The Debt Debate in a Nutshell

[N.B.: In one sense, I regret having to put up so many recent posts on a single topic -- a topic that does not even have anything directly to do with the Anglican Communion, or with ECUSA. (Please note that reservation: I said directly. Indirectly, of course, if this country goes down the tubes at this particular point, ECUSA will follow it a short year or so later. Even Trinity Church in New York City, the primary landlord of Wall Street, will not be immune from the consequences, and the repercussions from the United States could well sink the Church of England and the current Anglican Communion, to boot.)

[Nevertheless, on reflection, and properly understood, the current debt crisis is, I humbly submit, the single most important moment in the history of these United States since Lord Cornwallis' surrender at Yorktown in 1783. I would feel greatly remiss if I failed to convince one single reader of this point, and at the same time failed to give him or her the ability (and the ammunition) to converse responsibly about what is going on. Therefore, let us soldier on: Herewith, one more post about the debt debate -- which, I promise, will be not much longer than this Introduction.]

Given that the House of Representatives has now sent to the Senate not one, not two, but three separate bills to deal with the current debt limit/budget impasse; and

Given that the President's current proposed budget was a non-starter, which would have continued the year-to-year deficit at an unsustainable $1.2 trillion (with still greater deficits to come), and which even the Democrat-controlled Senate defeated by a 97-0 vote; and

Given that the Senate on their own, under Democrat Majority Leader Harry Reid, has ducked their responsibilities, for which (for heavens' sake!) we pay them each nearly $175,000.00 per year, to negotiate and pass (let alone, say, propose) a budget for the Government's operations -- for over 821 days now (translation to the common tongue: 821 days is two years, three months, and one day); and finally,

Given that the Senate just tabled the third proposal in the last four months to resolve the current crisis, laid before them by their colleagues in the House, with no counter-response whatsoever, and that they did so because both the President and Senate Democrats want a free pass until after the next election, which the Republicans are not minded to give them, at the country's expense;

Then the current debate over the budget/debt limit boils down to this, in a nutshell:

Democrats: "You won't compromise with us to guarantee that we do not have to face this issue in nine to twelve months, right when the 2012 elections will be heating up. You meanies want to make this an issue for our re-election, right at the time when our actions will be fresh in everyone's mind. That's so rigid, so 'right-wing radical,' so terrorist of you, to hold our Government hostage for such a small 'gimme', which would demonstrate to our captive media that you are the namby-pambies and RINOs we privately say you are." (That last dependent clause, of course, is unspoken, but is implied in the stakes of the debate.)

Republicans: "It's not our job to help you get re-elected, so that you can continue on your mission to 'save life on this planet as we know it today.' We have been elected to represent the best interests of the country as a whole, and not just the interests of you Democrats who will face re-election. The country can no longer afford what you are doing. So if you want to prevent a default over the money your non-budgets have committed us to borrow just since January 1 of this year, you had better take our bill off the table, and pass it."

That is it, folks -- that's what all the spilled ink and gaseous rhetoric comes down to, after piercing through all the ad hominem jibes and the supercilious appeals to "bipartisanship". For anyone who needs a picture of the difference between the two parties' approaches to spending (once again, in defiance of all the spin stories promoted by the captive media), then please take a look at this one -- as always, click to embiggen:

You now have a ready, handy-dandy translation of all the rhodomontade to which you are currently being exposed, and will continue to be exposed in the days to come. This is a public service, happily provided in the interest of true understanding, by your trusty Anglican Curmudgeon (who won't deny that there is a religious element to all of this debate -- having to do, don't you know, with such currently out-of-fashion concepts as "stewardship"). That, however, is a topic for another day -- if, God willing, we survive the present ones.

[UPDATE 07/30/2011: The lawyers in the audience should find intriguing this analysis by Michael Stern of the tangled constitutional arguments about the need to raise the debt ceiling.]

[UPDATE (#2) 07/30/2011: It going down to the wire, folks. Hot Air has an open thread following the events in real time, with an excellent presentation of the procedural pitfalls, and the strategies being adopted on each side to avoid them. Also, don't miss Keith Hennessy's backgrounder on the President's apparent fallback strategy -- at least, as much of it as can be gleaned from reading between the lines. Finally, if you are sick and tired of all the gamesmanship going on, you might want to let off steam via Mark Levin's great rant (mp3).]

[UPDATE (#3) 07/30/2011:

A fantastic speech today, from the floor of the Senate, by the junior Republican from Florida -- the exchange with Senator John Kerry alone is a priceless example of what's at stake:

As long as a few of our legislators can get it as well as Sen. Rubio does, there may be some hope yet!]

[UPDATE 08/01/2011: For all those who have patiently waded through all the back-and-forth posturing, accusations and demagoguery, Havoc on the Hill has a perfectly marvelous pictorial summation of the process which is worthy of our own Christopher Johnson (it's not entirely safe for work, so a mild caution is in order). H/T: Above the Law]

Washington Is Not Listening -- Let's Give Them Two Reasons to Do So

The Boehner Plan . . . The Reid Plan . . . both of them scarcely distinguishable from each other, yet they fill up and dominate the news from Washington these days. The reason they differ so little is that they are products of the same nursery, or (during these summer days, at any rate) hothouse. Washington is not listening to people outside the beltway, who have actually been there before, and have done this. (That's what happens when you become too accustomed to spending other people's money -- including money that pays for your salary and all your perks -- instead of your own.)

Herewith are two sensible proposals from outside the Beltway, both of which would introduce a novel element of self-interested feedback into trimming wasteful government spending. The first is a short-term one, tailored to the current crisis. The second is a longer-term one, which we could start to implement once we resolve the immediate crisis.

The short-term plan (kudos to Morgan Worstler, at Big Government blog):

No one understands “what” is going to be cut. Saying discretionary spending is going to be cut over ten years sounds like a Nigerian email scam.

So please Boehner, for the love of god, listen to your buddy Morgan…. Just cut federal employee pay.

Give Obama three choices:

1. Cut Federal Employee Pay in every department except Military by $30B per year (off baseline) starting 2012: Ten-year savings $300B

2. Cut Federal Employee Pay in every department except Military by $60B per year (off baseline) starting in 2012: Ten-year savings $600B+

3. Cut Federal Employee Pay in every department except Military by $90B per year (off baseline) starting in 2012: Ten-year savings $1T+.

Make Obama choose. He can’t win.

Tell him that if he chooses low, when the credit card is maxed out again, he is getting the same deal next time. Suddenly, ALL Federal public employees are with our program.

Do you see how simple this is, and how brilliant? Let's let Morgan spell it out:

Overnight, the entire Federal workforce will be desperate to help Republicans make real cuts. Overnight, our “servants” will be finally pushing out the deadwood, over the howls of their union bosses. Let’s get public employee interests aligned with the public.

To give you an idea of how easy these cuts would be, if we cut the full $90B off baseline, Federal Employees would be earning what they last received in 2008. A $30B cut is just paying them what they received this year.

Mr. Speaker, put Federal Employee pay on the chopping block, Americans will be grateful to know where it is coming from… and that is not coming from them. And the Tea Party Freshman will see you know which hostage to take.

The hero takes the bad guy as a “hostage,” and he chooses the bad guy who can actually DIFFUSE THE BOMB.

If we can’t trust Federal Employees to really help Republicans cut spending, they are the bad guys.

Given the overwhelming recent growth in Federal pay, I'd say this cuts right to the source of our current problem, and could be implemented in a heartbeat. Plus, it would teach a very valuable lesson: there is no free lunch on the People's Money. If the People start to hurt as a result of your bozo policies, then you, who devised and implemented those policies, will have to suffer some of that hurt, as well. (Incidentally, as an aside: did anyone else notice the name of the Standard & Poor's executive in charge of reviewing the grade for the government's debt? It's David T. Beers -- no known relation to the PB's Chancellor.)

The long-term plan builds on the same idea, but is even more permanent and fail-proof. I no longer know whom to credit for it; it was proposed by a long-forgotten economist in an article I read in the 70's in an obscure little journal called The Washington Monthly. The basic idea was so good, and so simple to grasp, that I've never forgotten it, although I've forgotten the name of its inventor:

1. The Government announces the creation of a new currency, to exist side-by-side with the dollar.

2. The purpose of the second currency is simple: it will be legal tender, and henceforth, the only legal tender, for all transactions involving the U.S. Government.

a. All payments made by or from the Government will be made only in the new currency.

b. All payments made to the Government (taxes, fees, customs duties, etc.) will also be made only in the new currency.

3. All future government budgets, calculations, projections, etc., will be produced in terms only of the new currency.

4. The dollar will cease to exist as a currency recognized by the U.S. Government. All dollar accounts held at Federal Reserve Banks will immediately be converted into units of the new currency, at an initial ratio of 1:1.

