A leadership default


Tom Mullins

Article I, Section 7 of the Constitution reads, “All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.” Article I, Section 8 reads that the Congress shall have the power “To borrow Money on the credit of the United States.”

Some have proposed that the president can authorize the U.S. Treasury to raise the debt ceiling unilaterally under Section 4 of Amendment XIV to the Constitution, which reads, “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” Proponents of this solution fail to read Section 5 of Amendment XIV, “The Congress shall have the power to enforce, by appropriate legislation, the provisions of this article.”

As a representative democracy, we the people have given authority to our elected representatives, specifically House members, to govern and make the difficult decisions required to maintain the full faith and credit of our nation. The can we have kicked down the yellow brick road is more worn than stimulus-funded resurfaced asphalt. One of the $350,000 federally funded snow plows may have eaten the can.

Since politicians are always thinking of the next election, they need a reminder from you that they must balance both sides of the ledger. There are not enough millionaires and billionaires available to confiscate their wealth.

The House passed “Cut, Cap and Balance,” aka HR 2560, a 10-page bill that proposes to cut spending in FY2012 by $ 111 Billion. Exemptions were included for Social Security, Medicare, veteran’s benefits and interest on the nation’s debt. The cap includes limitations on spending as a percentage of the nation’s gross domestic product (GDP) and a requirement for a two-thirds majority vote to approve any tax increase.

The balance includes a balanced budget amendment to the Constitution while raising the nation’s authorized credit card limit from $ 14.3 trillion to $ 16.7 trillion.


The “gang of six,” three Republican senators and three Democrat senators, propose changing the definition of the Consumer Price Index (CPI), wherein “savings” will occur in out years by reducing the growth of expenditures and additional future unspecified gamesmanship. Enhanced revenue, read that as tax increases, are proposed but left undefined. And where is the president of the United States in this debate? What field is he playing on? I forgot, the golf course since we have an election coming up.

What leadership requires

Leadership requires honest communication that the federal government is spending almost $2 for every $1 collected in tax revenue. The June 2011 monthly deficit was $43 billion. Leadership requires telling seniors that politicians have overpromised and likely will create a system where your Social Security check will increase, albeit very slowly, not as quickly as prices will rise. Leadership requires informing citizens that the U.S. Treasury is buying back our own debt from foreign banks and Wall Street, merely days or weeks after these entities finance our spending spree.

Leadership requires telling the American people that paying back the principal on the nation’s credit card has not even been discussed. Leadership requires telling the American people that interest rates will rise, and paying the interest on our nation’s debt will become more difficult. Leadership requires addressing inflation through proposing balancing revenues and expenditures, not as a historic percentage of GDP (which continues deficit spending), but in real terms.

We must reduce FY2012 spending by $1.3 trillion. This can be done.

Leadership requires promoting and encouraging personal responsibility, not creation of a new commission to study or recommend changes. Leadership requires telling the American people that they were fooled by Congress when they claimed $100 billion in savings when the FY2011 budget was finally approved. Leadership requires telling the American people that we have borrowed the money in the Social Security Lock Box and the money in the Federal Employees Retirement Lock Box to give the appearance of normalcy.

Leadership requires telling the American people the “pay as you go” model on entitlements must be reformed. Leadership requires passing a bill in New Mexico to adjust the Medicare and Medicaid eligibility requirements. Leadership requires telling the American people that every dollar in tax revenue collected by the government to be redistributed or spent for collective good is one less dollar employed in the private sector where jobs are created.

We have a default not in the American people, not in our full faith and credit, but a default of leadership in Washington. This default in leadership on both sides of the aisle will cause great changes to occur, changes in the future role of government and a reawakening in the individual power and resilience of the American people.

Tom Mullins is a Farmington resident, professional petroleum engineer, and former candidate for New Mexico’s 3rd Congressional District.

17 thoughts on “A leadership default

  1. stever and Dr. J., I can hardly deny that the face value of money is the face value of money; a dollar is a dollar, and its purchasing power is whatever a dollar will buy. But the value of dollar to the possessor depends on how many other dollars he or she has. Diamond Jim Brady is reputed to have lit his cigars with $100 bills; I doubt anyone making $10,000 a year would do so. The rationale for progressive tax rates reflects this well-known fact. I am not advocating any particular rate structure, but there used to be more rates and higher ones. I believe that shortly after the Second World War, the top rate was 90 percent, and pent-up demand made the economy boom; and, as late as the Vietnam War, it was 70 percent, and the world oil crisis retarded the economy. My guess is that tax rates have little to do with economic robustness and less to do with job creation.

