The Debt Ceiling as the Government likes to call it is hardly that. The way things are going it seems more like a spending request, one that neither the Congress or President want to accept. It has been easier for them to just raise it. This time will be the 11th in the last decade, if they do it. But why do they go through this process and more importantly why do We the People let them? Let’s look at one story on this matter.
NPR has this take on the current issue
Every day, the federal government spends more money than it takes in. It makes up the difference by borrowing money. So every day, the government’s debt increases. Some time next month, total federal debt will rise above $14.3 trillion.
There’s a law on the books — first passed in 1917, updated many times since — that caps the federal debt at $14.3 trillion. This is the debt ceiling.
Some time very soon, the government either has to raise the debt ceiling or stop spending more than it takes in (in other words, balance the budget).
Balancing the budget would mean cutting spending by about 40 percent, raising taxes by a comparable amount, or enacting some combination of massive spending cuts and huge tax increases. (Context: Every penny of discretionary spending, including defense, amounts to about 40 percent of the budget.)
Balancing the budget immediately bears no resemblance to the budget and tax policies passed by Congress in the past few months. It would be a much bigger, much faster spending cut and/or tax hike than leaders of either party are proposing.
Trying to stay below the ceiling could also ultimately force the government to default on its debt, which has never happened in U.S. history. Because U.S. Treasury bonds are held around the world, and are considered nearly as safe as cash, a U.S. default would create economic chaos.
Congress has raised the debt ceiling
nine10 times in the past decade, according to National Journal. And it seems likely that the current debate over the debt ceiling comes down to what sort of posturing, or negotiating, or whatever, will happen between now and whenever Congress votes to raise it again.
How exactly is forcing our Government to live within a specific means causing it to immediately default on its debt. Well to be honest as the NPR article says it forces Government to make big cuts. Many Americans don’t think this is a bad thing. The default part is due to the payments on the debt which factor into the daily spending. If your interest rate kept going up on your loans would you take more loans to pay them off? That is exactly what the Government is doing.
The Government through Quantitative Easing is buying its own debt with money it does not really have. So the reality is that if we cap the debt ceiling (actually making it a ceiling) we are hurting ourselves as the Government by some reports has bought back 900 Billion of its own debt in the QE moves they have made.
So it is conceivable that there could be a forced hardship on our Government from limiting actual spending. They would not be able to pay themselves back. Not that they can now. That is what caused the Quantitative Easing in the first place.
In a time like only one other in our countries history. (that would be the founding) we are faced with the potential pain of real collapse. We need men of vision and strength to take on the challenges of our poor economic policy.
If you are one of the 72 percent of Americans who think Congress is doing a bad job, get up and walk to the nearest mirror. Once there ask yourself, why do I keep electing these spineless cowards? The go to the polls the next time your representatives run and if they did not vote for what is good for the whole country then vote them out.
The men who founded this country were faced with some tough choices. They respected the autonomy of their states but wanted a mutually beneficial government that would assist the states in growing. We are way past that folks. The Federal Government routinely tells the states what to do. They do it with economic bribes. All of this adds up to one fact. Our Government is spending us into oblivion. We are letting them.
Maybe we should all go up to the top floor and stand on our Government to keep that ceiling from moving. And one more thought. The opening statement of the NPR article says it all. “Every day, the federal government spends more money than it takes in.” Stop them!