Should we pay our debts?

Should we pay our debts?

On 7/15/2011, "Real Time With Bill Maher" described the debt ceiling issue as one party -- the republicans -- saying that we should not pay our bills.

I'm aware that this is humor. But that's a little extreme. Lets look at it better.

Both parties say "Pay our bills". One party says "And, lets increase our income so we can pay future bills". The other says, "And, lets reduce our spending so we don't have future bills to pay".

The problem? Those "future bills" are things that the U.S. government has promised to pay.

Democrats want to pay all bills, both those that we've already gotten the billing invoice for, and those that we owe but have not yet gotten the paper work for. This is pretty close to Accrual accounting -- you incur a debt when it happens, regardless of when it is due or when you get the paper. The republicans, on the other hand, want to treat things as cash accounting -- if you haven't gotten the bill yet, then it isn't a debt.

An open letter to President Obama -- How to solve the national economy and debt limit

An open letter to President Obama:

Mr. Obama:

I am writing to talk about the debt crisis. I understand that many programs are referred to now as "Entitlements", and that this has become a bad name.

I want to give them another name: Promises to pay from the government.

And yet another name: Just compensation for a past taking.

You are a lawyer. You know that the taking of private property (including money) for the public good (including retiring older workers to make sure that newer workers have job opportunities) without just compensation is unconstitutional. The federal government has engaged in a taking, and has undertaken a promise to pay. The federal government has no authority to reduce the payment without risking lawsuits about just compensation for a forced taking (social security is an example of a forced retirement and disability insurance program). For all the talk of forcing people to engage in private insurance, consider that if the federal government cannot keep its insurance promises, why would anyone expect private insurances to keep their promises? (And look at Katrina, Louisiana, and the private insurance companies there).