This was an article today on www.CNNmoney.com written by Jennifer Liberto. I’d love to hear your thoughts about this topic.
Federal Reserve chief Ben Bernanke reinforced his call on Thursday for Congress to raise the cap on U.S. borrowing, saying a failure to do so could lead down the same risky path that the failure of Lehman Brothers did.
During a Senate Banking Committeee hearing, Bernanke reiterated catastrophic consequences should Congress either fail to raise the limit on borrowing or edge too close to that limit.
“The worst outcome would be one in which the financial system would be again destabilized, which we saw in Lehman, which would have extremely dire consequences for the rest of the economy,” Bernanke said, referring to the period following the failure of the Wall Street bank Lehman Brothers at the height of the financial crisis in 2008.
Bernanke also said that “using the debt limit as a bargaining chip is quite risky,” reiterating a worry he expressed in a February press conference.
The clock is ticking: The current $14.294 trillion cap on the debt will need to be raised by early August at the latest.
According to the most recent public figures, the debt was just $14 billion shy of the cap.
Republicans in Congress don’t want to raise the amount that the nation can borrow unless they can tie such bigger borrowing to other drastic budget cuts.
So in other words, we’re getting dreadfully close to maxing out our nations credit card, which looks very bad to our creditors, and kills our credit score. The best answer, it seems to me, would be to start paying down our nations debt. But a much easier answer (and to some, a better answer) is to simply raise the limit on our nation’s credit card so that it doesn’t look like we’re about to max it out. Is this really the best way to fix this problem? The catch 22 of it is that there is no way to pay down this debt in the short run, or quickly. Congress takes forever to do anything. By the time they quit fighting long enough to decide how to start paying down some of the debt, we’d be over our limit.
I would love to hear everyone’s feedback and suggestions on how we can get out of this mess. Please enter them below.
0 thoughts on “Raise the Debt Ceiling”
1. A financial audit of the U.S. government should be done to determine the truth.
2. Do not raise the cap; pay down the debt.
3. Establish a standard other than the dollar, a standard that has some intrinsic value.
4. When some perception of stability begins to form, audit all federal agencies with an eye
to defunding all federal agencies which are not constitutionally and fiscally viable.
Great comments Gordon! If you don’t run for President in 2012 I will be writing you in.
why put a ceiling if you’re just gonna raise it? it’s like having an arbitrary cap on your spending. it’s like giving your wife a credit card with a max limit and then when your wife calls you she needs more for her shopping, you call the bank and ask that the limit on the credit card be removed. As Parkinson’s 2nd law states, “expenditures rise to meet income”. In this case, a higher debt ceiling will just mean more government borrowing.