Friday, October 04, 2013

The Debt Limit Farce

Up until 2011 the raising of the debt limit was just a a housekeeping chore that Congress had to go through occasionally. Whichever party that was  in power would vote to raise it  and the opposition against, usually unanimous on both sides. The debt limit was raised 18 times under President Reagan and 7 times when Dubya occupied the the White House

Saint Ronny even warned against not raising the limit:

"The full consequences of a default -- or even the serious prospect of default -- by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar."

When the Republicans took control of the Senate after the 1980 election it was time to raise the debt limit again and Senate Majority Leader Howard Baker met with his caucus and told them they had to vote to raise the debt ceiling. He got the usual objections from his members like "I never voted to increase the debt limit in my life", etc.  His response was the American people elected us to govern and now we must show them we are fit to govern. The Republicans then  all voted to increase it and all the Democrats voted against it. 

Now the Republicans are moving on from shutting down the government to threatening to blow up the world economy if they don't get their way. Do you know how many financial instruments are tied to the 30 year T-Bill? Not only in this country but around the world. If the Treasury has to decide between paying the interest on  the debt or issuing Social Security checks or paying other obligations there will be chaos not seen since 1929.

As I have said before these Tea Party people are not conservatives. They are anti-government anarchists. 

There is a way out of this ridiculous situation and Sen. Mitch McConnell of all people came up with it in 2011:

Under current law, Congress raises the debt ceiling, which allows the Treasury Department to issue more bonds to pay off debts and fund projects that Congress has already authorized. Raising the debt ceiling does not authorize or appropriate new spending, but merely settles old bills. 

Yet under McConnell's plan, which he called his "last-choice option," the White House would request an increase in the debt ceiling and Congress could only block that request with a veto-proof super majority -- effectively ceding control over the debt limit to the White House. A super majority would likely be difficult to amass, especially when neither party's leadership genuinely wants the nation to default.

1 comment:

Anonymous said...

if the dems were doing this you would call then heros, standing on ideals