Newspaper Page Text
www.starnewsga.com StarNews AUGUST 7, 2011 Page 13
DEB T CEILING from front page
didn’t do enough to tackle federal deficits,
while the Democrats who voted no decried
the package for gutting federal programs
that fund education and safety-net pro
grams for the poor and elderly.”
For months leading up to the passage of
this bill the day before the U.S, Treasury
claimed would be too late to avoid a finan
cial crisis, the news has been filled with
stories about the need to raise the ceiling
on how much money the Federal govern
ment can borrow. The Federal government
has to borrow money whenever it runs a
deficit by spending more than it collects
from such sources of revenue as the
Federal income tax. On its behalf, by issu
ing debt securities, the U.S. Treasury
Department borrows enough money to
cover the deficit.
The Treasury estimated that by August
3, 2011 its borrowing would reach the pre
vious, lower ceiling.
According to the Congressional
Research Service, by raising the debt ceil
ing by $2.4 trillion on August 2, 2011,
Congress raised it by more than it had ever
been raised. The previous record increase
in the debt ceiling also took place during
the presidency of Barack Obama. The U.S.
Treasury reports that the total debt of the
Federal government did not reach $2.4 tril
lion until November, 1987.
Commenting on the spending by the
United States on Monday, August 2, 2011,
Russian Prime Minister Vladimir Putin
said “They are living like parasites off the
global economy and their monopoly of the
Treasury securities account for a signifi
cant part of Russia’s reserves. Like some
other foreign officials, Putin believes that
the U.S. dollar should cease be the world’s
only reserve currency.
A ceiling on the size of the Federal gov
ernment’s debt has existed since 1939,
when it replaced Congress’ former method
of limiting the size of the government’s
debt by establishing a limit on the amount
of money that could be borrowed to
finance each individual use of money that
it authorized. As of June 30, 2011, the
Federal government’s debt was only $25
million below the statutory debt limit of
$14,294 trillion set on February 12, 2010.
This led many in Congress and President
Obama to demand that the ceiling be
raised. Its level had been increased 78
times since 1960. It was raisedl8 times
during the 8 years Ronald Reagan was
president. During the administration of
Republican George W, Bush, among the
Democrats opposing raising the ceiling on
debt were Senators Barack Obama and
Harry Reid.
Many of the comments you hear today
about government spending are far from
being new. On January 20, 1941, “Time”
magazine quoted an article in the “Washin
gton Post” entitled “Where is the
Sacrifice?” about President Franklin
Roosevelt’s budget. In this article the
“Post” pointed to the President’s failure to
cut non-defense expenditures. “This,” it
observed, “is a strange application of the
President’s thesis that sacrifices must be
made by everyone in the interests of
national security....He has recommended
only petty economies.” Republican
Senator Robert Taft of Ohio was quoted as
having said that “The deficit.. .threatens
the solvency of the U.S. The President still
believes in spending Government money
as if it were water.” Government spending
soon increased dramatically as a result of
war being declared on Japan on December
8, 1941 after its forces bombed Pearl
Harbor the day before.
Something that is new is what a
“budget cut” means. In Roosevelt’s day a
budget cut meant that there would be a
reduction in how much money would be
spent. Since 1974, when the Federal gov
ernment adopted baseline budgeting, that
may not be the case, and recently it has not
the case. This because, since 1974, the
Offic^)^ManagemenUin(Uh^3udgeUia^
projected future budgets into the future
based on past spending. Because in the
past spending increased, the projected
amount of spending constantly rises. As a
result, what the President, members of
Congress, and the news media today call a
proposed cut in the budget is not a reduc
tion in the amount of money that will be
spent. What is being cut is by how much
spending will be increased.
The Federal debt limited by the ceiling
is of two types. One is money that the
Federal government owes some part of
itself such as its Social Security Trust
Fund. In any year during which the money
raised by the Federal payroll tax exceeds
what is needed to pay Social Security
beneficiaries—primarily retirees—this sur-
See MORE page 26
William E. Brewer
Attorney
Family Law • Juvenile Law
Wills & Estates Litigation
Boundary Line Disputes
770.832.0301
email: laworx@hotmail.com
402 Tanner Street, Carrollton, Georgia 30117
- Admitted in Georgia & New York -
JOHNSON ELECTRIC ,
MOTOR SHOP. INC WljSlISS® ,
/ t S' \ l <
Serving West Georgia Since 1926
REPAIR instead of COSTLY REPLACING!
*y
HOURS: 9-1
Extended
weekday hours
8-5:30
SERVICE RV
PORTABLE GENERATORS &
a-5:30 HOME STANDBY GENERATORS
\my generac Expert Service and Parts source for
! OR TITAN 0NAN • GENERAC • TITAN • COLEMAN
ril , jnnAv » ixllJBid! and many other major brands
IVe proudly offer products from Flight SystemdlV or be Storm
as a High Quality, Low Cost Alternative Ready at Horn
to manufacturer replacement parts
TriE AFiEFVE LArlGjEDT mmmmW ©F FiEPAlFt
We are your local parts & service provider for:
Farm Duty Motors • HVAC Fan M
'CALL TODAY &
schedule a tune-up
on your generator
BEFORE the
jhts go out!
Latest Softwi
& Diagnostic
Tools! ..
We can quickly ^fj
locate the
problem & get
you back on the
road in your
