Georgia's U.S. Senate candidates should get serious about the deficit

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The primary season in Georgia ends July 22, and it can’t come soon enough.

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U.S. Rep. Jack Kingston, above, and David Perdue face each other in the July 22 runoff for U.S. Senate.  FILE/ASSOCIATED PRESS
FILE/ASSOCIATED PRESS
U.S. Rep. Jack Kingston, above, and David Perdue face each other in the July 22 runoff for U.S. Senate.

Because most Democratic candidates have been chosen, this runoff is a fight between Republicans. And because the more conservative Republican voters tend to turn out in higher numbers, each candidate tries mightily to be the most conservative.

IN THE SENATE RUNOFF between U.S. Rep. Jack Kingston and David Perdue, each properly emphasizes the need to tackle the federal deficit. Both candidates have taken nearly identical positions – cut taxes and cut spending.

This certainly is popular. We all like lower taxes, and if the spending cuts aren’t specified, we believe they won’t have an impact on us. There is one problem with this approach: It won’t work.

Virtually every nonpartisan study has shown that reducing the deficit requires increasing revenue and cutting spending. And the spending cuts won’t just involve faceless bureaucrats in Washington. We all will be affected.

Reductions in Social Security, Medicare and the military likely will be in the mix. Popular tax deductions will be eliminated. Tackling the deficit is hard work. One aspect of the Republican Senate candidates’ fiscal position is nonsensical. They have adopted the popular misconception from the political right that we can cut spending by refusing to raise the debt ceiling.

NO OTHER COUNTRY even has a debt ceiling. Former Reagan and Bush administration official Bruce Bartlett wrote that “the debt limit is nuts. It serves no useful purpose to allow members of Congress to vote for vast cuts in taxation and increases in spending and then tell the Treasury it is not permitted to sell bonds to cover the deficits Congress created.”

If we do not raise the debt ceiling when we run out of money, it will unleash a financial chaos that no one can predict accurately. The Treasury pays bills electronically when they come due, and does not have a prioritization system. America always has paid its bills, and didn’t plan for a system that would decide whom not to pay.

The shock to the economy of the sudden random loss of Social Security, military and civilian retirement checks, and millions of other payments would drive the country back into recession.

Proponents say it’s not necessary to pay all the bills, but that it’s enough to pay only the interest on the debt to avoid a federal default.

Unfortunately, the determination that the country is in default is made not by the politicians, but by the financial markets. When the markets say we are in default, they will demand higher interest on the debt. This will increase borrowing costs for the government and the general economy.

THE ANNUAL INTEREST on our debt is about $400 billion at today’s 2.4 percent average rate. It would be $1 trillion at the historical average of 6 percent. This is 75 percent of the $1.3 trillion we collect in personal income tax receipts. Paying this much interest will cause drastic spending cuts and increased taxes.

No one knows for certain how harshly the financial markets would treat a U.S. default, but the danger is too great to risk finding out.

Perdue attacks Kingston because he voted to raise the debt ceiling. As CEO of Dollar General, would Perdue have recommended to his board of directors that they default on their bonds? Not pay their employees or suppliers? Of course not.

And instead of proudly defending Kingston’s responsible votes to raise the debt ceiling, his supporters say that at times he voted against raising the ceiling. Does that mean he acted responsibly only part of the time?

VOTING TO DEFUND Obamacare is a harmless exercise in Republican frustration. It is an entirely different action to purposely cause the first federal default in American history. History would record this self-inflicted disaster as a blot on the Republican Party that would last for years.

Cutting spending is necessary, but it requires sacrifice and compromise, not a destructive gimmick.

In the general election
campaign, Georgia deserves a responsible discussion on how to balance federal revenues and spending.

We haven’t heard one yet.

(The writer is a retired U.S. Navy officer. He lives and writes in Savannah.)

Comments (5) Add comment
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seenitB4
87304
Points
seenitB4 07/20/14 - 06:57 am
4
1
Sick of the commercials

They both are driving me nuts with CONSTANT insane ads on tv...I flip channels every time one comes on...
Negative 99% of the time....when will they learn.

deestafford
27674
Points
deestafford 07/20/14 - 08:52 am
2
0
I have no idea where this fellow got his learning in economics..