Now, this is the key point -- so read carefully:

5. The dollar will continue to be the basic, and only, legal tender for the private economy. All of our daily business will continue to be transacted in dollars, just as before.

6. In order to deal with the Government, persons holding dollars will need to convert them into the new currency. (We need a convenient name for the new currency. The original author, I remember, suggested the name "Budget Bucks", or "BBs" for short, and that will do fine for now.)

7. All persons having dealings with the Government -- federal contractors, members of Congress and their staffs, the President and his staff, all federal judges and their staffs -- will be paid in BBs, and so they will need to convert them to dollars in order to buy groceries and pay their normal bills.

8. Dollars will freely be convertible to BBs, and vice versa, at all banks, or at local post offices.

And that's it! See how simple it all is, once again? Consider these aspects of the plan:

A. The convertibility of dollars into BBs, and vice versa, will establish over time an exchange rate, which will be set by the market, just as with any foreign currency. (As we saw above, the initial official exchange rate, to be fair, will be exactly 1:1 -- but it will apply only to those holding accounts at Federal Reserve Banks. Immediately thereafter, the BB will be free to float on its own.)

B. If the supply of dollars exceeds the supply of BBs, the latter will grow in value to be worth more than the dollar.

C. But -- and here's the kicker -- if the supply of BBs grows without bounds, due to profligate government spending and "budgets", the value of a given BB will drop in terms of the dollar.

D. And the dollar, freed of its government tether, will actually have a value in proportion to all of the goods and services which people using it create.

The beauty of this plan is that it will let the politicians play with their money -- the BBs in circulation -- all they want, and will divorce from us their ability to mess with our money supply. To the extent the politicians bring their own house into order, and balance their budgets, they will be rewarded in seeing that their salaries are actually worth something in the real world, when they exchange their BBs for dollars. But to the extent they run wild, then the more they try to make up for the loss in BB purchasing power by raising their salaries and perks, etc., the more their BBs will depreciate. As I say, the scheme is self-regulating, and therein lies its simple genius.

Doubtless the implementation of a real dollar-BB system would require a conference of monetary scholars and economists to work out all the finer details of implementation. But the basic idea could be expressed in a law to be passed by Congress (since it already has the constitutional power to regulate money) -- and then enshrined as a Constitutional amendment once the kinks were ironed out, in order to prevent Congress from tampering with the idea for its own benefit.

So call or write your Congressional representatives, and let them know that you want them to implement the Worstler (federal pay reduction) plan tomorrow, and start the wheels churning for an eventual two-currency system down the road. You will have no trouble sounding rational and sensible, because those plans are far better than anything Washington has thus far come up with on its own.

The Game Is Rigged - Time to Move Outside the Box

The drumbeats are getting louder and louder. Except for the fact that it is such a cliché, one would almost suspect that "the Democrats are getting restless tonight."

Consider just this panic post, or this (both from just one liberal Democratic website). Democrats and their friends in the media are lining up to smear Republicans for their reluctance to approve an increase in the debt limit without any conditions attached (such as cutting spending). The real-life equivalent of taking away the punchbowl produces caterwauling the likes of which this Curmudgeon has seen to date only in Greece, Ireland and similar countries that have spent themselves into ruin.

The Republicans seem to be getting themselves into a box of their own making, from which there is no decent escape. Their attempts to enact spending curbs are seen by liberals as mean-spirited at best, and at worst a ploy to bring about a complete "default" (not really) by the United States -- the first one in its 222-year history. (Of course, the United States began with the demise of the Articles of Confederation, triggered by an inability of the government to make good on the Revolutionary War debt which the Continental Congress had issued in the form of paper "Continentals". But the less said about that today, the better, because liberals like all the paper debt being issued by the government in ever greater and greater quantities since Barack Obama became its President.)

As usual, the solution to this dilemma lies in making a move "outside the box" -- without regard to the constraints Democrats are trying to force on Republicans. First of all (trust me on this), the Republicans in the House should enact a simple measure approving a rise in the authorized debt ceiling.

WHAT??! you say -- ARE YOU CRAZY??!

Bear with me a moment, please. In a game of chess, it is always best to see at least three or four moves ahead of your opponent.

The House, I say, should enact a simple, one-line bill raising the debt ceiling: and not by a trifling amount, but by something humongous. Current authorized debt is around $14.2 trillion dollars (see the link for a graphic visual depiction of that amount of money), but the government's unfunded liabilities (i.e., the promises the legislators have made to all their constituents over the years, in order to get re-elected again and again) amount to almost one hundred and fifteen trillion dollars (see figure at lower right of the clock, and see again the huge skyscraper of stacked dollars at the bottom of this link). Therefore, I say, raise the debt ceiling to a comfortable margin over that: let's say ONE HUNDRED AND FIFTY TRILLION DOLLARS.

THAT should get their attention -- and their overwhelming approval in two shakes of a lamb's tail. OK: default has been averted, and that issue is off the table. However, the measure raising the debt ceiling has one small caveat attached to it (overlooked in the general rush of relief at avoiding default for years and years to come). For what the measure actually says is this (or words to this effect; I have italicized the little caveat I have in mind, so you can think about it):

The total amount of debt which the United States of America is authorized to incur to pay its approved expenses is hereby increased to the maximum sum of One Hundred and Fifty Trillion Dollars ($150,000,000,000,000.00).

Do you see what the effect of the italicized words will be? Reflect on this simple fact: there is currently no lawfully enacted budget on which the Government is operating. The President's last proposed budget was voted "Dead on Arrival", because it made no meaningful attempt at reducing the sea of red ink in which the country is now drowning. The Senate (where the Democrats are in the majority, for the time being) has failed to produce any kind of budget measure for the last 800+ days (more than two years).

So what has our government been running upon, if no budget has passed both the House and the Senate for more than two years, and then signed into law by the President?

Answer: ever since Obama came into office, the Government has been running on a series of continuing resolutions, the first of which was passed into law in March 2009, and signed into effect by the newly elected President. The last such resolution was enacted in April, and its authority expires on September 30, at which time another continuing resolution will be due if the government is not to shut down.

To which I say: Nuts! The Republicans, having avoided the threat of default by taking the debt limit ceiling off the table, should now draw the line at spending another single penny without a fully lawful and duly enacted budget in place -- approved by both Houses of Congress and then signed by the President, as the Constitution has always contemplated.

That is where the Republicans have their leverage, and for which they cannot rationally be blamed by anyone, no matter how liberal. They simply say: "We are against spending any more money without an approved budget."

"But you have to authorize more spending at the current level," the Democrats reply, "otherwise the government will be forced to shut down."

"Balderdash and poppycock," the Republicans reply. "Why do we have to continue to operate without a budget? No sensible household in America tries to do that. Budgets are required by law, and we have (until Barack Obama became President) always had budgets, so why should we change our ways now?"

"But we do have a budget -- of sorts. We just keep spending at the same level we have been spending for the last two years. What's wrong with that?"

"Because revenues are down, that's what. More people out of work, and more businesses going under, mean that less and less taxes are being paid to the Government."

"Well, we can raise taxes -- that's no problem, if you'll go along."

"Raise taxes to bring in more revenue in a declining economy? Where did you go to school?"

And so on and so on -- trust me: the Republicans will have the upper hand on this one.

* * * *

The foregoing hypothetical is meant to demonstrate the sheer folly of drawing a line in the sand just now over the debt limit. As usual, the politicians and their captive media are not focusing on the real issue at hand: the Government is operating without a budget. Raising the debt ceiling in such an environment is an invitation to uncontrolled spending and borrowing, because without a budget, there are truly no limits. By bringing the debate back to the budget, Republicans can hope to build support for a balanced budget amendment if they gain back a majority in the Senate, and win the White House, in 2012.

But by playing chicken with the Democrats over the debt ceiling, the Republicans are agreeing to do battle on a ground that is deliberately rigged against them, and on which they cannot emerge as clear winners.

Doesn't anyone else see this as clearly? Am I off base in calling attention to this point? If so, I wish someone would deign to enlighten me. For the life of me, I cannot see a downside for the Republicans if they would just follow the above strategy.

A Stunning Film about Jerusalem Is in the Works

Take a look at this magnificent footage of the Holy Land, shot in IMAX and 3D, which will form part of the film Jerusalem, scheduled for release in 2013 (be sure to click the four-corner icon next to the "vimeo" logo to view the film in full-screen mode, for maximum impact):

Jerusalem | Filmed in Imax 3D from JerusalemGiantScreen on Vimeo.

