Increase the damn limit

Republicans continue to play with fire on the U.S. debt limit, and the results could be catastrophic. Today, the United States hit its debt limit. To keep government running and our obligations met, the U.S. Treasury Department is now juggling books and taking “extraordinary measures” to avoid the global economic meltdown that would occur if the United States doesn’t keep up with its debt payments.

While a few voices who are either very partisan, very stupid or both want Congress to reject an increase on the debt limit, most people who understand the situation know that failure to do so would result in complete disaster:

To understand the danger posed by the debt ceiling, it helps to understand the financial crisis. A lot of banks and investors held assets based on mortgages they thought were safe. They weren’t. That meant that no one knew how much money they really had, or how much money anyone else really had. So the market did what woodland creatures do when they get confused and scared: It froze. And so, too, did the economy. As the unemployment rate shows, we’re still not completely thawed out.

If Congress fails to lift the debt ceiling beyond its current limit of $14.29 trillion — or even waits too long — the chain of events will be similar, but the asset under question will be America itself, not some newfangled Frankenstein bond made out of mortgages from the Reno suburbs. Which would mean the aftermath would be much, much worse.

“The cornerstone of the global financial system is that the United States will make good on its debt payments,” says Mark Zandi, chief economist at Moody’s Analytics. “If we don’t, we’ve just knocked out the cornerstone, and the system will collapse into turmoil.”

Republicans know this.They just don’t care. If they can make progress on their ideological agenda by risking economic collapse – well, their base would crucify them if they didn’t push it to the limit.

Which says much about the Republican base.

It is time for Republicans to govern. They must act like grown-ups. They must put the good of the country – and, indeed, the global economy – ahead of ideology.

Increase. The. Damn. Limit.

Then debate spending cuts and Medicare vouchers and everything else between now and 2012. Let the public make a rational, informed judgement about the direction this nation should go in. If Republicans win big in 2012, then they can put their agenda in place.

Ransoming the future of the global economy in exchange for forcing through that agenda is undemocratic and irresponsible.

6 Responses to Increase the damn limit

  1. Joe Mostowey says:

    Who owns a thing? The man who creates it or the man willing to destroy it?

    The man willing to destroy, without regard for the consequences is the true owner.

    So let the republicans cause a catastrophy, and accept ownership of their actions.

    They will continue to blackmail and extort knowing the rest of the country will suffer, and the democrats will continue to give them what they want, This form of political terrorism is always the fallback position for those who crave power, as shown throughout history.

    Until such a catastophic event takes place, they will always have the upper hand, with no consequences.

    So give them the consequences they so dearly long for.

  2. Why it it FDR deliberately defaulted on America’s debts, among other things, and liberals to this day portray him as a hero. The GOP refuses to raise the debt ceiling without spending cuts and they are very partisan, very stupid, and behaving like children?

    • Joe Mostowey says:

      Actually, What Roosevelt did was remove the dollar from being tethered to Gold, Which in essence made the dollar worth more (under the gold standard it was worth almost $21.00,to buy an ounce of gold after it was untethered it took $35.00 to buy an ounce of gold.

      However, the USA did indeed pay off the face value of the bonds it issued – just not in gold.

      Today, inflation does the same thing.

      If you had a dollar in 1941 it would take four dollars to purchase in 1961 what you could in 1941

      If you had a dollar in 1961 it would take ten dollars to purchase in 1981 what you could in 1961

      If you had a dollar in 1981 it would take ten dollars to purchase in 2011 what you could in 1981.

      If what Roosevelt did in 1922 was termed default, then every president since has defaulted on our debts.

      The GOP does indeed refuse to raise the debt ceiling without spending cuts -of necessary programs at the same time they are pressing for more tax cuts for wealthy Americans, and more increases on taxes for the poor and middle class , so YES they are very partisan, very stupid, and behaving like children.

      • What Roosevelt did is called theft. In fact, Senator Gore told him so.

        When Roosevelt confiscated all of the gold and refused to pay US obligations in gold, he decreased the value of the dollar. If an ounce of gold cost $20 prior to his actions, and $35 afterwards, that means the dollars in your pocket were worth 40% less, not more.

