February 4th, 2010—Americans for Limited Government President Bill Wilson today condemned the U.S. House of Representatives for voting to increase the national debt ceiling by nearly $2 trillion, saying “the American people are under absolutely no obligation to borrow yet more money to pay for Congress’ unsustainable level of spending that threatens the nation with true default.”
“The obscenity of this vote is nearly limitless,” Wilson said, adding, “This is the equivalent of requesting a credit limit increase on a son or daughter’s MasterCard to help pay interest — not even pay down the principal — on the family Visa card that is maxed out.”
“No family could sustain itself in such a manner, nor can any nation which robs from future generations to purchase temporary, illusory prosperity,” Wilson explained. “It is both immoral and profoundly foolish.”
The final vote in favor of the debt increase was 217 to 212.
“The House has once again voted to kick the can down the road instead of bringing the nation’s finances into proper order,” Wilson said, adding, “The House has now voted to permanently shackle the American people to a mountain of debt that cannot be paid back, further pushing the nation along the road to financial Armageddon.”
Moody’s has warned that the United States’ Triple-A debt rating could be in jeopardy “if the current upward trend in government debt were to continue and become irreversible.”
Barack Obama’s proposed 10-year budget will add $10.6 trillion to the national debt, totaling in $25.77 trillion in total debt come 2020. That averages $1.06 trillion every year added to the nation’s debt.
As a result, the nation’s Triple-A debt rating “could come under downward pressure,” according to Steven A. Hess, senior credit officer at Moody’s.
This legislation, H.J. Res. 45, will increase the national debt ceiling by $1.9 trillion to $14.294 trillion when signed by Barack Obama. House Democrats have said that a failure to pass the debt increase would result in “default.”
Wilson earlier today said that was “inaccurate.”
“If this bill had failed, the U.S. would not have failed to pay interest on its debt obligations nor to make debt payments,” Wilson explained. “Therefore, the nation was not going to default, unless House Democrats are stipulating that the U.S. actually needs to borrow more money simply to make national debt payments.
“What would have happened if the vote failed is the U.S. would not have been able to borrow any more money for so-called ‘mandatory’ spending,” Wilson added.
Wilson said that the U.S. was at “considerable risk of default,” not from any failure to increase the debt ceiling, but from Congressional “refusal to restrain current exorbitant spending.”
“Default will only result because we have increased borrowing to unsustainable levels, which is what increasing the debt ceiling by nearly $2 trillion represents,” Wilson said, noting that in Barack Obama’s proposed 2011 budget, interest paid on the national debt is $251 billion, or 9.7 percent of total projected revenue.
“By 2020,” Wilson said, “interest owed on the national debt will more than triple to an unprecedented, unsustainable $840 billion annual cost, or 17.8 percent of total revenue.”
“After that, it gets even worse,” Wilson warned, predicting that eventually, “simply paying interest on the debt owed will overtake the national budget, to say nothing of ever being able to pay down the principal owed.”
The previous national debt limit was currently $12.394 trillion, and that limit was set to be reached by the end of February.
Wilson noted that the debt increase was tied to so-called “Pay-Go” rules, requiring either tax increases or spending cuts to pay for any increases in spending. “Since approximately 56.4 percent, or $2.165 trillion, of the 2011 proposed budget is so-called ‘mandatory spending,’ and ‘mandatory spending’ will increase by $1.219 trillion to $3.384 trillion in 2020 under Obama’s plan, House Democrats have precluded the possibility of ever cutting entitlement spending.”
Wilson explained, “Meaning, the House has just voted to increase taxes by at least $1.219 trillion over the next ten years to pay for the unsustainable increases in entitlement spending that will occur every year.”
Wilson earlier said there was an alternative: “The only solution to the nation’s financial Apocalypse, where Moody’s is preparing to downgrade our Triple-A debt rating, is to reduce spending, not to borrow more money.”
“Instead,” Wilson concluded, “the House chose to bankrupt the nation.”