The Republicans’ next fight is the raising of the debt ceiling. You remember the last time we did this, don’t you? It was back in the summer of 2011 when the GOP and the White House went right up to the the debt ceiling and then hit it. Our credit rating was downgraded and they finally came up with the Fiscal Whatever that came home to roost last week. Good times.
Anyway, all this talk about fiscal this’n’that and sequester and stuff can be pretty confusing to the point that most people just turn it off. It’s too confusing, and everyone’s trying to catch up with Downton Abbey or Honey Boo-Boo anyway, right?
Okay, then, here’s a simple explanation of the debt ceiling: it’s our credit card limit. Since the government pays for everything on a credit basis, we need on occasion to raise the limit on the amount we’re allowed to borrow in order to pay for the stuff we’ve already bought, like all the stuff that keeps the country running. It is not incurring new debt; we do that every day. It’s how we operate.
The Republicans are saying they want to shut down the government to force President Obama into some kind of deal to cut back spending, and one of the cudgels they are threatening him with is refusing to raise the debt ceiling. We can’t borrow, therefore we don’t spend, therefore we save money, therefore the economy recovers.
That may make a great sound bite on Fox News, but that’s like me saying, “Hey, I can save a lot of money this month if I don’t pay my rent or my credit card bills.” Yes, I will save money. I will also see my credit rating tank, and I’ll be living out of my car.
Failing to raise the debt ceiling will create more problems for the country. We’ll go into default, our credit rating will crater, interest rates on our debt will go up, and because we’re a huge country in terms of the economic impact on the rest of the world, we’ll lead the planet into global depression.