On Sept. 30, Congress passed an emergency bill to keep the government running for another 10 weeks. If this bill had not passed, federal agencies would have run out of money within seven hours. Even more disturbingly, more than half of Congressional Republicans voted against this bill in an effort to end federal funding for Planned Parenthood.
Contention over federal funding for Planned Parenthood and the deficit were among the possible factors that contributed to House Speaker John Boehner’s decision to step down from his position, which he announced on Sept. 25.
He has expressed a strong sense of commitment to addressing our government’s budget deficiencies before he leaves Congress. Boehner said on CBS’s “Face the Nation” on Sept. 27, “I don’t want to leave my successor a dirty barn. I want to clean the barn up a bit before the next person gets there.” This indicates that he will most likely push for a resolution to strengthen the standing of our nation’s finances.
However, on Oct. 1, Secretary of the Treasury Jacob Lew wrote in a letter to Boehner that we may face a dire debt crisis by November 5 — in spite of the emergency resolution. Lew proclaimed in the letter: “Without sufficient cash, it would be impossible for the United States of America to meet all of its obligations for the first time in our history.”
He went on to explain that reaching the legal debt ceiling of $18.1 trillion would result in the U.S. government having $30 billion in working capital.
These factors suggest that Speaker Boehner’s efforts to clean out “the barn” are paramount to our country’s future. The government shutdown of 2013, launched by House Republicans in response to failed efforts to repeal or amend the Affordable Care Act, damaged our economy. According to Standard & Poor’s, the 2013 federal shutdown cost the government $24 billion and reduced fourth-quarter GDP growth by about 0.6 percent.
Despite the fact the government shut down in 2013, and may do so again in the near future, recent congressional sessions have not brought about the results to ensure long-term fiscal stability. If voters do not demand change for the strategic diminishment of debt, our generation will fully experience the consequences.
Indeed, as of Oct. 4, the U.S. national debt loomed above $18 trillion, the debt per citizen greater than $57,100 and the debt per taxpayer greater than $154,400. These numbers hint at a future of oppressive financial burdens — burdens that these politicians probably will not live to experience. But these are burdens that we will deal with when foreign creditors, including the Chinese and Japanese governments, demand payments. At the very least, this could mean diminished access to Social Security, Medicare and other federal government services that we will continue to pay for.
In terms of national debt, China and Japan each hold more than $1 trillion of our national securities. China seeks to hold our treasuries to peg its currency, the yuan, to our dollar. This helps the Chinese government lower the value of the yuan, making China’s exports more competitive in the foreign economy. The lower value of the yuan is a contributing factor in the decisions of many U.S.-based corporations to outsource manufacturing jobs to China, damaging the U.S. economy and workforce. Japan also buys U.S. treasuries to devalue their currency to enhance the attractiveness of their exports, such as cars, in American and other foreign marketplaces. These governments are being proactive in their support of production sectors of their economies, while our government unsustainably spends abroad and neglects economic development at home.
Owing money to the Chinese government is concerning, considering that hackers sponsored by the Chinese government procured millions of records of U.S. federal government employees. Additionally, the National Security Agency revealed that there have been nearly 700 successful hacking attempts by the Chinese government in the last five years aimed at U.S. corporations and individuals. This encroachment upon the cyber security of Americans connected to the government and national financial engines is not a good sign. The Chinese government has established leverage for future financial interactions with the United States.
Evidently, the current status quo of borrowing and spending cannot be maintained. The time has come for Congress to take farsighted action to avoid these debt crises and looming government shutdowns, thereby ensuring stability for our generation.
Ashley Austin can be reached at email@example.com.