Tuesday, January 11, 2011

The Debt Ceiling Should Not be Raised!

With the deadline to raising the debt ceiling fast approaching, fear mongering is working overtime on both sides of the aisle.
Austan Goolsbee, chairman of the White House Council of Economic Advisers stated that hitting the debt ceiling, "the impact on the economy would be catastrophic" and continued with, "I don’t see why anybody’s talking about playing chicken with the debt ceiling. If we get to the point where you’ve damaged the full faith and credit of the United States, that would be the first default in history caused purely by insanity."
Speaker Boehner stated that, "America cannot default on its debt"
"Even a short-term or limited default would have catastrophic economic consequences that would last for decades," Geithner said in a letter to Senate Majority Leader Harry Reid
Republican Paul Ryan even stated in various press outlets that the debt ceiling needed to be raised.
Now to be fair to the Republicans, they are demanding spending cuts and changes in the budget in return for their support of raising the debt ceiling. There are two major flaws to this line of logic.
  1. Even if they don't get the necessary concessions from the White House, The Republicans will still vote for the raising of the ceiling. So, the Obama Administration and the rest of the Democrats has no incentives to relent.
  2. Assuming Obama gives in to the Republicans, the "Spending cuts and Budget changes" will be no where near big enough.
Also the Dooms Day scenario that many politicians are predicting, if the ceiling is not raised, at best are not true, and at worst are overblown. This would not trigger an automatic default and our government is not stupid enough to let this happen. They would have to start behaving like Adults and make the drastic changes to the structure of the Government that is desperately needed. There would be no more of the endless entitlements. Social Security might actually get privatize. No more earmarks and "Bridges to Nowhere".  Useless parts of the Government, like the Department of Education and HUD would be cut. States and local government is far better able to handle Education and HUD anyways. We might actually get to the point of having a budget surplus. Imagine that!

We have to get to the point of saying "Enough is Enough". We can't keep raising and raising the debt ceiling, because that would eventually lead us to defaulting on our debts. Everyone else lives within their means, or makes the drastic changes in our lives to survive, except for our Government. It's now time to take the Credit Card away from the child that does not care about fiscal responsibility.

Video Excerpt From the Movie "Network":



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