What will that mean for you? The Treasury market would drive up interest rates across the board, making it far more expensive for businesses to get loans for expansion and job creation. Mortgages and credit cards would shoot up as well, bringing the housing market and consumer spending to a screeching halt. Many people forget what the country suffered during the Carter Administration, with interest rates as high as 21% in 1980. They could soon go higher, if we’re not careful.
Shedding a few holiday pounds and getting the world’s biggest debt under control might seem like very different challenges, but they have real similarities. An expanding waistline means you are eating more calories than you are burning. An expanding debt means you are spending more money than you are earning.
Want to lose weight? Eat less, and fire up your metabolism with some physical exercise.
Want to reduce the debt? Spend less, and fire up the economy with policies that create jobs and reward innovation.
The success rate of New Year’s resolutions is dismal: a 2007 study found that 88% ended in failure. This latest increase in the debt ceiling is hardly encouraging, but there is still time for the President and Congress to address our financial problems. Let’s hope they beat the odds and succeed.
Rick Berman
Rick Berman is the President of Berman and Company, a Washington, D.C.–based public affairs firm specializing in research, communications, and creative advertising.
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