Follow the link to "JerusalemGiantScreen" above to learn more about the movie, and to register for more footage and updates as they are made available.

Fiddling While Rome Burns

If there was ever any historical truth to the report that the Emperor Nero played his lyre while the main part of Rome was destroyed by fire in 64 A.D., then we should count ourselves unlucky to have to witness the same insouciance taking place before our eyes today. While the politicians in Washington dither and fume, President Obama is playing a game of Twenty Questions with them, forcing them to guess what mix of measures he would favor (think: higher taxes) and spurn (think: spending cuts today), without putting forward any specific proposals himself. Meanwhile, the government's insolvency looms closer and closer, when the Secretary of the Treasury's last shell game will run out of peas to shift around.

With the authorization of Congress granted in 1986, the Treasury since last May has been creating some "breathing space" below the debt ceiling by robbing cash and previously purchased Treasury securities from specific government funds which are required by law to invest their receipts in such securities: the Civil Service Retirement and Disability Fund is one such victim, and the Government Securities Investment Fund ("G-Fund") is another (scroll down the previous link).

The purpose of appropriating the cash receipts of these funds is obvious: when their cash is used to pay bills, instead of purchasing more Treasury securities, it keeps Government debt from increasing pro tanto. And when the Treasury takes securities from these funds and sells them to third parties for cash to pay its current bills, it is also thereby reducing the total amount of Government debt outstanding. By selling hundreds of billions of dollars' worth of the securities in the weeks since May 16, when he announced the commencement of his juggling operations, and by appropriating the funds' incoming cash, Secretary Geithner has been able to pay all of the government's bills as they fell due, without exceeding the total debt limit established by Congress.

However, all such shell games must eventually come to an end, and this one is no exception. The wizards at Treasury were able to forecast in May (see the previous link) that even by robbing the trust funds, the Government's outstanding bills would exceed the Government's ability to borrow more cash to pay them by August 2. That date, confirmed in an announcement on June 1, thus became the much-touted "Financial Armageddon" about which one has been reading so much lately.

With the wonders of the Internet, now you can play "Treasury Secretary" yourself, see just what bills you will face on August 2 (about $306.7 billion), how much cash you will be receiving with which to pay them (about $172.4 billion), and make your choices accordingly. Bloomberg has put up a very helpful interactive chart to illustrate the choices, and I encourage you to try it out. You will learn more there in a few minutes about the government's financial operations than you will ever learn by listening to statements from and speeches by politicians.

Secretary Geithner has helpfully spelled out what he sees would be the consequences of failing to raise the debt limit by August 2 in this letter he wrote on May 13, 2011 to Senator Michael Bennet:

As you know, the debt limit does not authorize new spending commitments. It simply allows the government to finance existing legal obligations that Congresses and presidents of both parties have made in the past. Failure to raise the debt limit would force the United States to default on these obligations, such as payments to our servicemembers, citizens, investors, and businesses. This would be an unprecedented event in American history. . . .

A default would call into question, for the first time, the full faith and credit of the U.S. government. As a result, investors in the United States and around the world would be less likely to lend us money in the future. And those investors who still choose to purchase Treasury securities would demand much higher interest rates . . .

Default would not only increase borrowing costs for the Federal government, but also for families, businesses, and local governments - reducing investment and job creation throughout the economy. Treasury securities set the benchmark interest rate for a wide range of credit products, including mortgages, car loans, student loans, credit cards, business loans, and municipal bonds. Accordingly, an increase in Treasury rates would make it more costly for a family to buy a home, purchase a car, or send a child to college. . .

. . . Additionally, a default would substantially reduce the value of the investments - including Treasury securities - held in 401(k) accounts and pension funds, which families depend on for their retirement security. This significant reduction in household wealth would threaten the economic security of all Americans and, together with increased interest rates, would contribute to a contraction in household spending and investment.

Had enough doom and gloom yet? He's still not through sketching the consequences:

The unique role of Treasury securities in the global financial system means that the consequences of default would be particularly severe. Treasury securities are a key holding on the balance sheets of virtually every major insurance company, bank, money market fund, and pension fund in the world. They are also widely used as collateral by financial institutions to meet their day-to- day cash flow needs in the short-term financing market.

A default on Treasury debt could lead to concerns about the solvency of the investment funds and financial institutions that hold Treasury securities in their portfolios, which could cause a run on money market mutual funds and the broader financial system - similar to what occurred in the wake of the collapse of Lehman Brothers. As the recent financial crisis demonstrated, a severe and sudden blow to confidence in the financial markets can spark a panic that threatens the health of our entire global economy and the jobs of millions of Americans.

Even a short-term default could cause irrevocable damage to the American economy. Treasury securities enjoy their unique role in the global financial system precisely because they are viewed as a risk-free asset. Investors have absolute confidence that the United States will meet its debt obligations on time, every time, and in full. That confidence increases demand for Treasury securities, lowering borrowing costs for the Federal government, consumers, and businesses. . . A default would call into question the status of Treasury securities as a cornerstone of the financial system, potentially squandering this unique role and the economic benefits that come with it.

Moreover, the fact that the United States would not have enough money to meet all of its obligations would have serious economic consequences. If the United States were forced to stop, limit, or delay payment on obligations to which the Nation has already committed - such as military salaries, Social Security and Medicare, tax refunds, contractual payments to businesses for goods and services, and payments to our investors - there would be a massive and abrupt reduction in federal outlays and aggregate demand. This abrupt contraction would likely push us into a double dip recession.

There is no question that we should avoid the consequences of bumping into the debt limit -- they will truly be unpleasant for everyone. But the real questions are: How did we get ourselves into this situation? And what must be done to get ourselves out of it?

Secretary Geithner hinted at the answer to the first question when he wrote: [The debt limit] "simply allows the government to finance existing legal obligations that Congresses and presidents of both parties have made in the past." (Emphasis added.) Our politicians, for various historical reasons, have always concerned themselves with current spending, and have left it to the Treasury to worry about the sum total of what year-to-year current spending adds up to. This has forced the Treasury to borrow money almost from the very first day of the Government's existence, as sketched in this earlier post.

There was only one day in our country's entire 222-year history when there was zero Government debt outstanding -- that historic date was January 8, 1835. President Jackson's resolve to stop government borrowing, however, was hijacked the very next day, when the Treasury had to issue new notes to pay bills that had accumulated from prior approved spending, because there were not enough cash receipts on hand.

And it's been like that ever since. Congress and the President are continually spending money which the Government does not have through its cash flow. The problem is that, although they have said each year they were establishing a budget, the budget gets overtaken by events, or else it was not accurate in forecasting receipts or expenses -- or whatever. So budgets came to be looked upon as just "guesstimates", while the limit on government borrowing had been set by earlier laws (back when the government tried to do things right). When the first debt ceiling was reached, Congress obligingly bumped it up a notch, and it's been doing so ever since.

So the first step toward remedying this problem is to implement zero-based budgeting, and to stop projecting steady increases in authorized spending over the previous year's levels.

The next step is to adopt a balanced budget amendment, which will prohibit Government from relying on borrowing to finance its current expenditures. Borrowing will revert to its original purposes: to finance capital outlays for infrastructure improvements, wars and national emergencies, and similar situations for which current cash flow is inadequate. And it would be managed just as any other business does it: debt would be kept below a level where the cost of servicing it robs too much of current income. Passing such an amendment will be a true test of integrity -- past attempts have been sabotaged.

But the real substantive step would be the systematic elimination of Government waste and fraud. Hundreds of billions, if not trillions, could be cut from spending if there were some kind of accountability measures put in place. (And the best way of all to do this would be to make all government employees and contractors self-accountable -- that is, it would be in their own best interest to minimize government waste and fraud. But that's a subject for a separate post.)

Finally, the Heritage Foundation has provided a helpful checklist of other measures necessary to get the government debt monster under control.

So that is the conventional answer to the questions posed above. I am pessimistic about the chances of such common sense ever descending upon our elected officials before time -- and money -- run out on them. They will continue spending and wasting our money as they always have, until the very disasters which Secretary Geithner so vividly portrayed will be forced on them by ever-increasing borrowing.

When lenders stop buying Government securities because of a fear they will never be repaid, or will be repaid in worthless dollars, then the Government will have to sell its securities to itself -- as it already has started doing, in spades. And when that becomes the Government's only source of funds, we will drown in a sea of paper dollars, and inflation will destroy any shred of meaning the dollar has left.

So raising the debt limit once again by August 2 is a virtual certainty; the only question is what accompanying measures can the Republicans force on the Democrats that will begin to reverse the current trend. If the measures are just more toothless promises, then long-term death by debt becomes that much more certain a future. Sic transit gloria Americae.

