Letter About Debt Ceiling to Congressman Kevin Yoder

If Congress fails to increase the debt ceiling, I am very concerned about the effect lack of action would have on the investment markets which in most portfolios are not fully recovered from losses in 2008.

Increasing the debt ceiling does not create new Federal spending; it simply permits payment of interest on debt already incurred, which unfortunately requires borrowing to finance. If Congress doesn't raise the debt ceiling, U.S. Treasury obligations will be in default with serious adverse consequences for investment portfolios.

I deplore deficit spending as a standard practice and believe it should not occur. But, holding the debt ceiling hostage to change this practice is not the way to balance the budget for on-going government programs. Debt financing is only prudent for infrastructure investments which should always be considered in a cost-benefit context.

Balancing the budget can only be achieved by scaling back current spending financed by general tax revenues until they are equivalent. Spending for new programs should be authorized only when tax revenues are available through whatever means to maintain a balanced budget. To achieve this, Congress will have to make hard decisions on the viability of Federal programs and fund only the most worthy. With 435 Congresspersons and 100 Senators working in numerous committees aided by seemingly innumerable staff, line-item review of the budget should be possible.

If the debt ceiling is not approved in a timely manner and serious investment losses occur on that account, every member of Congress should be held personally responsible for the losses.