Yes, the government spends too much, it borrows too much, it spends money on stupid things. But just stop right there. PLEASE.
Nov 5, 2015 is when the debt ceiling has to be raised. At least, it is now the best estimate of Sec’y Lew.
Debt ceiling has nothing to do with how much the government can spend or borrow. It is not like your credit card limit. It is called a debt ceiling, but it should be called “Permission to pay what the US Government has already spent.” It is like permission to pay your credit card bill when it arrives. But it’s worse, because if the US Government fails to pay, they have now defaulted on their obligations.
The US has never, ever defaulted. Companies who fail to pay their obligations find their credit ratings cut very quickly, and soon they are facing bankruptcy.
A temporary debt ceiling “patch” was passed in 2014, which temporarily suspended the debt ceiling to March 15, 2015.
So, the alarms at the Treasury have been sounding since March 6, 2015 that Congress has to take action. Eight times, Lew sent letters to Congress. Obama has stated the same thing countless times. This is the economic nuclear bomb.
If a debt ceiling bill is passed with demands that Obamacare or Planned Parenthood are to be defunded (which has nothing to do with the debt ceiling) you basically destroy the power of the President to execute those laws passed by Congress. Obamacare is in effect because was passed into law by Congress. Now Congress can defund Obamacare, they can defund Planned Parenthood, but not as a condition to prevent an economic crisis.
Secretary Jack Lew sent letters on March 6, 13, 16 and 17 warning that he was forced to take emergency step (extraordinary measures) to avoid default. He then sent letters on 7/29, 7/30, 9/10 and two days ago (Oct 1, 2015) with the Treasury’s best estimate of when the funds used during this period would be exhausted. Each letter stated the exact date could not be predicted, because it would depend on the money coming in and out of the Treasury every day.
There was a nice way to deal with this. Congress used to pass budgets, and when the budget passed, automatically the debt ceiling was raised. This is why during the Bush administration, nobody was concerned with debt ceilings. But, this was done away and the rest is an awful mess.
Republicans have the chance to make a major and permanent change in our economy, by pushing our country into default for refusing to pass a simple clean debt ceiling increase. Ted Cruz, Marco Rubio, and Rand Paul may lead the charge. Why not, they are behind in the polls.
Republicans will try to put the blame on Obama, as crisis hits, and they will get plenty of air time on Fox news, by emphasizing that we are trillions in debt and they are some kind of white knights to save the day. All they really do, is slay the princess and let the dragon loose.
Is it worth it?