If McCarthy’s Concessions Enable The Next Debt Crisis—Bring It On!

Yes, 15 votes and the slings and arrows of MSM opprobrium were well worth it. That’s because the GOP’s anti-McCarthy insurrection obtained concessions which just might slow America’s headlong rush to fiscal armageddon. And just in the nick of time!

We are referring, of course, to the Speaker elect’s promise that there will be no more debt ceiling increases without off-setting spending cuts; and that in the event of a double-cross a single Member of the House may table a motion to vacate the Speaker’s chair.

Talk about a sword-of-Damocles!

Never has one been hung over a more deserving target with such meritorious exactitude.

Indeed, the proof that Congress has finally done something meaningful about the nation’s appalling fiscal process was tipped by the New York Times, which headlined the matter on Sunday as “McCarthy’s Deal For Gavel Raises Fears on Debt Limit”:

Economists, Wall Street and political observers are warning that the concessions he made to fiscal conservatives could make it very difficult for Mr. McCarthy to muster the votes to raise the debt limit.….That could prevent Congress for doing the basic tasks of keeping the government open, paying the country’s bills and avoiding default on trillions of dollars of debt.

Oh, for Pete’s sake!

As we amplify below, there is zero risk of a default in the absence of a debt ceiling increase, and, more importantly, Congress has NOT been doing the basic tasks of fiscal governance for decades.

It never passes a budget; it runs the government on CR’s and Omnibus Appropriations Abominations; and has put upwards of 90% of the budget on automatic pilot via entitlements, mandatory spending measures, the rapidly growing public debt service payments and the herd of sacred cows which feast in the green pastures on the Pentagon side of the Potomac.

The bottom line, therefore, has been evident for decades to anyone paying attention: Namely, that the Federal budget has become a doomsday machine that cranks forward on its own momentum with virtually no confirming action by the public’s elected Representatives and Senators—save for occasional pro forma passage of an 11th hour 4,400 page Omnibus appropriations bill that no one has read.

For want of doubt, here’s the long-term growth of government transfer payment entitlements benefits since 1954. These are self-evidently the heart of the nation’s fiscal doomsday machine.

Dollar outlays (yellow line) have grown by a staggering 290 times—from $16 billion in 1954 to $4.64 trillion in 2021.

And even when you make allowance for inflation and economic growth, the story is no less relentless. Back in the heyday of postwar prosperity (1954), America was booming and middle class living standards were rising rapidly. Yet these transfer payment entitlements cost just 4.0% of GDP (purple line).

Needless to say, that’s a tiny fraction of today’s entitlement spending at 20.0% of GDP. And this staggering fiscal burden sits atop a national economy that is barely creeping forward on a trend basis–even as virtually every single dime of these expenditures have been authorized in perpetuity.