With Washington's budget showdown over – for now, at least – attention has shifted to the next major government funding crisis on the horizon. With a mere $80 billion between the government and default, lawmakers, lobbyists, and Obama officials are scrambling to make the case for an extended line of credit.
But just as with the budget negotiations, the newbies (along with some staid veterans like Jim DeMint) are making trouble. Those pesky, pie-eyed congressmen that ran on promises of slashing spending and reducing government bloat are questioning the wisdom of taking on more debt as the first step toward balancing our nation's budget.
The adherents of voodoo economics insist, however, that it's not that simple. Failure to increase the debt ceiling, they maintain, will wreak economic havoc around the globe and undermine the fragile "recovery" that is underway here at home (This message is brought to you by the proponents of TARP and "too big to fail"!). From the Washington Post:
"If Congress does not increase the limit, borrowed funds would not be available to pay bills and the United States may be forced to default on its debt obligations. There's no precedent for this situation. Treasury has never been unable to make payments as a result of reaching the debt limit. With a fragile global recovery counting on U.S. economic stability, the debt limit issue could roil international financial markets. Democrats and Republicans agree that if the debt limit is not raised we would be inviting economic catastrophe."
There's no denying that America has gotten itself into a hole the size of the Grand Canyon, and any way we slice it, getting out again is going to be a painful, even "calamitous" process. The question is, should we face this inevitable calamity now, or are we going to take the coward's way out and leave the mess for the next generation of Americans to address?