Friday, July 15, 2011

Raising the Debt Ceiling is Not an Option

Now that I have had a few days to calm down, after my complete breakdown on twitter and on my previous post, I think I should elaborate some more on this important issue.  I believe that raising the debt ceiling is not an option at all for the following reasons:

  • The debt ceiling right now acts as a kind of stopping point.  It basically tells the accountants in government that they cannot borrow anymore money to fund government programs.  While bureaucrats largely are disdainful of the Constitution and the limits set forth within the highest law of the land, they tend to really enjoy their own systems that they have set up.  In other words, the debt ceiling is a limitation put forward by the Second Set of Books and will be adhered to, unlike the limitations placed on the Constitution.
  • The current mainstream solution to the crisis has been a bill introduced by Senator Mike Lee, which will allow the debt ceiling to increase provided that there are cuts, caps, and a balanced budget amendment to the United States Constitution.  The trouble with this proposal is that it is merely a promise from Congress and if our currency was trading promises made by politicians, we would all be bankrupt now.  If you honestly believe that any kind of promise in cuts to future spending will be upheld by a Republican or Democrat Congress, then you are fool.
  • Despite what many so-called experts will tell us, we will not default on our debt if the debt ceiling is not raised.  If it is raised, however, we will end up defaulting on our debt.  Right now, it really could go either way.  If we hold Congress to keeping the debt ceiling where it is, it forces them to balance the budget, curb spending, and incur no more debt.  Allowing them to raise the debt ceiling will merely brings us that much closer to defaulting on our debt and thus collapsing the bond market.
  • I actually read a tweet by someone criticizing Michelle Bachmann when she said she would not vote to raise the debt ceiling (she probably will).  He actually said that by not raising the debt ceiling, the national debt will not go away.  How deranged and stupid is that?  Seriously, the first rule of getting out of debt is to not incur more debt.  The reason is because regardless of how much money you make, as long as you make regular payments, you should be able to pay it off eventually.
  • The real reason why many economists are saying that the debt ceiling should be raised is because the only thing that is reflecting actual economic growth right now is government.  If you remove government spending from all the equations and measures that they use, such as GDP, you will find that the United States has been in an Ultra-Depression since 2008.  The truth is, neither party wants this to show up in the next election cycle because neither party wants to deal with the massive fallout of such an apocalypse.

The bottom line here is that neither party will stop their massive spending programs unless there is an actual limitation placed on them.  Allowing the debt ceiling to be raised will only give both parties the ability to continue to drag our nation into further economic collapse and massive government spending.

There is no good that will come from raising the debt ceiling, no matter what promises are made and no matter what phantom terrors are supposed to be unleashed.  The truth is, the United States Federal government will not give up its massive spending willingly because that is how they live and survive.  Like the children of Error suckling her poisonous teats, these politicians live and thrive on the promise of more spending, not less.  There are few who do, actually.