The High Inquisitor of Gould/Hogwarts

Once again, it is time to juxtapose two passages from current events and writing, without further ado or comment. The excerpts speak for themselves:

First, from Harry Potter and the Order of the Phoenix, by J. K. Rowling (2003), ch. 17:

The High Inquisitor of Hogwarts

All Student Organizations, Societies, Teams, Groups and Clubs are henceforth disbanded.

An Organization, Society, Team, Group or Club is hereby defined as a meeting of three or more students.

Permission to re-form may be sought from the High Inquisitor (Professor Umbridge).

No Student Organization, Society, Team, Group, or Club may exist without the knowledge and approval of the High Inquisitor.

Any student found to have formed, or to belong to, an Organization, Society, Team, Group, or Club that has not been approved by the High Inquisitor will be expelled.

The above is in accordance with Educational Decree Number Twenty-four.

Signed:

/s/ Dolores Jane Umbridge

HIGH INQUISITOR

Next, an ordinance passed by the City Council of Gould, Arkansas:

CITY OF GOULD

ORDINANCE NO.062011-S

BE IT ENACTED BY THE CITY OF GOULD AND THE CITY COUNCIL OF THE COUNTY OF LINCOLN, STATE OF ARKANSAS, AN ORDINANCE TO BE ENTITLED:

AN ORDINANCE TO DISALLOW THE GOULD CITIZENS ADVISORY COUNCIL FROM EXISTING WITHIN THE CITY LIMITS OF GOULD

BE IT ORDAINED by the City of Gould City Council:

SECTION 1: GOULD CITIZENS ADVISORY COUNCILS ABILITY TO OPERATE WITHIN THE CITY OF GOULD. The Gould Citizens Advisory Council by passage of this ordinance is hereby banned from doing business in the City of Gould.

SECTION 2: That the said Council is, in effect, causing confusion and discourse [sic] among the citizens of Gould and as a result is contributing to the friction not only between the Mayor and Council but also among the citizens who deserve a cooperative government. Also no new organizations shall be allowed to exist in the City of Gould without approval from a majority of the City Council.

SECTION 3: Therefore, an emergency is hereby declared to exist and this ordinance being necessary for the immediate preservation of the public peace, health and safety shall be in full force and effect from and after passage and approval.

And from the same City Council, a second ordinance:

CITY OF GOULD

ORDINANCE NO. 062011-4

BE IT ENACTED BY THE CITY OF GOULD AND THE CITY COUNCIL OF THE COUNTY OF LINCOLN, STATE OF ARKANSAS, AN ORDINANCE TO BE ENTITLED:

AN ORDINANCE FOR THE POLICIES AND PROCEDURES TO GOVERN THE MAYOR'S ABILITY TO CALL ANY MEETINGS IN OR OUT OF THE GOULD CITY LIMITS AT WHICH CITY BUSINESS IS DISCUSSED WITHOUT A TWO THIRDS VOTE FROM THE CITY COUNCIL.

BE IT ORDAINED by the City of Gould City Council:

SECTION 1: MAYOR'S AUTHORITY TO CALL SPECIAL MEETINGS. The Mayor of the City of Gould shall not call special meetings to discuss City business without two thirds of the City Council's vote to do so. This includes meeting [sic] held inside or outside Gould city limits.

SECTION 2: The Mayor nor City Council members shall attend or participate [sic] in meetings with any organization in any location without City Council approval by two thirds vote.

Now, these ordinances from Gould, Arkansas come with the following explanation/ commentary by a member of the City Council which enacted them:

"In everything, you have somebody in control over it. In everything," said Council Member Sonja Farley.

Farley says no matter the group, if you discuss the city at all, the meeting must be approved by the city council.

"You couldn't just come in here and get with four people and decide you want to start an organization," said Farley. "You will go through your city council with documentation, the right paperwork and get an approval."

(H/T: Josh Blackman and Volokh Conspiracy)

Pot, Please Meet Kettle

The following two statements need to be juxtaposed, with minimal comment. First, from the Rev. Canon Mark Harris' Preludium blog, as he complains about the "secret meetings" between the Archbishop of Canterbury and those who would eventually found ACNA:

Many of us have know[n] that there were conversations going on with the Network folk as they began the move that became finally the Anglican Church in North America, but have had no proof of such meetings. Now, as it begins to be history and not current events, Anderson feels free to tell us that there were many meetings. He does so believing that he was betrayed by the Archbishop who exhibits "passive aggression in dealing with any dissent from the orthodox wing of the Anglican Communion."

Well, I care not that he was stung.

What I do care about is that at a time when we are being asked to trust a system of consultation between the "instruments of Communion" and member churches whose actions may or may not have been reasonable in the eyes of other member churches, we have here the example of the Archbishop of Canterbury deliberately engaging in matters internal to a member church of the Communion apparently without transparency or consultation with the Church itself. More, the people he was meeting with were set on the path to form a new Anglican body (see the Chapman Memo of December 2003). That memo was reported on widely and by Thinking Anglicans in January 2004. It is impossible to believe that the Archbishop of Canterbury and his staff did not know by January 2004 that the American Anglican Council and others were set to begin a process that would involve an attempted coup.

The whole history of the meeting, however many there were, the secrecy of them, and the role the Archbishop had in supporting or retarding the development of the Network and the Network into the Anglican Church in North America, is greatly disturbing to some of us in The Episcopal Church as we consider the matter of the Anglican Covenant.

If this is the kind of meddling statesmanship we can expect from the Archbishop as an instrument of communion and unity, we have every business being suspicious of the whole thing.

And the next quote comes from Bishop Mark Lawrence's address to the annual diocesan convention of the Diocese of South Carolina in March 2010, protesting the recent incursions into his diocese authorized by the Presiding Bishop and her Chancellor:

I come now to the reason why this Annual Diocesan Convention was postponed. . . . In December of 2009 our Chancellor, Mr. Wade Logan, was finally informed by a local attorney that he had been retained by the Presiding Bishop’s Chancellor. In a subsequent series of letters he presented himself as “South Carolina counsel for The Episcopal Church” and requested numerous items of the Bishop and Standing Committee, as well as information regarding parishes in this diocese. This way of presenting himself fails to acknowledge that this diocese is the only recognized body of The Episcopal Church within the lower half of South Carolina. There is no other representative or ecclesiastical authority of The Episcopal Church here but our Bishop and Standing Committee. Furthermore, this was carried out without the Presiding Bishop even so much as calling me. . . . The retaining of counsel now has all the signs of an adversarial relationship—one of monitoring through a non-constitutional and non-canonical incursion how a Diocesan Bishop and Standing Committee may choose to deal with its priests and parishes.

What is astonishing is that this Diocese of South Carolina, while seeking to be faithful to the Holy Scriptures, historic Anglicanism and the received teaching of the Anglican Communion as expressed through its four Instruments of Unity, as well as to The Book of Common Prayer, and adhering to The Constitution and Canons of this Church, has experienced incursions not authorized by these very constitution and canons. . . .

All this is a profound overreach of the Presiding Bishop’s authority. . . . [T]he thing we are confronting now is . . . a challenge to how for over two hundred years The Episcopal Church has carried out its mission and ministry. . . . In standing up and protecting our autonomy or independence as a diocese in TEC, in protecting the diocesan bishop’s authority to shepherd the parishes and missions of his diocese, and in defending the bishop and, in his absence, the Standing Committee as the Ecclesiastical Authority, we are in fact defending how TEC has carried out its ministry and mission for these many years. Every Diocesan Bishop, every Standing Committee, indeed every Episcopalian ought to know that if this is allowed to stand, that if the Presiding Bishop and her chancellor are allowed to hire an attorney in a diocese of this Church, to look over the shoulder of any bishop or worse dictate to that Bishop or Standing Committee how they are to deal with the parishes and missions under their care, imposing upon them mandates or directives as to how they disburse or purchase property then we have entered into a new era of unprecedented hierarchy, and greater autocratic leadership from the Presiding Bishop’s office and his or her chancellor. It may then be the case that a chancellor who has heretofore been only a counsel of advice for the Presiding Bishop can now function, without election, confirmation or canonical authority, as the de facto chancellor of the Church, exercising power not authorized by this Church and therein dictating to the dioceses of this church how they shall deal with their parishes and property.

