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Deficits, Republicans, and the Inevitable Great Default

Written by Gary North on June 5, 2012

When Reagan accepted $200 billion-a-year deficits, beginning in fiscal 1983, he ended Republican opposition to big spending and huge deficits.

Today, Republican Congressmen occasionally talk tough on spending, but then they vote for programs that guarantee a huge, never-ending federal deficit.

They know that hardly anyone back in the district will track their votes. They know that they can vote with the Democrats and not lose votes back home. They will get lots of PAC money.

The showdown in 2010 elected lots of new Congressmen — more than any since 1948. Democrats were on the ropes in the House of Representatives.

The Tea Party had won.

Suuuuuure it had.

The deficit is still way above $1 a year.

The battle over the debt ceiling was all for show. It was for the rubes back home.

The Congress never actually passes a buddet bill. There are a series of “continuing resolutions.” This is business as usual. They are called CRs, as in “conning Republicans.”

From March 4, 2011, when the new Congress was launched until today, the deficit has risen by $1.6 trillion. There has been no change in direction or magnitude.

But Republicans pose as deficit-reducers. It’s all nonsense. It’s posing for the folks back home.

Republicans have the votes to block any bill that does not run a surplus. Balanced budget are for big-spending politicians. We need a surplus.

This would require the guts to shut down the government. It will not happen.

Why not? Because the voters want the freebies from Washington. The voters don’t care about the deficit.

Here is a report from USA Today.

Under the government’s accounting rules, the U.S. government in 2011 increased the debt per household by $42,054. The median household income was $49,445.

The official budget deficit estimate does not include the cost of Social Security and Medicare. The $42 figure does include this cost.

The deficit was $5 trillion last year under those rules. The official number was $1.3 trillion. Liabilities for Social Security, Medicare and other retirement programs rose by $3.7 trillion in 2011, according to government actuaries, but the amount was not registered on the government’s books.

With the off-budget costs factored in, here are some highlights.

Deficits from 2004 to 2011 would be six times the official total of $5.6 trillion reported.

Federal debt and retiree commitments equal $561,254 per household. By contrast, an average household owes a combined $116,057 for mortgages, car loans and other debts.

The voters don’t understand this. The voters don’t care. So, the Tea Party cannot enforce its mandate that the federal budget get ba;anced, let alone paid off.

A Great Default is coming. Count on this.

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14 thoughts on “Deficits, Republicans, and the Inevitable Great Default

  1. Good article and VERY true. People need to get themselves educated if they think they deserve to vote.

  2. DGN: When Reagan accepted $200 billion-a-year deficits, beginning in fiscal 1983, he ended Republican opposition to big spending and huge deficits.

    Today, Republican Congressmen occasionally talk tough on spending, but then they vote for programs that guarantee a huge, never-ending federal deficit.

    BM: Be careful, Dr. North. You are going to upset your many subscribers who believe this is all Obama's fault, and that there is a legitimate left-right debate in this country.

  3. Bill in NC says:

    You can inflate it away.

    Terrible to be on a fixed income, but governments have and will continue to inflate away the real value of their sovereign debt.

  4. This is true. Most republicans must go as they cave in on fiscal policies. I know I am going to work hard to get most of them out of congress. If they cave in on the debt limit at the end of the year, that will be the last straw. They have had enough time to get something passed and if the Senate and President block it, then they must stand strong.

  5. Publius says:

    Turning out Republicans or staying home in the general election is worse than voting for them. Support people who will vote against deficits (like Rand Paul) to defeat RINO's in the primary. Support them with small contributions even if they are not from your district. Support the Senate Conservatives Fund. It does exactly that. That is where real change is coming from.

  6. There is virtually no difference between today's Democrats and today's Republicans, but the reason for this escapes most people (Gary North excepted, see his book "Political Polytheism: The Myth of Pluralism," among others). It's because both Parties (and the entire Constitutional Republic) is based upon the fickle edicts (immorality) of finite man rather than the immutable morality of Yahweh as codified in perfect law and altogether righteous judgments (Psalm 19:7-11, etc.)

    Find out how much you really know about the Constitution as compared to Yahweh's moral law (His commandments, statutes, and judgments). Take our Constitution Survey at http://www.missiontoisrael.org/constitutionsurvey… and receive a free copy of the "Primer" (an 85 page book, normally $7 plus shipping) of "Bible Law vs. the United States Constitution: The Christian Perspective."

  7. sayitright says:

    To the author of this piece, it would be good for someone to better proofread your text for misspellings (buddet bill?), correct grammar, and confusing statememts (deficit way above $1 a year). Sarcasm or missing "trillion"?

  8. How will know if voters won't support reduced spending.? Until last Tuesday we thought voters would support public unions.

  9. ProundPatriotToo says:

    Just remember one thing. The right did not get control of Congress until 2011, but I am sorely disappointed with the so called conservative tea party members who swore they would do the right thing, when they won in November 2011. The young have been corrupted by the 30 plus year politicians on the right or they are too scared to go against the old gray hairs (Rhinos, closet socialist, progressives, etc.) You know, the "I am a Republic, only in title, but I am really what ever the flavor of the day is, depending in "what's in it for me". NUTS! Every time you vote, you have to look at the track record of your representative and see if they have done their job like they promised they would. Today, on line, each state has a site where you can track their voting record for the month and year. If you don't like what you see, than vote them out the next go around. You have only yourself to blame. Don't blame the politicians anymore, you and I put them there. We can remove them either by voting or recall.
    Or just ignore it and loose your freedoms, it's our choice and the ball is in our court. Either America survives this mess in Nov 2012 or we go down with the ship. I will go down fighting, not running or crying.


    In President Regans defense (no pun intended). The vast sums of debt he incurred were because of the SDI program. He may have spent a lot of money on it, however, he avoided a war could have cost a lot more – not to mention loss of american lives.

  11. Mike Knight says:

    Real conservatives need to take back the Republican Party from the neo-conservative establishment just as real liberals need to take back the Democratic Party from virtually the same neo-cons, or maybe they could be called neo-libs. Either way both parties are dominated by globalist corporatist imperial criminals.

  12. Hi Dr. North,

    This is the quote I would like to comment on.

    The voters don’t understand this. The voters don’t care. So, the Tea Party cannot enforce its mandate that the federal budget get balanced, let alone paid off.

    The whole idea of the Tea Party "enforcing" anything is wrong. A person can be a Tea Pary Democrat, Republican, Independent, Conservative, Liberal, or whatever. Just fill in the blank. Your comment makes it appear that you don't understand the Tea Party. I hope you will take the time to do a little research on the topic. Second, you might consider the results that can, possibly, be connected to all things Tea Party. Seats in Congress and Senate that have been influenced, etc.

    Lastly, you might consider the effect of positioning yourself as one that looks down on the Tea Party. The summary statement to your article make you look like part of the problem and not part of the solution. Like it or not, you appear to be positioning yourself with the "established power structure" which I thought you were trying to expose.

  13. the reason there is little difference in the parties is because the communist have taken over the democrat party so all except the far left democrats have to the republican party effectively taking over that party which leaves the republicans no where to go thats why the tea party started

  14. the reason the republicans need to spend large sums of money is because every time the democraps get in office they disarm the country and if they don't start a war which they usually do then when the republicans get back in they have to rearm