  2. Your comment about the taxes paid by the top 10 percent commits the fallacy of distribution. In the aggregate, the top 10% pay a disproportionate amount of taxes. But the individuals in that aggregate do not–unless, of course, you believe that the value of money to its possessor is the same no matter how much or how little money he or she has, and that a flat tax, usually understood because of value-of-money theory to be regressive, is the only fair tax. Such a belief itself imposes a view of what is fair on others. Et tu!

    So Dr. Hays if I attempt to translate your comment into plain English, am I to read it that $10,000 to a person making $100,000 is not as valuable as it is to a person making $40,000? How does the value of money reflect what is put into earning it?

  3. Dr. Hays, using 2008 tax year data, the top 10% of earners paid 70% of all federal income taxes. The threshold to be in that “elite” group was $113,799.00 AGI. Now, you are saying that a dollar has a different value to someone making say $50,000 vs. someone making say $150,000? A dollar is a dollar, of course a multi-millionaire cares less about it than someone making $50,000, but the absolute value and buying power is the same. I said nothing of a flat tax, I think that is a bad idea, as I believe taxes should be progressive, the more you make the more you should pay. I am just saying that to assume the top 10% are not paying their “fair” share is bogus, subjective, and ludicrous. If you don’t think out tax system is progressive, then what is wrong with it? It looks progressive to me if you look at the rates paid by income. But when I see the top 10% paying 70% of all taxes to the federal government, and the bottom 50% paying 3%, I would say there is something wrong here but the answer is not to have the top 10% pay much more, that is illogical.

  4. Dr. J.,

    Your comment about the taxes paid by the top 10 percent commits the fallacy of distribution. In the aggregate, the top 10% pay a disproportionate amount of taxes. But the individuals in that aggregate do not–unless, of course, you believe that the value of money to its possessor is the same no matter how much or how little money he or she has, and that a flat tax, usually understood because of value-of-money theory to be regressive, is the only fair tax. Such a belief itself imposes a view of what is fair on others. Et tu!

  5. I would just like to know when one U. S. oil company or one of their employees is going to starting behaving like an American Patriot.

  6. The Cut, Cap, and Balance act doesn’t even touch the entitlement programs and makes a measly $111 billion cut for FY 2012.

    We can’t continue borrowing and printing money forever. To think so is completely self-destructive. What’s the point in getting your social security check if you can’t buy anything with it because the dollar’s been devalued so much?

    Besides that, they’re have been many options on not touching those who are retired or near retirement since they have planned for and become dependent on the system at no fault of their own. But the fact of the matter is the system is unsustainable and ineffective. Why can’t people have the option to opt out? To force the younger generation to keep paying into a system they will never be able to participate in is pure thievery.

    The top 1% pay more to the income share than the bottom 90%. http://www.taxfoundation.org/files/fed_incometax_ff183graph3-2.jpg

    Those making more the $250,000 pay 35%. So it takes them 4 months out of the year to pay off the government the fruits of their labor. And you want to increase this?

    The bottom 50% don’t even pay income taxes. Again, what exactly is fair share? I don’t quite understand it when people keep saying “fair share”.

    We need to dramatically decrease the size of government, not attempt to maintain its size through a reckless monetary policy, high taxation, and borrowing. It goes against common sense if you think we can just stay the course without any reforms whatsoever other than “tax the rich”. It goes against economic sense and in the end everybody will be poor, and no one will get their checks from the government.

  7. HR2560, the “Cut, Cap and Balance” act would create a Constitutional Amendment to create a balanced budget, with no chance for debt spending. If that had been in place in 1939 to the present, we woudl be ruled by Nazis,and all speaking German. The federal government must also consitutionally protect us from foreign wars. Is that what you want, Mr. Mullins, the inability to protect our borders in times of war?

    Why are you now calling for this when within the last ten years, two wars were begun without any legislative funding to pay for either war? It was fear, scare tactics that allowed most Americans and most of Congress to be deceived into believing that those wars were needed. Now you are trying to create fear again. Well, I don’t believe , never have beleived in using fear to govern. So you will have to use more fiscally sound reasoning to convince me.