Recently, the Presiding Bishop and I have had a respectful conversation about this matter, during which she asserted once again what she has stated publicly on many occasions: That she has responsibility for the whole Church. That the property of The Episcopal Church must be protected and this is one of her duties. But if so, it is a duty that she has assumed, not one stated in the Constitution & Canons, nor assumed by any previous Presiding Bishop. . . . [S]hould a diocese decide to purchase property to plant a congregation, or alienate or sell the property it possess, it seeks no further authority than itself for such action. So too if a diocese chooses to close a congregation there is no higher authority than the bishop. The Presiding Bishop’s decision to hire counsel in South Carolina leads us all into such precarious waters that every diocese and bishop in this Church ought to be concerned, lest the polity and practice of TEC be changed by a precedent without constitutional or canonical authority. . . . Unfortunately, after lengthy and respectful conversation, the Presiding Bishop and I stand looking at one another across a wide, deep and seemingly unbridgeable theological and canonical chasm. . . .

. . . This is not to imply that a Church, diocese or parish should never go to court or enter into litigation. It is merely to suggest that the imposing of a model of indiscriminate and unbridled litigation on the 110 dioceses of this Church, as if one model fits all, has brought bitter acrimony, a multiplication of law suits and what St. Paul feared so many years ago, public disgrace and scandal upon the Church. For [the Presiding Bishop] to demand in this diocese such a policy would be an egregiously inept exercise of non-canonical pastoral leadership. Furthermore, this is the wrong time in the life of The Episcopal Church for such a centralization of power, especially one so far removed from the ethos and issues of regions and dioceses. The irony is that such remote hierarchical authoritarianism without constitutional and canonical restrictions, and in the absence of theological unity, would only exacerbate the crisis of spiritual authority we are experiencing in The Episcopal Church and across the Anglican Communion.

Sauce for the goose is sauce for the gander, Fr. Harris. If you complain about the Archbishop of Canterbury "meddling" in ECUSA's internal affairs without any authority under the instruments of the Anglican Communion, then how do you justify the Presiding Bishop's meddling in the internal affairs of the Diocese of South Carolina, without any authority under the Constitution and Canons?

[UPDATE 07/18/2011: Father Harris has been accommodating enough to explain why he thinks I am off-base in my criticism. He writes (in part, with my italics added):

Well, the "sauce" in each case is different. In the first, namely the Archbishop meeting secretly with people who were clearly unwilling to be in a church they deemed doomed, the problem with the sauce was that it involved someone not of this church entering into deep conversations about ways to either change this church or replace it. I don't suggest that the Archbishop was for the development of what became ACNA (The Anglican Church in North America), but I do believe he ought to have been both transparent (at least by notification) and clear about his role. And yes, the ABC meets with many people and many conversations are private. But very few are secret, at least in the way that David Anderson described it. In any case it was an intervention in the life of this church by a prelate of another church in secret from, one supposes, the church leadership of this church. And my question was, how often did they meet?

In the second, the engagement of legal coun[sel] to advise the Presiding Bishop of matters in the Diocese of South Carolina, the "sauce" is quite different. There seems to be no question that the Bishop of South Carolina knew that there was legal coun[sel] from the PB's office. There was apparently a meeting between the Bishop and the Presiding Bishop in which they disagreed about the actions she took and the role she understood was hers. There may be serious disagreements about the canonical propriety of her actions, just as there are serious questions about the nature of the canonical changes effected in the Diocese of South Carolina. Those are arguments to which the Curmudgeon has given considerable attention. But that "sauce" is one of possibly bitter disagreement, not subterfuge.

Let me here explain why I have added the various italics above:

. . . namely the Archbishop meeting secretly with people who were clearly unwilling to be in a church they deemed doomed . . .

Hindsight is a wonderful tool, is it not? I question very seriously whether those who met with the Archbishop of Canterbury in 2003-2004 were from the outset convinced that they were "in a church they deemed doomed" -- and by using those words, the Rev. Canon Harris admits that the people in question were still (at the time) in the Episcopal Church (USA). They were, entirely appropriately, looking for support and assistance in their travails brought about by the very people who have dominated ECUSA's leadership since 2003 -- and who better was in a position to advise them of the possibilities they faced than the Archbishop of Canterbury? After all, he had been unequivocal in warning ECUSA, with the full support of all the primates of the Communion behind him (including Frank Griswold!), what would be the irreversible consequences (i.e., would "tear the fabric of our Communion at its deepest level") of its proposed actions in consecrating V. Gene Robinson as a bishop of ECUSA. So, "clearly unwilling", Fr. Harris? In your hindsight, perhaps; but that is not a substitute for the travails and worries they faced at the time they sought help.

. . . it involved someone not of this church entering into deep conversations about ways to either change this church or replace it . . .

As much as I regret having (again) to take issue with a fellow Episcopalian, I think it is largely when we expend the time and the concern to bring our disagreements into sharp focus that we have a chance of preventing further disagreements from careless communication. The last I looked at its Constitution, the Episcopal Church (USA) professed to be in communion with the see of Canterbury. So to hang one's hat on the argument that the Archbishop of Canterbury is "not of this church" is to deny the full reality of the situation. Indeed, in the same technical sense one could argue that the ABC is not "of" the Episcopal Church (USA), one could equally well pretend that the Presiding Bishop of ECUSA is not "of" the Diocese of South Carolina -- except to the extent that the Bishop of that Diocese invites her to be. (She has no right, for instance, to force her way through the door, or to perform any episcopal act, at any location in that Diocese without the consent of its ecclesiastical authority: it says so right in Article II, Section 3 of ECUSA's Constitution -- which was not, I hasten to add, modified or changed in any way by the adoption of new canons [Title IV] at GC 2009. Canons are inferior to the Constitution, and have no ability to alter or amend Constitutional provisions.)

In any case, the charge that the ABC talked with the dissenters "about ways to either change this church or replace it" is sheer speculation on Fr. Harris' part, since he did not partake of the reported conversations. As this chancellor recollects events at the time, the news of the meetings which came out shortly afterward was that the ABC endorsed (or at least did not actively oppose) the creation of a network of clergy and parishes which supported the resolutions of the Anglican Communion, including specifically Resolution 1.10 of the 1998 Lambeth Conference, which ECUSA in 2003 deliberately chose to flout. Encouraging supporters of tradition to join forces is hardly a "change" in the church -- it was members such as Father Harris, who enthusiastically supported the ordination of Bishop Robinson, who were thereby changing, all of a sudden, the traditions which the Church had theretofore (for over two hundred and ten years!) observed. And as for replacing the Church -- in 2003-04? Please. That is just so much projection, bolstered by hindsight in light of what Fr. Harris fears is happening now -- after ECUSA has stubbornly persisted in its course, which continues to be at odds with the vast majority of the Communion. After eight years of its obstinacy, the regret is that the Communion has finally done nothing toward replacing ECUSA's "Anglican" franchise -- and that is the source of all of the current dissatisfaction which Fr. Harris discerns (including, frankly, my own).

In any case it was an intervention in the life of this church by a prelate of another church in secret from, one supposes, the church leadership of this church.

Only in your retrospective projections, Fr. Harris. As noted above, what was going on in 2003-2004 was the Archbishop agreeing to provide pastoral counseling and advice to those who felt most threatened by the course ECUSA was taking, before anyone knew what the Windsor Report would recommend -- let alone what the Communion (or its Primates, or the Lambeth Conference, or the Anglican Consultative Council) would decide to do with its recommendations.

In the second, the engagement of legal coun[sel] to advise the Presiding Bishop of matters in the Diocese of South Carolina, the "sauce" is quite different. There seems to be no question that the Bishop of South Carolina knew that there was legal coun[sel] from the PB's office.

Fr. Harris here conveniently glosses over entire parts of Bishop Lawrence's address to his convention -- in particular, this part (quoted in my original post, but now with italics added):

In December of 2009 our Chancellor, Mr. Wade Logan, was finally informed by a local attorney that he had been retained by the Presiding Bishop’s Chancellor. In a subsequent series of letters he presented himself as “South Carolina counsel for The Episcopal Church” and requested numerous items of the Bishop and Standing Committee, as well as information regarding parishes in this diocese. This way of presenting himself fails to acknowledge that this diocese is the only recognized body of The Episcopal Church within the lower half of South Carolina. . . Furthermore, this was carried out without the Presiding Bishop even so much as calling me. . . .

Fr. Harris chooses to dwell upon the much later event, when Bishop Lawrence finally chose to confront Bishop Jefferts Schori directly with what he had belatedly found out, without her so much as informing him beforehand, about what she, in secret consultation with her Chancellor, had decided was necessary in his (Bishop Lawrence's) own Diocese: to hire a special investigative counsel to probe into diocesan affairs and the Bishop's own conduct vis-à-vis his clergy, with a view to gathering information that could be turned into charges against Bishop Lawrence -- eventually justifying a resolution of deposition (without a trial) on the ground that he had "abandoned the communion of this Church." This was the same strategy of an "advance purge" which the Presiding Bishop and her Chancellor had effected with Bishop Robert W. Duncan of Pittsburgh, and it had the same result: it caused an acceleration of the measures taken by the Diocese of South Carolina to protect itself against interference ("meddling") in its internal affairs by the Presiding Bishop, without any authority to do so.

