federal revenue (since 1776) minus total federal spending (since 1776).
Think of it at the household level. If your annual income is $50,000 and you spend $75,000 that year, your fiscal operating debt for the year is $25,000. You spent or incurred expenses $25,000 greater than your income. So, if you do the same the following year, your total fiscal operating debt is $50,000. You can see from this progression that this is not a wise, long-term strategy.
To correct this trend, there are three possible solutions: increase income, decrease spending or do a combination of the two. The federal government increases its “income” from taxes and fees. It doesn’t produce anything, so its income is derived from taking a portion of our income, which is a taking of our private property. The federal government also increases the amount of money it spends by printing and borrowing. The ability to print currency is an ability the government has that we do not. And as for a meaningful reduction of spending, well, it’s rarely mentioned.
That ability to increase the money supply comes at a cost. Every one of us pays for this in the form of higher prices. For instance, a 32-ounce bottle of a popular sports drink I enjoy sold for $1 a couple years ago. Today, that same drink now comes in a 28-ounce bottle and costs $1.39. That’s a 12.5% decrease in the amount of product and a 39% increase in cost over a couple of years. Of course, there are numerous factors that determine the cost of goods and services, but the amount of money the federal government injects into the economy also is a major factor.
Much of this additional cost is a result of the government printing and borrowing money. A few data points help illustrate the accelerated growth of our national debt:
1980 - $930,000,000,000 ($930 billion)
1990 - $3,400,000,000,000 ($3.4 trillion)
2000 - $5,600,000,000,000 ($5.6 trillion)
2010 - $14,000,000,000,000 ($14 trillion)
2020 - $27,700,0000,000,000 ($27 trillion)
6/3/2023 9:34 a.m. central time - $31,824,638,870,665 ($31.8 trillion)
For simplicity, I’ve rounded these numbers and the last 6 digits of the current national debt is an approximation. But the National Debt Clock moves so quickly, what's a few hundred thousand dollars, right?
This brings us to the latest debt limit negotiation. First, let’s go back to late 2022. The Republican Party had narrowly won control of the US House of Representatives in the November election. According to the Constitution, all spending bills originate in the House. In fact, Congress has not passed an actual budget since 2015 and the government has been funded by a series of “continuing resolutions.”
On the table late last year there was a continuing resolution to fund the federal government through September 30, 2023. This resolution had passed the House, and the Senate could have pushed back and negotiated a temporary resolution to fund the government through April 15. That would have given the incoming Republican House majority an opportunity to guide the budget process. And yet, Sen. Mitch McConnell decided to work with the current Democratic majorities to pass a continuing resolution to fund the government until September 30, 2023. The result: the “power of the purse” was taken from the new House majority’s hands and caused the recent battle over the debt limit, which was projected to be reached early this summer.
Fast forward to last week. Speaker of the House Kevin McCarthy was negotiating an increase in the debt limit with the White House. The House already had passed the Limit, Save Grow Act of 2023 (HR2811), which increased the debt limit by $1.5 trillion. (Not exactly “chump change.”) HR2811 also contained provisions reclaiming unspent COVID funds. It eliminated funding for the 87,000 new IRS agents, canceled some of the Biden Administration’s student loans; money for “green energy” programs and included other spending cuts. It also contained the REINS Act, which stated that any new regulation coming from the Executive Branch costing over $100 million annually was subject to Congressional approval. (Note that the REINS Act had over 170 House co-sponsors).
All the while, HR2811 was sitting on Senate Majority Leader Chuck Schumer’s desk. I imagine he was sitting on this bill thinking the Republican leadership in Congress would cave. Well, he was correct. Speaker McCarthy negotiated against himself and struck a “deal” with the White House. This deal neutered the House spending cuts, and the ones that remain appear to be easily bypassed. The House and Senate then passed this bill with more Democrat than Republican support.
If you’ve read this far you might be asking, “What does this mean for Convention of States Action and what can I do?”
First, I want you to imagine a federal government we can afford. One that doesn’t rack up another trillion dollars in debt (like we have from 10/1/22 to 3/31/23) despite record federal revenues. Imagine a federal government that’s only involved in its Constitutionally given areas authority – the 17 enumerated powers listed in the Constitution. What do you think a government of that size would cost us taxpayers? I’m not sure of the answer, but I guarantee it would not cost $6 trillion a year.
Washington DC has proven once again it neither has the motivation nor the ability to control itself. The only constitutional and peaceful solution capable of reversing our course and putting DC back into its constitutional box is the convention of states process in Article V. The states stand in the breach between us and collapse. This is not hyperbole. The Congressional Budget Office, the Medicare and Medicaid Administrators, the Social Security Trustees all agree this level of spending is unsustainable.
Missouri is a passed state but our work is far from over. Our Commissioner Selection Bill failed to pass this year. Our Convention of States Team successfully fought off efforts to rescind our resolutions in three other states this year. We can expect a repeal attempt at some time in Missouri as well.
Grassroots growth and involvement continues to push us forward in Missouri. We are tasked with helping states that haven't passed our resolution. We are tasked with taking back School Boards, City Councils and other levels of government to restore our Founding Principles. The relationships we develop within our team, with legislators and with our fellow citizens who are losing hope, is what drives us forward. There is much to do. Get involved. Get active at https://conventionofstates.com/take_action.
In liberty,
Brett
Please bookmark the Missouri Information Page and share it with family and friends.
Past Blog Posts
Did you miss last week's blog post? No worries, we've got you covered!
Click here to access our archive and see the full history of the blog.
