Woo Hoo!!! We just passed $14 Trillion! Oh… wait… That’s a bad thing. It is amazing the politicians are finally deciding debt could be a problem. Where have they been for the last 40 years? Oh… that’s right… spending our money on their political cronies and pork projects. And what is the solution from our esteemed Treasury Secretary, Timothy Geithner? Raise the debt ceiling. Here’s Geithner’s quote from the WLS article,
“Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses and could lead to the loss of millions of American jobs,”
So, his theory is we must raise the debt ceiling so we don’t have to raise taxes. Taxes are going up either way. His logic is defaulting on debt, even short term, will raise the cost to borrow of the government. It does have validity, but it is pointless unless real government spending reforms are enacted.
John Boehner sums it up fairly well…
“The American people will not stand for such an increase unless it is accompanied by meaningful action by the President and Congress to cut spending and end the job-killing spending binge in Washington,” Boehner said. “While America cannot default on its debt, we also cannot continue to borrow recklessly, dig ourselves deeper into this hole, and mortgage the future of our children and grandchildren.”
The business model Geithner and the current administration advocate will not work without curtailing the gravy train of spending. How many regular citizens could be completely broke, go to the bank with the rationale they need to raise their credit limit, and the only solution is to borrow more in order that the interest rate they borrow money at does not go higher? The banks would laugh them out of the room and foreclose!
Photo Credit: Public Domain, Official White House Photo, Pete Souza