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Round up of President’s remarks: NYT; AP/Google; CBS News; NPR
TPM — “There are only two options to deal with the debt limit: Congress can pay its bills or it can fail to act and put the nation into default,” said Obama’s spokesman Jay Carney. “The President and the American people won’t tolerate Congressional Republicans holding the American economy hostage again simply so they can force disastrous cuts to Medicare and other programs the middle class depend on while protecting the wealthy.”
This should be entertaining. All the old white people are worried about the pres coming for their guns, when it’s really their own side that’s coming for their SS checks.
The debt ceiling issue is not about “cuts to Medicare and other programs the middle class depend on”. It’s about authorizing the government to borrow enough money to pay the bills that have already come due for purchases that Congress already authorized.
There’s no spending question here. The money is spent. Congress bought some snappy duds on its credit card and now the bill is due. There isn’t enough cash in the bank account to make the minimum payment; so Congress needs to take a new loan to pay American Express. Otherwise its credit rating will be degraded and the collection agency will be at the door.
It is so about “cuts to Medicare and other programs the middle class depend on”, when the republicans insist on cuts to those programs before they will vote for the debt ceiling to be raised. Now the president is saying that these programs are not a bargaining chip. The only thing on the table is the debt ceiling, period. I hope he will stick to it for once and not cave in like before!
Synfandel wrote:
I agree that there is no question that the debt ceiling needs to go up to whatever is needed, and big fights over these kinds of self-inflicted crises further damage Congress’s already pathetic reputation.
That said, when I look at the credit card analogy you used, I immediately see where it fails your larger point of this being about paying for existing spending rather than being about the future. All debt is a claim on future revenue. As an individual consumer, my ability to get a loan to make payments on a credit card or for anything else is dependent on my future ability to pay that loan back. Creditors make loans with the hope of making money off of that loan, and the greater the risk to their capital, the higher the interest they will charge, until they finally will simply look elsewhere for investment opportunities.
We luck out with our borrowing because U.S. Treasuries are considered extremely safe investments. It is basically the ideal place to store your money while you await a good opportunity for a higher return. This makes the interest costs on US debt lower than what anyone else would have to pay. But all of this debt is a claim on future taxes. Our debt is reaching levels where we should be worried that interest payments in the future will eat up more of our taxes than we can handle and still be able to pay for all of the spending we will want to be doing in the future. Not to mention that demand for US debt isn’t unlimited, and we could run into higher borrowing costs if investors lose their confidence in our ability to pay them back in the long run.
The debt ceiling isn’t the mechanism for the GOP to use to force a compromise on spending, certainly. And what future spending to cut is also certainly up for debate. But I think that Obama, other Democrats, and progressives are seeing the national debt as the sizable problem that it is.
Rike and JasonTD, you are, of course, correct that the debt is a problem that must be addressed. But it is not the debt ceiling’s problem.
Congress authorizes the spending of public money. If it didn’t want debt, it shouldn’t have spent the money. Having already spent the money, however, it’s ridiculous for it now to say it won’t cover its incurred debt. It’s like saying, “Yes, Mastercard, I know my wife owes you a thousand dollars, but I”m not going to let her pay you until she revises next year’s household budget.”