    Rahter than even have a debt ceiling, why not eliminate it altogether, like most European countries do,and allow a fiscally responsible Congress to pass bills that protect our financial, environmental, and natural resources?

    HR2560 would also decimate entitlments, thereby gutting the Social Security retirement safety net all us senior citizens have paid into all our working lives, leaving us without sufficient incomes to meet even basic bill paying abilites. Gutting our Medicare and Medicaid that pays for our medical needs would deprive us senior citizens and the disabled our basic medical needs, thereby causing untold suffering, even unnecessary deaths. We senior citizens paid our taxes, worked all our lives responsibly, voted, and now you want to deprive us of our well earned retirement years.

    You forget that several weeks ago, hundreds of millionaires and billionaires signed a letter requesting the federal government to reform the tax code, allowing them to pay more, as they have the means to do so without causing suffering of the poor and middle classes.

    Your criticism of the President seems to negate the separation of powers which is basic to our Constitution. It is the Congress that must legislate with real courage and leadership on budgetary matters.

    Democracy is messy, yes, but compromise is vital to governing in a democracy. Responsible leadership includes bipartisan efforts in times of real crisis, not the contrived crisis currently being played out concerning raising the debt ceiling. Misplaced blame does nothing to solve a problem, neither does citing only portions of the Constitution. Read it all, Sir. Then, respect your elders, who have provided not only your present life of freedom to criticize, but the very ability to do so by keeping our country free from foreign invasion before you were born.

    Finally, if there is no responsible legislative action to prevent rasing the debt ceiling by August 2, are you wiling to advance those of us on Social Security enough money to pay our monthly bills, or is it your intention to ruin us financially within one month, just to further your idealogical agenda? Coming down to the wire, we need an alternative if you bring down the government on the backs of the poor, disabled and the elderly. Real leadership would not allow such unnecessary but brutal suffering.

  8. aNMDem, since the top 10% of earners pay the vast majority of all federal income taxes, how much more is their “fair share”? They already are paying for all this government we don’t need, so should they pay for 100% of all government? Is that “fair” in your mind? Do you think a country where 10% pay for everybody else is a healthy society? Sorry, your idea of “fair” is not mine, which is what makes anyone having the audacity to want to push their definition of “fair” on everyone so ludicrous.

  9. “Leadership requires informing citizens that the U.S. Treasury is buying back our own debt from foreign banks and Wall Street, merely days or weeks after these entities finance our spending spree.”

    Mr. Mullins, is your statement above really a true statement? Is it not true that The Federal Reserve Act of 1913 created a private corporation? Is it not true that the Federal Reserve loans money to the U.S. government (and other governments)? Is it not true that the Federal Reserve Board bought 92% of China’s U.S. Treasury note holdings in the year of 2011? Is it not true the Federal Reserve Board owns and possesses more gold than any other entity in the world? Is it not true the Federal Reserve Board owns more U.S. government debt than any other entity in the world?

    Mr. Mullins, is it not true the present debt crisis portrayed by the media is really a push by the Federal Reserve Board so that we can pay the Federal Reserve Board interest so that they can loan us some more money that we must pay them interest for—computer generate digital money that they in fact created out of thin air or with the push of a computer key? Is it not true the Federal Reserve Board, a private corporation, is our largest debt holder?

    This is what leadership needs to inform us of. We are paying interest on a revolving door.

  10. Great article. I concur. We need to reign in government back to reality. The problem is the government spends too much, period.

  11. I agree with “aNMDem.” Mulllins’s idea of leadership is telling everyone but the rich to eat spinach while encouraging the rich eat sirloin. It is not an exercise of leadership to repeat the talking points of one’s partisan agenda. Frankly, I am tired of Tea Party robopols and their robotic ideologies.

  12. Leadership requires the courage to demand the wealthiest 10% pay their fair share of taxes. To ignore the Bush Tax cuts is irresponsible in any deficit talks. All recent polls show the American people want a balanced approach. Tea Party Republicans have proven they cannot negotiate or find common ground. That is not governing. And Mr. Mullins, I think you should put “a Tea Party member” in your bio, although after reading your position here, it should be crystal clear. If anyone cares to see an excellent factual graph of how we got into this crisis, click on the link below.


  13. Yes, there is huge leadership gap among politicians these days, but “political leadership” has been an oxymoron that has stayed the course in Washington for decades. Public policy is now being made for self serving reasons and not for what is needed in America.