There may be serious disagreements about the canonical propriety of her actions, just as there are serious questions about the nature of the canonical changes effected in the Diocese of South Carolina. Those are arguments to which the Curmudgeon has given considerable attention. But that "sauce" is one of possibly bitter disagreement, not subterfuge.

Once again, I regret to have to disagree with you, Fr. Harris. The engaging of local investigative counsel in a Diocese without the knowledge or permission of that Diocese's ecclesiastical authority, without the bringing first of any formal charges, and in secret consultation with one's personal chancellor, is of the essence of what this church attorney, for one, dubs a "subterfuge."

On a final note, I am happy to acknowledge that Father Harris and I on occasion perfectly understand each other -- as, for example, when he concludes (emphasis again added):

I do believe . . . the struggle in The Episcopal Church is changing the role of the Presiding Bishop, as well as our common understanding of what it means to be in union with the General Convention, how that relates to [the] notion that dioceses derive their authority from a wider synodical context, and so forth. I disagree with almost everything the Anglican Curmudgeon writes, but I do agree with him that the changes matter. Our disagreement is about what they mean and what they portend.

The changes currently going on in ECUSA most certainly do matter; thank you, Fr. Harris. Where we disagree most is in how those changes have been brought about -- not by any current "struggle" in the Episcopal Church, for instance, but rather by pretending that new canons can alter -- just like that, as long as no one objects -- what Article II, Section 3 of our Constitution has provided ever since 1789.

(Note: the parallel language then was in the original Article IV.)

- END OF UPDATE 07/18/2011]

Debt Ceiling Follow-Up: Sanity Comes to the Senate

Senator Jeff Sessions (R-Alabama) took the floor of the Senate yesterday to announce his support for a highly sensible proposition: "There will be no 'unanimous consent' to allow votes on any appropriations bill until the Senate has first adopted a reasonable budget -- as the law requires us to do, in any event." Then he was joined by other Republican colleagues, who made the same point again and again: no votes to spend money until we have a framework -- a budget -- in which to put a limit on spending:

This is the way normal households take control of their finances. As one of the speakers stated, the Democratic majority in the Senate has not allowed a vote on a budget for 806 days -- more than two years. Is this any way to run a government? No matter what party one belongs to, one has to ask: who benefits from the lack of a budget?

President Obama refuses to offer a (balanced) budget; Senate Democrats refuse to offer a budget (balanced or otherwise); and that leaves everything to the Republican majority in the House, and the Republican minority in the Senate. Alone, they cannot get any legislation passed; but they can block proposals to spend without any budgetary limits. The media will try to excoriate them for doing so, but the people have to stick to fundamental principles. No spending without a balanced budget! Stop the madness, here and now!

Anyone who cannot support such a basic rule for government spending does not have America's best interests at heart. It is time to call our elected representatives to account for what they are proposing in the midst of this budgetary showdown. Whether Republican or Democrat, if they just want to keep spending without any controls or limits, they need to be blocked now, and voted out in November 2012.

The Farcical "Debt Ceiling Crisis"

If any proof at all were needed that our country is headed off a cliff, it would be the claims and fear-mongering surrounding the announced August 2 deadline to raise what politicians refer to as "the debt ceiling", in order to avoid a "default" on "our country's debt."

I have used all the quotation marks to signal where, in my view, the politicians have it exactly wrong. As usual, they are acting in their own self-interest (trying to ensure they will be re-elected), and not in the country's best interest.

It's time for a refresher: please review my earlier series of posts on "The People's Money." There you will appreciate these points:

"Money" is simply a name for some commodity (real, tangible physical good) that fulfills two basic functions: it is both 1) a neutral medium of exchange (to avoid the inconveniences of barter), and 2) (ideally) a store of value. (The latter is a hard concept to grasp, because money itself has no intrinsic value -- its worth, in the final analysis, is measured only by what one can buy with it -- and that does not include happiness.)

These two functions are inextricably intertwined: as a medium of exchange, money expresses at any given moment the value of any one commodity or service in terms of all others.

Example: If as an attorney, I charge $200 per hour of my time, and if the shoemaker charges $100 for a pair of handmade leather shoes, then in the market I share with the shoemaker, my time of one hour spent as an attorney is worth two pairs of his handmade leather shoes. (If it takes the shoemaker less than one hour to produce two pairs of shoes, then in the market we share, his labor is valued more than mine is.)

Next: viewed as a medium of exchange, the dollar has been a great success. One can travel the world over, and the dollar is instantly recognized in almost every market as a means of purchasing goods in that market.

However, viewed as a store of value, the dollar has been a dismal failure, as graphically conveyed by this picture:

And why is this the case? How can the dollar be such a success at the first function of money, and such a failure at the second, while still being accepted as money?

Answer: Because with the passage of time, America has become less a nation of savers and more a nation of spenders. This is nowhere more true than with our legislators, who are the biggest spenders of all (with other people's money).

When ordinary people spend every dollar they earn almost as fast as they receive it, they fail to notice, over long stretches of time, that their dollars purchase less and less for the same amount (particularly if their earnings are indexed to [go up with] inflation). There are scarcely enough people alive today to remember what a dollar could buy in 1913 -- and they certainly are not a major voting bloc.

But as our legislators spend more and more of money which is not theirs, they have to come up with the money from somewhere. They have just two choices: they can get it either from revenues (income and other taxes, customs duties, fees and the like), or from borrowing. (Since government has turned over the task of creating money to the Federal Reserve, it has no ability to print money on demand, as the Fed does.)

Notice that both of these sources of money for the government come from dollars already printed and in circulation (with one major exception, which I will explain shortly). You can thus think of government spending as akin to a giant vacuum, which sucks dollars out of people's hands, and out of the economy, to be spent as the legislators (and lately the president, too, since the former have abandoned their budgeting function) in their wisdom or folly direct.

The one exception I mentioned is when the government borrows money directly from the Federal Reserve, by selling it Treasury bills, notes, or bonds. In that sole case, the money received from the sale of its debt comes not from somewhere else in the economy, but out of thin air -- or rather, it is created in an electronic instant, with the pressing of a computer key. And when that happens, the supply of money in the economy inevitably goes up -- because there is no one in the entire country who spends their money as fast as the government does (think: millions of dollars per hour).

Every week, the Treasury holds an auction of the various instruments of debt it has decided to sell at that moment, and in that particular market. It is usually a mix of short-, medium- and long-term debt (T-bills, notes, and bonds, respectively), with interest rates set by the results of the auction. And now, here is the kicker: ever since 1957, week in and week out, month in and month out, year in and year out, the total amount of government debt has grown larger and larger, at an accelerating pace (click the graph to enlarge it):

What does the graph mean?

It shows that we have not paid down the national debt by any net amount for the last 54 years. We have been borrowing ever more and more, unceasingly (yes, even when Bill Clinton ran what he called a "surplus" -- see the table at this link). In the course of this spree, we have saddled future generations with more debt in just the last seven years than in the entire first 214 years of our existence.

And you wonder why the bankers are doing so well in the midst of a depression? They thrive on the country's debt -- they make money lending the government's own money to it, and then they make even more money borrowing money from the Fed at practically a zero percent rate and then lending that money still further, at market rates.

Think of it this way: in a country with a fiat (paper) currency, all money is debt. Every single dollar printed and circulating was created by someone's promise to pay -- if not your promise to the bank, or your employer's promise to you, then by the government's promises to the banks and all the rest of us. Our entire economy is based, at bottom, on promises.

The problem is simply this: our promises to pay are not the same as the government's promises to pay. When we promise to pay back a loan, or to pay one of our employees, we can do so only by earning the money through some means connected with our livelihood -- either by working for it, by producing and selling things for it, or by giving up some return on investments for it.

When the government promises to pay us, however (e.g., Social Security benefits when we turn 66), it cannot fulfill that promise except, as explained above, by taking that money from someone else: either it taxes them, as all current payrolls are taxed to pay for the Social Security benefits which government is now paying to retired workers (whose own Social Security withholding long ago was used to pay workers who had retired before them), or it borrows the money from lenders, at interest.

There are two eventual limits on this process: for taxation, there is the Laffer Curve -- the point at which ever higher and higher rates produce lower and lower gross revenues, as people structure their activities and transactions so as to avoid confiscatory taxes; and for borrowing, there is bankruptcy -- the point at which people perceive that you are insolvent, and so stop lending you money, no matter how much interest you promise to pay. The once-great United States of America is now approaching both of these limits.

