The Politics of Not Raising the National Debt Limit

Recently, Speaker of the House John Boehner reiterated his party’s intention not to raise the limit on our nation’s national debt.   Boehner called for action to “cut spending and end the job-killing spending binge in Washington.” in effort to distract the American people from what got us in the predicament in the first place, mainly the fleecing of our economy by U.S. banks.  These banks were over-leveraged and under-regulated by all rational accounts.

So what happens if the Republicans get their way and refuse to raise the debt ceiling?  Senator Lindsey Graham, who is straying from his ilk on this issue, told CNN point-blank, “Let me tell you what’s involved if we don’t lift the debt ceiling: financial collapse and calamity throughout the world. That’s not lost upon me.”

A letter sent by Secretary of the Treasury, Tim Geithner, to the new Congress outlined the urgency to lift the debt ceiling.  Failure to do so would force the Treasury to default on legal obligations and payments to bondholders here and abroad “causing catastrophic damage to the economy,” Mr. Geithner said.  Stopping payment on the debt would threatened many federal benefits from military salaries to Social Security and Medicare.

“Given the gravity of the challenges facing the U.S. and world economies, the world’s confidence in our creditworthiness is even more critical today,” Mr. Geithner said.

Currently, the U.S. is approximately $335 billion from its authorized debt ceiling of $14.29 trillion. The debt ceiling would need to be raised by the end of March and no later than by mid-May to skirt default.  Like the recession of 2008, the worst since the Great Depression of 1929, missing a debt payment is unprecedented in our country’s history.

One of the first actions taken by the new Congress was to approve new rules, thus making it harder to pass a debt-limit increase. No longer will an increase be automatic with passage of a budget resolution; it will have to be voted on separately.

Is not lifting the debt ceiling just a political ploy by the new Congress to make us think that all of this spending has led this country to 9.4% unemployment rate?  When in reality we know what really happened.

Maintaining our economic strength as a country is vital to our prosperity as a people.  It is imperative that we stand behind our debt obligations and signal to the rest of the world the U.S. is still a viable, global economic power.   Let’s not lose sight of what is important.  Let’s cut through all of this political posturing in Washington and do the “right” thing.  Let’s not play around with the”full faith and credit of the U.S. government,” and our country’s future.