Debt-ceiling doubts [Most commented]
If the debt-ceiling is raised, Republicans will still need to be convinced that the Treasury Department does need to borrow money to pay off America’s debt, and that a constitutional amendment for a balanced budget is a bad policy, The Times Editorial Board wrote Friday. Unless the government can borrow more money, it will not be able to pay for more than a third of its expenses. And if the government pays some bills and not others, an executive from Standard and Poor’s told lawmakers the government’s credit rating will be lowered, which would only exacerbate the deficit problem, the board said.
As for the balanced budget amendment -– deficit spending isn’t necessarily a bad thing, unless the debt begins to grow faster than the economy, the board said. The two-thirds vote required for revenue increases Republicans are seeking would also give too much power to political minorities. Here’s an excerpt:
The amendment would also require a two-thirds vote to spend more than 18% of the previous year's gross domestic product, roughly the level of spending during peacetime in the 20th century. But the U.S. population today is older, and its healthcare expenses are many times greater. Within a few decades, according to Congressional Budget Office projections, an 18% cap would leave no room for anything but Social Security, Medicare, Medicaid and interest payments on the debt.
Those projections provide ample reason for Congress and the White House to agree to cut spending, subsidies and tax breaks enough over the next few years to stop the national debt from growing faster than the economy. A host of bipartisan commissions have offered plans that could achieve that goal; none of them, however, have called for a balanced-budget amendment. And if the fight over the amendment stops Congress from raising the debt ceiling on time, it will only serve to make the country's fiscal problems worse.
Here’s what readers are saying on the discussion board:
The U.S. has to prove to the world it’s serious about fixing it’s credit rating
If the United States cannot demonstrate to the world that it is serious about tightening its fiscal belt and living within its means, its credit rating will go into the toilet regardless of how much or how little the debt ceiling is raised.
Putting off entitlement reform is no longer an option.
If the government doesn’t pay the people, the people can’t pay their bills either
One thing I never see mentioned in these summaries is that revenue for paying the interest on the debt would plunge if social security is not paid, Medicare bills are not paid, military salaries are not paid, military contractors are not paid, and so on. It would remove an enormous amount of revenue from the private sector because there would suddenly be a lot of unpaid bills, unpaid mortgage payments, and a whole lot more people out of work. And that doesn't even take into account more extreme scenarios such as shutting down all air travel once the FAA has been de-funded.
How do those freshmen in Congress think they're going to pay bondholders when the economy is in a tailspin and revenues with which to pay interest on the debt have been reduced to essentially nothing?
The government has failed to serve the people
Cut the military budget and get out of the global wars we wage. That alone will save a fortune. Stop giving corporations massive tax breaks - they are people now right, same rights et al? So they should pay taxes like the rest of us. Everybody complains about the government but everybody is there with their hat in hand looking for more...
Stop voting for either party they are slightly different versions of the same thing - power hungry, lobbyists.
There once was a budget surplus... but unaccountability and a lack of oversight by decent people-serving politicians has destroyed the country.
Cut the military budget, demand reasonable taxation on businesses...
The government is not a business - it is an institution to serve the people - it clearly has failed us for a great many years.
Spend less so we don’t have to do this again
Not all Republicans oppose raising the debt ceiling, but they do oppose Democrat intransigence on solving the problem for the future. Spend less, and we won't have to face this again.
Clearly spending without taxing doesn’t work
As long as the party of 'spend-but-don't-tax-me' controls Congress by having enough votes to block proposed changes, this is going to be going on.
Stop paying for people who don’t deserve it
Progressives lament the ending of their tax, spend and spend more policies. Well, the time has come to pay the piper. Free medical care for illegal aliens? Might not be essential. Increased welfare payments for women who give birth to additional children while already on welfare. Not good policy. Pensions for government workers far in excess of what social security provides for workers in private industry paid for by the workers in private industry? Another bad idea.
-- Samantha Schaefer
Photo: President Obama holds a news conference to discuss the progress of negotiations with lawmakers to raise the debt ceiling and find a balanced approach to deficit reduction at the White House Friday. Credit: Larry Downing / Reuters