        So, you may claim the US paid off the “face value” of the bonds, but investors received roughly only 60% of what they were legally entitled to.

        Inflation does do the same thing. The Fed artificially causes inflation by printing more money out of thin air, increasing the money supply and making the value of the dollars in my bank account, and yours, worth less. Inflation is taxation that disproportionately impacts poor and middle class Americans.

        Our elected officials in Washington need to get spending under control. The Congress needs to reclaim its Constitutional responsibilites when it comes to our currency. Elected officials from both parties, in both chambers as well as the White House must operate within the framework of the Constitution. Raising taxes and manipulating currency and raising the debt ceiling without regard for the future of our children and our grandchildren and the Republic is the path to destruction. Liberty is the path to prosperity.

        • Joe Mostowey says:

          Stephanie wrote “Inflation does do the same thing. The Fed artificially causes inflation by printing more money out of thin air, increasing the money supply and making the value of the dollars in my bank account, and yours, worth less. Inflation is taxation that disproportionately impacts poor and middle class Americans.Our elected officials in Washington need to get spending under control. The Congress needs to reclaim its Constitutional responsibilites when it comes to our currency.”

          —————————————————-

          I don’t think you grasp the concept of inflation, and its causes.

          If Tomato pickers demand an increase in pay, and the tomato farmer increases the price of tomatos to the consumer to pay for that raise, there is a portion of inflation.

          If the price of oil increases 400 percent, and consumers must now pay more for not only the gasoline they use, but the increased costs of everything shipped, and everything that uses oil such as plastics, medicines, and electricity. -again an inflationary rise. And to cope with the rises in costs for food, fuel and electricity, the folks who labor to earn money demand raises to enable them to continue to maintain their standard of living.

          Everything is interconnected, and a price rise in one place will trigger rising prices elsewhere – like in the housing market- prior to the boom in building an 8′ 2X4 cost 89 cents. During the height of that boom that same 8′ 2×4 cost $3.89

          And many companies will merge, close down factories, do away with storage facilities, decreasing supplies of a product thereby increasing the ratio between supply and demand, increasing prices – such as happened when Ronald Reagan deregulated the energy sector.

          Many smaller oil companies were purchased, or were leveraged into mergers, their refineries closed, and their storage facilities dismantled. In 1981 there were 350 oil refineries in the USA. Today there are 150 refineries. By eliminating the excess storage, which provided a buffer against sudden rises in the cost of crude oil, and kept gas prices stable in the long term, the closing of these refineries allow the oil companies to instantly pass the increased price of oil onto consumers.

          THAT is inflation.

          While “printing” money has some part in the inflationary spiral, it is far from being the dominant factor – but it is a convenient target for political fear mongering.

  3. Joe Mostowey says:

    Stephanie Wrote “When Roosevelt confiscated all of the gold and refused to pay US obligations in gold, he decreased the value of the dollar. If an ounce of gold cost $20 prior to his actions, and $35 afterwards, that means the dollars in your pocket were worth 40% less, not more.”

    ————————————————

    What Roosevelt did when he confiscated the Gold, was dis-attached Gold from the Currency, and made it like most governments of that era, a national asset.

    Gold is currently over 1000 dollars an ounce -should we therefor make the bills and bonds from the last century equal to todays price of gold? So that a five dollar redeemable in gold bill back in 1933 (0,25 ounces) would be worth 0.25 ounces of gold today?

    No. Pure silliness.

    The price of Gold, like oil, and many other such commodities, rises and falls with demand.

    Your claim, that Roosevelt defaulted on American debt does not hold water, as the holders of those debts were paid in full – just not in GOLD.

    People who invest in stocks, and government bonds take the risk that inflation will be less than the interest paid on those debts. It would have been the height of stupidity for a President -or the leader of any other country, to not only pay the interest on those debts, but to also pay the debt in a commodity that was worth far more than the face value of those debts.

    Would you sell your house back in 2007 for what you paid for it in 2000?

    Why then would you criticize a President for refusing to do essentially the same thing with the property of the U.S. Taxpayer?

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