Convenience Big Store: Debt-ceiling dishonesty, plus globalization’s next hero

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The month of May will be far less merry this year, thanks to the incessant chatter and doomsday predictions around the U.S. government's debt ceiling.

House Speaker Kevin McCarthy and the Republican majority in the House of Representatives have voted to use the anachronistic requirement for Congress to raise the federal government's debt ceiling to generate talking points for the 2024 election.

This political gambit is dishonest and anti-democratic. Despite what Republicans may say, the government has already spent the money.

Raising the debt limit does nothing more than allow the Treasury Department to issue bonds to pay for things Congress authorized long ago.

The Republicans' proposed spending cuts would lower future spending by reversing decisions made by earlier Congresses, mainly President Joe Biden's priorities passed by the Democratic majority. Plain and simple, the GOP wants to negate the work of Democrats.

If Democrats decided to use the debt ceiling to redo past decisions, democracy would come to a halt. Every Congress would rewrite what earlier Congresses approved.

Former President Donald Trump's budget-busting tax cuts, for instance?

Biden will not allow a thin GOP majority to reverse his most significant achievements. Instead, he suggests the new Congress worry about future budgets that voters did give them authority over. As for the past, he wants a debt limit with no strings attached.

The gimmicks have been sickening, though. The GOP took a long time to develop a proposal that was dead on arrival. Treasury Secretary Janet Yellen has been cagey about a deadline for passing a bill, surprising everyone outside the White House by declaring the nation will default on June 1 absent Congressional action.

Biden then turns up the heat by saying he's happy to meet with Congressional leaders on May 8, knowing Congress will only be in session 14 days this month. In the meantime, journalists must explain the differences between the deficit, debt and the debt limit to a citizenry that already hates politics.

This is a silly game where insiders use Byzantine tactics to score points with other insiders. My only fear is that somehow hubris spins out of control, Americans witness a collapse of financial markets, and on June 2, the number one search term on Google will be "What is a national default?

Chris Tomlinson
Business Columnist
chris.tomlinson@houstonchronicle.com

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Photo: Elizabeth Conley, Houston Chronicle / Staff Photographer

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Question of the Week

Some think Biden can ignore the debt limit. Should he compromise on spending or set off a constitutional showdown? Reply directly to this email and tell me your thoughts.

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Last Week's Question: What kind of cobot would make you more efficient?

"As a retired individual, I do not believe a cobot would make me more efficient. But I also decided to write a book, and a cobot would be very helpful in research." –Harold Rocketto, Houston

"Nature and the consciousness of the planet." –Frank Caldwell, Austin

"I don't fear AI taking over because humankind will destroy itself before AI gets the chance!" –Katherine Edmiston, El Paso

The Takeaway

Politicians talk a lot these days about decreasing our reliance on China, and U.S. companies are shortening their supply chains to stay within North America or Europe. But the International Monetary Fund has a reminder of how important Asia remains to the global economy.

China and India will generate about half of the globe's economic growth in 2023, according to IMF economists. Only 21 percent of economic growth will come from the Western Hemisphere and Europe.

The Asia-Pacific region's economy will grow at 4.6 percent this year, while Europe will barely stay out of recession. Economists at The Conference Board think the U.S. will enter a recession later this year and register 0.8 percent growth for all of 2023.

If you run a global company, you want to sell into Asia's strength right now. A key factor is the region's youth compared to the rest of the world, with far more young families than in the West.

The IMF predicts China's economic growth spurt will not last for the same reason. China's average age is 38.4 compared to 38.5 in the U.S. But China's past one-child policy and strict immigration means its population will age far faster in the years ahead.

India's population, which exceeded China's this year, has an average age of 28.7 and a still high fertility rate. The economy is growing faster than 5 percent annually, and the nation will have the third-largest economy in 2027.

Executives looking for the next big economic powerhouse are looking to the subcontinent. The geopolitics of global trade are constantly evolving.