s a self-described political junkie, I would be remiss not to comment on the current fiasco concerning the debt ceiling. Lately, politics has become ugly. Debate no longer seem to be about how to repair the serious problems this country faces, but rather a war has turned into a zero sum game.
Enough is enough! We have less than a week now before the country goes into default and I’ve just learned that some grassroots conservative organizations, as well as an influential fiscal conservative group are hell bent on defeating Speaker Boehner’s plan to reduce the nation’s debt. These are people in his own party! This behavior is despicable. Let me be clear: I’m no economist. I am simply an American who loves her country. I am concerned for the welfare of this nation. Is it not alarming to those same people who claim that their “rights” as “Americans” are being trampled on? Do they not see that we are losing our credibility as a democracy around the world? It is infuriating that our nation’s “leaders,” I use the term loosely- seem hell bent on derailing the political process rather than work alongside one another to restore our confidence in it. I write these words for my own edification about the debt crisis. I pray that the dysfunctional demagogues in Congress, democrats and republicans alike will consider us-the employee, the tax payer, the elderly, the citizen- ultimately we average Americans who will suffer greatly if an agreement is not made.
What I know about the debt ceiling crisis thus far:
The federal government has surpassed the amount of money we can borrow (14.3 billion dollars). If we don’t get our financial house in order by August 3, when the bills are due, we risk going into default. The government is mandated to pay federal salaries, Medicare and social security, tax refunds, as well as the interest it already owes on outstanding debts. If congress can’t get it together and a deal is not reached as to whether or not we can borrow more money after the August 2nd deadline, spending will have to be reduced to the amount of revenue that the government already has to avoid more debt. This could mean suspended investments, or redeeming securities in accounts like Civil Service retirement, which could bring us closer to default. (www.pbs.org/newshour/bb/politics/jan-june11/debtceiling_05-16.html)
The debate over the debt-ceiling is not new. Policy makers have raised the limit in the past. In fact, it’s been raised 74 times. The first time it was enacted was during World War 1 in order to issue bonds.
The Plan
If only there was one! Instead we have partisan bickering and a refusal to compromise.
At the time of writing conservative lawmakers expressed skepticism that Boehner could come up with more cuts. He has just warned his caucus to get their “asses” in line.
His two step plan is a 10 year cap on discretionary spending to save $1.2 trillion over 10 years and to raise the debt limit by 1 trillion an amount that is expected to last until next year. His plan makes spending cuts larger than any debt ceiling increase and would implement spending caps to restrain future spending, thereby advancing the cause of a balanced budget amendment. Reid’s plan would cut $2.2 trillion from the budget $500 billion dollars less than advertised. Also his plan would avoid another debt ceiling argument before 2013, while Boehner’s requires us to revisit the issue again in 2012-with a hike in the ceiling contingent upon tax cuts. (http://www.advisorone.com/2011/07/27/cbo-boehner-reid-debt-plans-fall-short-of-promised)
Obama criticized Boehner’s plan-claiming that it is too short term and could spark the downgrade of US
Boehner blasted Obama and Senate Majority Leader Harry Reid’s plan for engaging in a “spending binge” and pushing tax increases that will destroy jobs,” he claimed it was a blueprint for a blank check for more uncontrolled spending that would undermine the economy. (cnn.com)
Currently, both plans fall short of savings they both have promised, according to the Congressional Budget Office. Revisions to Boehner’s plan would bring a total of $917 billion in savings over 10 years, an increase of $65 billion over the initial version. With the revisions, Boehner’s proposal which calls for a $900 billion increase in the debt ceiling-now meets his pledge to match any debt ceiling hike with dollar for dollar spending cuts. Senate Democrats said that this plan has no chance of passing the Senate-and the top Republicans have called the Senate Democratic plan a “non-starter.”(http://politicalticker.blogs.cnn.com/2011/07/28/conservative-groups-making-final-push-todefeat Boehner plan.
How Is the Crisis Affecting us now? What about After August 3?
The Daily News has reported that the economy has already started to hurt because of the stalled debt ceiling talks. Investors are wary and stocks are dipping. A downgrade of the debt-and even worse, a default would likely undermine investors faith in the security of U.S. debt and this would force interest rates to soar even higher, which could hamper an already limping economic recovery. We have already seen the dollar decline. In Canada
Apart from the governments mandated obligations, the cost of capital will go up, which means most of us (the middle class who will be most affected by the debt plan as it stands right now) will have less purchasing power. Food prices have already gone up and it will only get worse. It will affect people with mortgages, or car loans. They could get badly hurt. Interest rate increases are a huge concern for people in commercial real-estate. So, in other words it doesn’t look good. And worst case scenario-what if we were to end up like Greece
The American people don’t want to hear their elected representatives talk about how much they care about this country and want to do the right thing and then do nothing. It’s time for them to put egos and partisan politics aside. It’s time to compromise. Let’s talk about that word for a moment. Compromise has become synonymous with treason in Congress these days. The infuriating aspect of this crisis is this divisiveness in Washington
In conclusion, my plea is a simple yet urgent one: Washington-please put politics aside and come up with a balanced-meaning everybody shares the cost-not just wealthy Americans, and not just the middle class. We need a balanced debt plan for the sake of the economic future of this great nation. As for the dysfunction that represents Washington
