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Assault on America, Day 495: Time to hit brakes on federal spending and worry about tomorrow

States Bankruptcy
After the fact, some lawmakers are concerned about the exploding national debt


Now you’re worried about it?”

We’ve all been in situations where we’ve acted on spur of the moment impulses to deal with a perceived crisis situation and regretted the hastily derived solution almost instantaneously. Like using a firehose to douse a wastebasket fire and everything around it which ends up causing tens of thousands of dollars in water damage when, if you’d paused to think about it at the time, you could’ve alleviated the trouble simply by carrying the can -- and the fire -- outside and tossing it in the backyard pool.

Or swatting a mosquito on your arm with the souvenir bat you just purchased at the ballgame. Or removing a stain on the wall with paint thinner (in the can by the ladder) instead of going into the kitchen for a paper towel and a dab of soap and water. Or losing your willpower in a car dealership and agreeing to buy a ten-year extended warranty and then remembering you were planning to sell the car next year. Or imposing universal across-the-board lockdown measures when a high percentage of the counties in your state didn’t have a single death due to coronavirus.

The last one actually happened and we’ve all suffered to a degree with ill-considered knee-jerk reactions of (primarily blue state) governors wielding newfound powers like Arnold Schwarzenegger’s sword in “Conan the Barbarian.”

Some congressmen and senators are experiencing a similar feeling of helplessness these days, having lent their votes to rashly contrived “emergency” measures that weren’t thoroughly thought through, spending that’s run up the federal budget deficit to epic proportions and ballooned the national debt to numbers thought unfathomable just a decade ago.

A contingent of Republicans are coming down from their post-virus “high” and have developed a tangible case of buyer’s remorse. Nihal Krishan reported at The Washington Examiner last week, “After joining with Democrats to rush trillions out the door to counteract the effects of the pandemic, some Republicans are now saying that they are back to worrying about deficits — most prominently, Senate Majority Leader Mitch McConnell. ‘We haven't had much discussion about adding $2.7 trillion to the national debt, and the way that could indeed also threaten the future of the country,’ the Kentucky Republican said in a recent radio appearance.

“Democrats disagree and are seeking an additional $1 trillion in relief aid for state and local governments.

“McConnell, though, has said he only wants the federal government to help states with ‘expenses that are directly related to the coronavirus outbreak,’ not wanting to help them ‘fix age-old problems that they haven't had the courage to fix in the past,’ such as shoring up troubled pension funds. McConnell has even expressed an openness to allowing states to go bankrupt instead of giving them federal relief, a controversial opinion that received pushback from some Republicans.”

It should be noted other Republicans have spoken out in favor of the spending melee as necessary to combat the immediate health threat of the coronavirus and the unparalleled business closures and lockdowns ordered across the country by politicians from both parties. By its very definition, an “emergency” isn’t something that is foreseeable or capable of in-depth planning in advance. But if lawmakers are feeling regrets now, it’s a little late considering the horse has already left the barn and is running unhindered on an open prairie with no fence.

Democrats -- and a good many Republicans -- are tossing out new numbers on additional aid packages that would purportedly keep people afloat a little longer. Meanwhile, many states are easing restrictions and gradually allowing businesses to reopen in an attempt to keep others above the surface as well. It all presents an aura of desperation along with an eerie feeling that we’ll never feel “normal” again no matter how many trillions are dumped into the economy by the Federal Reserve.

Liberal politicians don’t seem the least bit bothered by the prospect of piling more numbers onto the top of the national debt. The way they’re spending is akin to a child’s understanding of the local bank. When I used to try and explain the need to save money wherever possible to my kids, they’d answer with, “No problem, daddy, if we run out of money we can get more out of the ATM machine.”

As I argued last week, having the federal government act as backstop to state entities is a hugely irresponsible idea. Everyone understands the closure orders have had disparate impact on major cities (almost exclusively in blue states) but that’s no reason to blow the door off the federal safe and allow liberal mayors and governors to get their grubby little hands on bags full of cash. At the very least, state and local authorities should have to justify federal assistance with real needs. As with everything else, how is it otherwise possible to keep track of every demand?

Democrats don’t seem to want to bother with the types of accountability that are essential here. And while Mitch McConnell will never be recognized as a tremendous champion of fiscal discipline, he’s at least standing up now -- when it counts. The last thing we should be doing is willy-nilly appropriating grants without conditions attached. Such a move would only encourage more rashness and disregard for future consequences.

Or, using our analogy, if you can put out the fire by carrying the trash receptacle outside, why ruin the inside of the house with hundreds of gallons of destructive wet stuff?

