President Obama and the Democrats are issuing dire warnings that the U.S. may default on its debts if the debt ceiling is not increased. This is a false threat. If the debt ceiling is not increased by August 2, it is highly unlikely that even one member of Congress would vote to stop paying on debt owed. They would not dare to be seen as voting to stiff other countries on money owed them by the U.S. Defaulting on our debt is a red herring argument Democrats are using to force people into thinking our only choices are raising the debt ceiling or raising taxes by closing tax loopholes. In actuality, once the debt ceiling is reached, it will come down to a choice of either raising taxes or finding areas to cut spending. Democrats don’t want to admit that cutting spending is a realistic choice. They are too dependent upon the votes of people who expect handouts.
Treasury Secretary Timothy Geithner, the architect of TARP, who helped get us into this financial mess by racking up our debt level with billion dollar bailouts, claims there will be “catastrophic damage across the U.S. economy and global economy” and a “double-dip recession” if the debt ceiling is not increased. But when the U.S. reached the $14.3 trillion debt ceiling on May 21, there was barely a ripple in the stock market. Instead of the sky falling, the market for U.S. debt barely budged, and Treasury bond rates stayed relatively the same. The U.S. has until August 2 when the money physically runs out to make a final decision. Why should one of the primary persons responsible for getting us into this financial crisis be trusted to recommend how to get out of it? If anything, Geithner should be permanently banned from any position in finance.
This manufactured debt ceiling crisis is nothing new. When a previous $4.9 trillion debt limit was reached in 1995, Congress refused to raise the debt ceiling and nothing happened. The sky did not fall and we did not default on our debt.
Obama himself voted against raising the debt ceiling in 2006. He explained his vote at the time, “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.”