There’s a nice debate going on in Washington about raising the debt limit.
One the one side, we have elected officials who say this:
“Increasing America’s debt weakens us domestically and internationally…Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership…I therefore intend to oppose the effort to increase America’s debt limit.”
And the other side says this:
” If Congress refuses to raise what’s called the debt ceiling, America would not be able to meet all of our financial obligations for the first time in 225 years… a nuclear bomb, a weapon too horrible to use. It would disrupt markets, it would undermine the world’s confidence in America as the bedrock of the global economy, and it might permanently increase our borrowing costs…All (increasing the debt limit) does is allow the Treasury Department to pay for what Congress has already spent.”
Both quotes are from Barack Obama.
When Republicans were in charge, Obama thought raising the debt limit was the scourge of mankind. How that he’s in charge, not raising the debt limit is the scourge of mankind.
That’s “change we can believe in,” huh?
But that’s not even the biggest lie.
The biggest lie is that failing to increase our debt limit would mean we couldn’t “pay our bills” and “default on our debt.” That would be true if somehow we can’t afford our interest payments exceeded our revenues, but they don’t. The federal government takes in over $3 trillion a year and debt service is $240 billion – 8 % of revenues.
Think of it this way. If you maxed out a credit card, and your interest payment was 8% of your salary, would you need to increase your credit card limit to continue paying that credit card bill?
It’s silly!
Whether my credit limit rises is completely irrelevant to my ability to continue to make my credit card payments like I’ve always made them.
What it means is I won’t be able to INCREASE spending like I might want to. If I wanted to spend more, and I wasn’t generating new revenue to pay for it, I might have to cut spending on something else.
Oh…the horror!
The debt ceiling debate is not a big deal to me. I don’t think it’s a big deal in raising it. I don’t think it’s a big deal if we don’t.
But anyone who says we default on paying interest if the credit limit isn’t raised is lying. No person would ever say that about their own credit limit.
And America should ask Obama why he has said both raising it and not raising it would result in horrible economic calamities.
