111 K Street NE
Washington, DC 20002
- Toll Free 1.888.564.6273
- Local 202.783.3870
Democracy and Power: 104 Future Debt Burden
A government debt is a government claim against personal income and private property – an unpaid tax bill. – Hans F. Sennholz,
All democracies institute programs for current voters and shift the debt to future workers, even the unborn. Social Security, Medicare, prescriptions drug benefits for seniors are prime examples in America.
Obama opposes spending cuts right up to the time he calls them historic.
The Wall Street Journal praises the Republicans for cutting spending. Indirectly, the WSJ honored the Tea Party. Without the spontaneous outcry against the politically caused debt, the politicians in DC would not have agreed to $39 billion in budget cuts. Remember, two months earlier, President Obama’s budget called for more spending.
Dramatically, the Tea Party has changed politics in America. Scott Rasmussen and Doug Schoen wrote in Mad as Hell that the Tea Party rebellion was as strong as either the Democrat or Republican parties. Additionally, Rasmussen finds Americans want personal freedom: "voters don't want to be governed from the left, the right, or even the center. They want someone in Washington who understands that the American people want to govern themselves."
For Americans to achieve self-governance, new structural limitations restricting governments’ power must be installed. The Wall Street Journal proposes some limitations:
Far better (than a Balanced Budget Amendment) would be statutory limits on spending increases and debt as a share of GDP, sequesters that automatically cut spending if Congress exceeds those limits, supermajority rules for replacing those limits, and revisions of the budget baseline so that each year's budget begins at last year's spending levels, not with automatic increases.
Better yet, would be a Constitutional amendment on a debt limit as a percentage of the infinite-horizon fiscal gap, as developed by Laurence Kotlikoff of Boston University. The fiscal gap is on all projected debt – to infinitive- against reasonable tax collection assumptions. The fiscal gap is the only true measure of debt because politicians, by language and labeling, regularly distort the real debt. See: When Pretending Fails to Hide Bankruptcy.
For democracy to survive and flourish, responsible governance is essential. The infinite-horizon fiscal gap will control labeling fraud. Additionally, a Constitutional amendment establishing an 18% spending limit to GDP will halt the detestable and dangerous debt creation by all politicians – Democrats and Republicans alike.
Alas there must be an enforcement mechanism. A politician, voting to exceed the fiscal gap limit, should be personally liable for the amount of the debt. In reality, a politician voting to exceed the debt would lose their personal fortunes. Only when monetarily forced to respect a limitation will politicians be responsible.
Only an indestructible spending limit will assure a fiscally sound government and advance democracy and self-government in America.