April 02, 2007

We all know that George W. Bush’s invasions and occupations depend on a great deal of money. And all of the democrats in Congress should realize they won the midterm elections because the people want us out of Iraq. And now they are about to have a unique opportunity to deny Bush the money to carry on his folly. We’ll see if they have the courage to carry the advantage or simply do what the republicans did in 1995.

In the latter months of 1995, the republicans in Congress, led by Newt Gingrich who had a “contract with America” in his pocket, refused for several months to raise the national debt limit. In fact, Newt said he didn’t care if he bankrupted the nation to get what they wanted. And all they wanted was a agreement from the democrats to balance the budget, a law that finally passed Congress in November of 1997 and picked the year 2003 as the date the budget would be reconciled with tax income.

Of course, this has all blown off in the wind since September 11, 2001 and our bogus “war on terror.” But the opportunity for democrats to deny Bush the ability to borrow the money he needs is about to present itself. And borrowing more or running up the national debt is just about the only place Bush can get that money.

As of March 26, the national debt has been raised $64 billion for the month with four more working days to go. This brings the debt to $8.842 trillion when the ceiling is set at $8.965 trillion, give or take a few billion that’s not counted as “subject to the limit.”

At the rate we’ve been borrowing money, this means that we will reach the debt limit within two to three months.

On top of that, June is the month the federal government dumps more than $60 billion in nonmarketable securities into entitlement accounts like Social Security, Medicare, and their own Federal Employees Retirement System (FERS). There’s no cash involved with this semi-annual interest payment, but it does raise the national debt.

This means that within the next month or so you can expect Secretary of the Treasury Henry Paulson to begin ranting and raving to Congress about how it’s time to again raise the national debt limit. Usually, he doesn’t have to push too hard because this has become almost a yearly event since Bush took office. The last time the ceiling was raised was March 20, 2006.

What remains to be seen is whether the democrats, perhaps followed by a few republicans, have the nerve to stand up to the executive branch and do what the republicans did to them in 1995. Refuse to raise the debt limit.

Refusing to raise the debt limit would cut Bush’s plans off at the knees. Without the ability to borrow, any troop surge in Iraq or potential invasion of Iran would die a quick death. Without the ability to borrow, the $124 billion Congress has already authorized in supplemental funds would not be available unless Bush takes it from every other item of discretionary spending.

Without the ability to borrow, the U.S. Treasury will be running after their tails to pay off securities maturing at the rate of billions per day and immediately replace them with new loans. Running twice as hard to move debt from one credit card to another will be compounded enormously, particularly since both China and Japan, our two largest creditors, are turning away from the dollar.

At the very least, the democrats would be able to get a definite timeline for getting our troops out of Iraq.

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Debt Limit - We're Not There Yet

The Economy - What Does This Tell You?

Broke & Stalling - Now We're At The Debt Limit

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