McConnell’s suggestion that states simply declare bankruptcy and restructure their debt is worth thinking about, which helps explain why Democrats hate it so much. By its very nature, bankruptcy forces debtors to examine every liability and renegotiate a payoff rate with creditors that’s feasible and workable for all involved. For those owed money, they’re assured of getting at least something in the “bargain” while the burden is lessened for the party in debt. If this were to take place, the enormous blue state public employee pension schemes and plans would face big problems -- because Uncle Sam wouldn’t wholesale cover for decades of poor fiscal choices and promises that couldn’t possibly be honored without budget busting sacrifices.

Politicians who devised the retirement plans in the first place couldn’t care less about fiscal responsibility. It’s the ultimate buy now/pay later pyramid scheme that went bad somewhere along the line. They didn’t exactly bet it all on red or black on a casino’s roulette wheel, but the figures didn’t add up when they concocted them. And it’s coming back to haunt them now.

The arguments in favor of bankruptcy are many, but the most obvious one is citizens in states with responsible fiscal management shouldn’t be on the hook for bailouts of those with liberal politicians who pay off union bosses and lobbyists at taxpayers’ expense (in exchange for votes, of course). If Democrats need a visual, how about the old Aesop fable of the ant and the grasshopper? The industrious ant saved his food supply while the lazy grasshopper took advantage of the good times and ate everything in sight.

In the end, the ant lived while the grasshopper died of cold (exposure?) and starvation. There’s no reason why red state “ants” should subsidize the gluttonous greed of the blue state grasshoppers. Not all states are the same and the famous “laboratories of democracy” invariably include some experiments gone horribly wrong. From here on out, everyone’s going to talk about what can be done better the next time around. Bankruptcy might lead the discussion.

Congress and the president should address the needs, not take advantage of them

President Trump isn’t completely immune from a discussion on spending disease since he’s consistently advocated for a buy-everything strategy that simply won’t work in these times -- or any others. Trump and many establishment Republicans subscribe to the school of thought that debt doesn’t matter and can always be leveraged in the future to obtain benefits now. I once had an Economics professor who argued the size of the national debt wasn’t an issue because we’re essentially borrowing from ourselves.

Well, if that were the case, then why would states need to be bailed out to cover their pension obligations? Can’t they go to their former employee recipients and explain that “we only borrowed from ourselves” and not to expect any more checks in the mail?

The president has suggested the next “phase” of relief include trillions for infrastructure and that he'll address the debt problem in his second term if he’s reelected. We should take Trump at his word -- that he’ll examine the spending dilemma in the coming four years -- but the totals must not be allowed to grow so large that any kind of reasonable solution would be impossible. And bankruptcy wouldn’t be feasible for the federal government; you can’t tell social security recipients, “Gee, I’m sorry that we spent all the money you sent us all those years. We’re cutting your benefits by 60 percent.”

Social security isn’t a pension. The system was supposed to sustain itself before politicians picked it apart and abused it.

If additional funds are required to fight the coronavirus pandemic, Congress should send them. And not one additional dime for anything that’s not related to the economic plague of the past few months. Let’s not do something in the heat of the crisis then regret it when the “All Clear!” is announced. That would be bad.

Democrats are anxious to use the coronavirus crisis because they’re unsure of Grampa Joe Biden’s viability

No one can say for sure what’s going on behind closed doors at the Biden campaign, but they must be scared to death that Tara Reade is weakening their already rickety foundation. David Sherfinski reported at The Washington Times, “More than a quarter of Democrats who were shown former Vice President Joseph R. Biden’s recent denial that he sexually assaulted a former staffer want someone else to be the party’s presidential nominee, according to a survey released [last week].

“Twenty-six percent of Democratic voters who were shown a 35-second video clip of Mr. Biden’s unequivocal denial that he sexually assaulted Tara Reade, a former Senate staffer, want the apparent nominee to be replaced by someone else, according to the Morning Consult poll. More than six in 10 voters said Democrats should stick with Mr. Biden.

“Forty percent of Democrats under the age of 45 said the party should pick a different nominee, compared to 15% of people ages 45 and older.”

It's yet another sign that the party’s young voter constituency isn’t activated by Grampa Joe’s spiel. When you add “handsy old sexual assaulting pervert” to the already long list of Biden turn-offs to the hipster crowd, it’s become increasingly obvious that Democrats are enduring their own instance of buyer’s remorse.

How many Democrats wish they could go back in time a few months and perhaps choose one of the “safer” candidates to carry their banner? Senator Amy Klobuchar may be boring and annoying, but she’s looking awfully appealing when pitted against the rapidly fading prospects of doddering Joe Biden.

Republicans and conservatives are watching the freefall with amusement, but in these strangest of all strange political times, there’s no time to get complacent. Now more than ever we need a calming voice before the storm reaches its apex. Trump is the one to do it, but he must keep in mind that fiscal conservatives -- and their enthusiasm -- counts too.

With the health threat from the coronavirus winding down in the individual states, it’s time to carefully consider the next steps and not sustain the out-of-control federal spending of the past three months. A fiscal emergency can be just as urgent as a disease pandemic, but moves made now will heavily impact the future.

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