The current politicians' solution to this crisis? Move even closer to triggering the limits. Continue doing what we have been doing: raise the authorized borrowing ceiling so we can borrow even more, and (for Democrats, at least) raise taxes so we can spend even more.

Raising taxes will simply not stop runaway spending: the debt chart above is proof that, despite all the fluctuations in the tax rates between 1957 and today, borrowing in addition to taxes never stopped, not even for one minute. People who contend that the "rich should pay their fair share" are ignoring that the "share" they want the rich to pay is actually infinitesimal in relation to the total spending. Go back to the Debt Clock page: government spending for the current year is $3.6 trillion and climbing, while the entire fortunes of the wealthiest Americans amount to mere billions. The total value of all privately held assets in the country (business and household) is over $75 trillion, but the total amount of unfunded government liabilities is close to $115 trillion. That means the government could confiscate every single asset owned by every citizen and business in the entire country, and still be committed to pay more than ten times what it is spending each year now, with no means to pay for it!

Do you see now why we are at a breaking point? To postpone the catastrophe that looms ahead will do nothing to alleviate it when it comes, but will just make it that much the worse.

Everyone individually can understand that spending more than one makes is a recipe for disaster -- so why is it so hard to grasp that the same truth applies to our government? (Perhaps because it is hard to understand, when you are a rat, why you might want to stop gnawing at a ship that is leaking. You are just doing what you do, after all.)

Raising taxes is not the solution, and raising the debt ceiling will simply put off the inevitable. So I say: when the Treasury finally runs through all of its fiscal bag of tricks this next August 2, and can no longer create temporary head room by robbing one more pension fund, let it stop borrowing! Let it not sell a single penny more of debt!

The worst thing we will have to endure, if the debt limit is hit, is all the attempts at finger-pointing that will go on, among politicians and in the worthless media, which have done nothing to educate the public about what is coming. (The media reminds me of Job's so-called friends, standing around him and chattering away about what a bad person he must have been to deserve such terrible boils and blisters and disasters.) President and Mrs. Obama will have to cancel a few vacations, and may have to lay off some of their bloated staff. If the President instead keeps his vacation plans and his staff, but stops sending out checks to veterans and to pensioners, then he will finally have made his priorities clear, won't he? And I hope that such clarity will result in his never being elected again to any office of public trust.

Even if we have a "default" (the quotes are there because it will not be a complete default on all outstanding obligations at the same time, but a running one, while the President and the Secretary of the Treasury decide what bills to pay, in what order), there is no guarantee, under our current fiat monetary system as described above, that we will not in a few years, return to the same old bad ways of letting the politicians promise us more in spending than there is actually to spend. But there is a better solution to the problem, which if implemented, would make the government's budget self-regulating. And that will be the subject of the next post.

The Current State of (Dis)belief

It may depress you to experience what passes for serious debate between atheists and believers on the Internet these days, but if you are strong in your faith, you will survive the experience and be even stronger than before. So if you are of a mind to try it, take these steps:

1. Read about the ongoing Ideological Turing Test at this link. (Submissions on the atheist part of the exercise will be accepted until tonight at midnight. The Christian part of the test will be ongoing for the remainder of this week.)

2. To learn more about the atheist blogger (who constantly argues with her Catholic boyfriend!) who decided to try to carry out this exercise, read her post here, and check out some of her threads at this link.

Now, keep in mind as you read the above that Leah and many of her commenters are college students. They are still struggling with what questions to ask, let alone deal with the proper answers. At the same time, they are convinced they have already heard everything (from Norman Geisler's apologetics to Sam Harris' extended rants) worth saying on the subject, and that there can be nothing new under the sun.

What I find initially depressing about Leah's exercise is that it reduces faith or belief to a matter of debate -- as though rational argument ever convinced anyone of Christianity's truth, without some accompanying element of grace. But then I go behind the exercise, and realize that it can be healthy for one's own faith to try to state the arguments for the contrary view as best as one humanly can. So on balance, reading the responses of the "atheists" to the questions depressed me, but then realizing that there was a real living soul behind each of them, struggling for the light, I came away strangely refreshed.

Until I happened on Ilya Somin's post about the Ideological Turing Test at the Volokh Conspiracy -- a blog with many more readers than Leah's, or this one. That short post had drawn 226 comments when I last checked, and reading through the comments really depressed me about the ability of Christians to defend their faith to non-believers. Here's a typical exchange:

zuch says:

G.R. Mead:

[G.R. Mead]: ... if the Resurrection is not real then we are, of all men, the most to be pitied.

[zuch]: How about “laughed at”? Would that be more pleasant for you?

In honored tradition — please be my guest.

What do you find funny? Or does your plan work out better ?

My “plan”, such as it is [or isn’t, as the case may be], works out better than yours, wasting your affections and efforts (and probably money) on some fictitious sky pixie. Why I should pity you when you voluntarily choose such behaviour is beyond me. If there is no Resurrection, no skin off my nose.

G.R. Mead: This is what it comes to. You have not actually faced the reality of a conviction that there is nothing, then an accidental existence, and then nothing. Neitszche did — and look how he turned out. In a world that is thus — there is no reason, literally, no rational basis — to do anything but take any risk, do any harm to others, that may be necessary to find maximum pleasure in this life. Oh sure, maybe you have some hormonal surges evolution programmed to trick you into maximizing fitness as a social group — but that just some illusion bred by your blind and selfish genes of which you are the mere tool. If you are rational you should rise above all of that an consider reality in its true face. Blackness then a flash of awareness and then the black and nothing else. Get what you can — while you can.

You’re not only a philosopher par extraordinaire, you’re a geenyus and a mind-reader as well. I fart in your general direction.

Why you think I have not faced your own personal daemons is beyond me. They’re your boogeymen, and I think you ought to deal with them yourself and not insist that I need to do this, so that you can feel that you’re not so much the scared little man that you are.

And you seem to think that I must either follow the dictates of [your] religion, or else be a totally amoral person. Why you think this is beyond me. You seem to think that an atheist must ‘logically’ indulge in hedonism, nihilism, and selfishness. Not so. But ‘logically’, you as a religionist must put homosexuals and sassy kids to death, kill the entirety of the menfolk in other tribes and rape their women, turn your wife out of the house and city if she’s menstruating, offer to kill your own son if asked by ‘sufficient authority’, and any number of things that I find personally appalling from a moral perspective. Other religions think that killing infidels is a grand thing. That’s the ‘morals’ that you have chosen. Thanks but no thanks.

And if you want to insist your genes make you do things, go for it. But isn’t that blasphemy?

Cheers, (Quote)

July 11, 2011, 9:58 pm

So is there hope for this world? As long as debate and argument about religion continue, there can always be hope. But blogs are singularly unsuited as places where such exchanges can take place and be meaningful.

After this morning's excursion through the blogworld, I have truly come to appreciate the wisdom in the old saw:

A good example is the best sermon.

The Episcopal Church as Rebellious Teenager

While cruising through the morning's news, I came across a link (h/t: Thinking Anglicans) to a piece published at the Huffington Post, and authored by none other than the Canon to the Presiding Bishop, the Rev. Canon C. K. Robertson, Ph.D. It seems that Canon Robertson is an official visitor from ECUSA to the current meeting of the General Synod of the Church of England (July 5-13). He took the occasion to remind his English hosts that the Episcopal Church (USA) is "independent but connected", as far as its relations with the Anglican Communion are concerned. He began with the official 815 Capsule Version™ of our Church's history:

The Rev. William White spent several years with the group we now know as the Founding Fathers. As chaplain to the Continental Congress, he met with them, dined with them, swapped late-night stories with them (his next-door neighbor was Dr. Benjamin Rush, signer of the Declaration of Independence). White's unique role gave him a front row seat to the debates of John Adams, Benjamin Franklin, Thomas Jefferson, and the rest concerning the single most important issue of the day: independence. How could a collection of British colonies live into a new reality as a united, self-governing nation? How could they maintain the best of the values they had inherited while creating a new system that would fit their context? As they deliberated, White listened ... and learned.

White was also an ordained Church of England minister. Having witnessed firsthand the birth of a new Republic, he turned his attention to the labor pains of a Church that could no longer be "of England" in name or composition, but neither could it be wholly unfamiliar. Through the Constitution that White wrote for this Episcopal Church, as it would become known, he helped create "a church government that will contain the constituent principles of the Church of England, and yet be independent of foreign jurisdiction or influence." Actually, this was no newborn he was helping along, but rather an adult child ready to strike out on its own, leaving the nest and creating a life separate from the expectations of its parent.