I have no idea where this fellow got his learning in economics--maybe off the back of a cereal box.

First of all, every time taxes have been cut revenue to the government has increased. Anyone who doubts that can look up the data and it will be confirmed.

Next, no one is talking, except in scare mongering sessions by the left, to eliminate social security and the other programs. The proposals are to make changes on them for future recipients in a phased in, transition program.

I could refute just about every point he makes, but suffice it to say he is completely off the rails. If he was a Navy officer as his credentials indicate, I would not have wanted to be on a ship he was the navigation officer because the chances of it running aground would be significant.

jimmymac
39881
Points
jimmymac 07/20/14 - 09:11 am
0
0
DEBT
Unpublished

The best way to reduce the debt is to put people back to work. There's more people not working now than at any time since the second world war. You have people who quit looking for work and people who wouldn't take a job of any kind out there. Illegals are doing jobs Americans used to do but many now refuse to do manual labor. If a job doesn't pay what many think they deserve they just sit home and watch Jerry Springer and collect their government assistance. Force people off the dole and the treasury will reap the rewards. Obama was supposed to tackle the jobs problem but the only people getting work are the ones involved in shuttling him around the country for fund raisers.

Darby
25694
Points
Darby 07/20/14 - 12:54 pm
3
0
Yes Dee....

This guy's position is both loony and at the same time, falls neatly into place as Democrat/socialist mantra.

Reading between the lines, you get the message. The only thing that CAN NOT AND SHOULD NOT be cut is GOVERNMENT.

Continue to fund the crazies in DC at every level, cater to their every whim and things will work out just fine in the end.

"NO OTHER COUNTRY even has a debt ceiling."

.
I don't know that that is true, but if it is, it's simply just another play into OzBama's theme that THERE IS (Or should be...) NOTHING UNIQUE OR EXCEPTIONAL ABOUT AMERICA.

How many of those other countries can even approximate the economic success over the years that the United States can? (And please, no references to tiny little Scandinavian countries.) (That's like comparing a mom & pop daycare center to General Motors.)

(The writer appears to want us to follow in the footsteps of every failed economy on the planet.)

There is certainly one thing that no other country in the world seems to be doing that WE SHOULD! That would be to put a strangle hold on the runaway spending by our "leaders".

To do that though, the voters and citizens of this nation need to assume some responsibility for their own well being.

And what's with......"History would record this self-inflicted disaster as a blot on the Republican Party that would last for years."

.
So, any attempt to rein in the extravagances of OzBama's "HealthCare" orgy would be a disaster. Okay - Now I get it. I see your message now.

Why didn't you say so, Ed....??,

"Vote Democrat, for a Better America". "We need more leadership of the Obamaesque variety".

It's worked SO WELL now for the last six years. Right?????

Ignore that iceberg, ensign. All ahead, full....

southernguy08
499
Points
southernguy08 07/20/14 - 06:49 pm
1
0
More revenue to decrease deficit
Unpublished

First, Mr. Conant, thank you for your service. Second, you make some good points. The biggest problem I have with your argument is that our history shows more revenue for our government usually mean bigger and bigger programs to spend such funds. The problem isn't solved, it usually means we go deeper into debt. And with a IRS that is corrupt, arrogant, and obviously VERY biased, most Americans have no faith that our government can handle our money responsibly. Without a BALANCED BUDGET AMENDMENT passed, congress will NEVER stop spending to buy votes, regardless of which party is in power. Their attitude is, "Let the guy coming after I leave office deal with the deficit." Sad but true.

corgimom
32501
Points
corgimom 07/20/14 - 09:31 pm
0
2
Dee Stafford, history has

Dee Stafford, history has proven that "lower taxes and increased revenues will result" theory is wrong.

http://rricketts.ba.ttu.edu/Tax%20Rates%20and%20Revenues.htm

corgimom
32501
Points
corgimom 07/20/14 - 09:33 pm
0
2
If you want to lower your

If you want to lower your debt, does a cut in pay help you or hurt you?

Ultimately, every dollar the government spends comes from taxes, in one form or another. They can borrow temporarily, but sooner or later, it must be paid back from taxes.

It's like a person taking out a mortgage or using a credit card. You can get a loan, but sooner or later, you have to pay it back.

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