An "adult child"? If that phrase accurately describes the nascent Church at the end of the eighteenth century, then how, pray tell, does one account for its 21st-century regression to being a rebellious teenager? Let's face facts: the Episcopal Church (USA) has done more to snub the Anglican Communion than any other single church among its members: for references, see this post, this post, this post, and many more at this page. (In fact, the Presiding Bishop went out of her way to make the snub personal to the Church of England itself.)

The Rev. Canon Dr. Robertson continues with his history lesson for the erudition of the Brits, and draws a most inapt parallel with early church beginnings:

That parent, unsurprisingly, did not immediately embrace its child's new status. White used the term "Episcopal," the Greek term for "bishop," to describe this entity, and yet he could not convince Church of England leadership to consecrate indigenous bishops for the fledgling Church. In some ways, the situation was not that different from what was experienced by the first-century believers in Antioch, who desperately wanted the support and connection with the "mother Church," but at the same time were taking steps in their own governance and mission that reflected their geographic and ethnic context, and therefore looked quite different from what the Twelve had started in Jerusalem. Even so, while the English Church used the appointment system to propagate its ecclesiastical hierarchy, American bishops, said White, would be elected . . . and not simply by clergy, but by lay representatives as well. [Obligatory reference to ECUSA's unique polity omitted.] And in a land where there would be no king, neither would there be an archbishop. Rather, the head of this new Church would be a Presiding Bishop, reflecting the principles of the young republic in which this Church had taken root.

Frankly, I find it impossible to reconcile the good Canon's version of our Church's history with the known facts. There was no "Presiding Bishop" created by the founding documents to be "the head of this new Church", much less a lead bishop "reflecting the principles of the young republic" -- see the details about the gradual establishment of that office, and its subsequent mushrooming into its current form, in this earlier post.

Moreover, the Church of England and its bishops were emphatically not unwilling to "embrace [their] child's new status." They simply had to eliminate certain procedural hurdles, and to iron out a few doctrinal differences, before they could proceed with consecrating an American bishop, all as explained (in painstaking detail -- which I know for many readers is the bugaboo of this blog) in this post, in which there are full links to all the historical documents. There, one will learn, for example, that far from being unable to "convince Church of England leadership to consecrate indigenous bishops for the fledgling Church", the Rev. Dr. White was one of the first two American bishops to be consecrated by the then-Archbishop of Canterbury. That august official, together with the Archbishop of York, went to great lengths to accommodate the desire of the "fledgling Church" to have proper bishops to lead it, and to ensure that it was truly a church founded in the image of the Church of England, if not under its jurisdiction.

It was the Archbishops who successfully pushed the legislation through Parliament to enable them to consecrate foreigners as bishops without requiring them to subscribe to the Oath of Supremacy, by which all new ordinands acknowledged the monarch as the head of the established Church. It was the Archbishops who pored over the proposed new Book of Common Prayer for the American Church, and made numerous changes to bring it into doctrinal conformity with its English counterpart. And it was the Archbishops who specified the multiple attestations and letters of reference which they required concerning the moral and godly character of those whom they were being asked to consecrate. In the light of these facts, I would scarcely want to write, as does Canon Robertson (I have added the bold, to show you what I mean):

Through the years, misunderstandings and differences have continued. Oscar Wilde's famous maxim about two peoples separated by a common language has proven true for the Anglican Churches in these lands. It is not simply that different decisions made by one Church are often frustrating to the other. No, it is the difference in processes by which decisions are made in the respective Churches that can mystify and exasperate. Our directness can at times seem to be overly bold and unilateral, while the more nuanced ways of our transatlantic colleagues can appear heavy-handed and non-transparent. Singularly unhelpful labels such as "cowboy diplomacy" or "backroom politics" can prevent the real possibility of mutual understanding and appreciation of both Church's distinct contexts. At its worst, there can be now, as in William White's time, a refusal to see God at work in the other's polity and policies. Different does not have to mean deficient. And if we can let go of the infallibility of our opinions about our own context, perhaps we could learn from the other.

To my ear, this sounds just like the proverbial teenager talking back to her parents: the multiple "misunderstandings and differences" over the years, the "different decisions" made that are "frustrating" to each other, the unwillingness to see or appreciate how different from them she really is, and how she really, really needs her independence just now. How different ECUSA sounds now from the Church that first appealed to the Archbishops for assistance in these humble words:

Our forefathers, when they left the land of their nativity, did not leave the bosom of that Church over which your Lordships now preside; but, as well from a veneration for Episcopal government, as from an attachment to the admirable services of our Liturgy, continued in willing connection with their ecclesiastical superiors in England, and were subjected to many local inconveniences, rather than break the unity of the Church to which they belonged.

When it pleased the Supreme Ruler of the universe, that this part of the British empire should be free, sovereign, and independent, it became the most important concern of the members of our Communion to provide for its continuance. . . . [I]n accomplishing of this . . . it was nevertheless their earnest desire and resolution to retain the venerable form of Episcopal government handed down to them, as they conceive, from the time of the Apostles, and endeared to them by the remembrance of the holy Bishops of the primitive Church, of the blessed Martyrs who reformed the doctrine and worship of the Church of England, and of the many great and pious Prelates who have adorned that Church in every succeeding age. But however general the desire of compleating the Orders of our Ministry, so diffused and unconnected were the members of our Communion over this extensive country, that much time and negociation were necessary for the forming a representative body of the greater number of Episcopalians in these States; and owing to the same causes, it was not until this Convention that sufficient powers could be procured for the addressing your Lordships on this subject.

The petition which we offer to your Venerable Body is, that from a tender regard to the religious interests of thousands in this rising empire, professing the same religious principles with the Church of England, you will be pleased to confer the Episcopal character on such persons as shall be recommended by this Church in the several States here represented, full satisfaction being given of the sufficiency of the persons recommended, and of its being the intention of the general body of the Episcopalians in the said States respectively, to receive them in the quality of Bishops.
. . .

Whatever may be the event, no time will efface the remembrance of the past services of your Lordships and your predecessors. The Archbishops of Canterbury were not prevented, even by the weighty concerns of their high stations, from attending to the interests of this distant branch of the Church under their care. The Bishops of London were our Diocesans; and the uninterrupted although voluntary submission of our congregations, will remain a perpetual proof of their mild and paternal government. . . . Our hearts are penetrated with the most lively gratitude by these generous sentiments; the long succession of former benefits passes in review before us; we pray that our Church may be a lasting monument of the usefulness of so worthy a body; and that her sons may never cease to be kindly affectioned to the members of that Church, the Fathers of which have so tenderly watched over her infancy.

For your Lordships in particular, we most sincerely wish and pray, that you may long continue the ornaments of the Church of England, and at last receive the reward of the righteous from the great Shepherd and Bishop of souls.

We are, with all the respect which is due to your exalted and venerable characters and stations,

Your Lordships Most obedient and Most humble Servants,

SIGNED BY THE CLERICAL AND LAY DEPUTIES
OF THE CONVENTION.


IN CONVENTION:
Christ Church, Philadelphia.
October 5th, 1785.

Now that is a remarkable document for all the deputies to the new Church in America to have signed, is it not? And in case you are not following me yet, let me make the point as plain as I can.

Begin by looking at this typical allegation from a lawsuit brought by ECUSA and one of its dioceses against a parish which had the temerity to see things "differently" from them, and to vote to withdraw from the diocese (San Diego, in this case):

33. In 1973, after the geographic territory that included San Diego County became part of the newly-formed Diocese of San Diego, the mission congregation at St. John's sought permission from the Diocese to become a parish. In their application, the representatives of the prospective parish promised that St. John's Parish would be bound by and conform to the Constitution and Canons of the Episcopal Church and the Diocese.

34. In consideration for promises of subservience to the Constitution and Canons of the Diocese and the Episcopal Church, the Diocese admitted St. John's Fallbrook as a Parish at the Primary Convention of the Diocese on December 7, 1973.

When it goes into court, ECUSA always makes this argument: that by making a promise to a diocese, in the process of being admitted, that it will be forever bound by whatever canons and constitutional provisions the national Church sees fit to adopt (no matter how far into the future), every new parish becomes perpetually subordinate to it, and must adhere to its promise no matter how much it disagrees with where the Church is going.

Perhaps, however, it is time to turn the tables on ECUSA, and cite in response the promise it made solemnly to the Church of England in order to get the latter to consecrate its first bishops. Look at this passage from the letter quoted and referenced above (page 44 of the book at this link; emphasis added):

We are unanimous and explicit in assuring your Lordships, that we neither have departed, nor propose to depart from the doctrines of your Church. . . .

In sum: the Episcopal Church (USA) should expect its parishes to keep their promises only when it sets the example, by keeping its own. It claims to have made its promise when it was an adult child -- so why is it now acting like a teenager?