America has maxed out its credit card once again.
Treasury Secretary Jack Lew informed congress on Friday that he will once again have to use “extraordinary measures” to keep the government under the legal debt ceiling after a suspension of the limit expires today.
Translation…beginning on Monday the government will have to rob Peter to pay Paul if congress doesn’t extend the government’s credit card limit. Without an extension the government will default on its obligations. Estimates are that the Treasury Department can play its little shell game until sometime in October; after which the government will shut down dragging the US and world economies down the tubes.
Raising the debt ceiling should be a no brainer. It is simply an authorization by congress to allow the government to borrow the money necessary to pay for the goods and services it has already acquired and consumed. But this is Washington and nothing is ever easy. Partisan politics have a way of making even the simplest of matters difficult. There is already talk of Republicans agreeing to raise the debt limit only if Democrats agree to changes in the Affordable Care Act.
We’ve seen this movie before.
In 2013 Tea Party Republicans refused to allow an increase in the debt ceiling unless Democrats agreed to a number of spending cuts. Democrats refused; repeating the logical argument that raising the debt limit was to secure payment for past expenses not future spending. The deadline past…the government shut down…hundreds of thousands of government workers were furloughed…Standard and Poors downgraded our credit rating…and the GDP took a $26 billion dollar hit. All for a 17 day political stunt.
On March 8, 2015 Senate Majority Leader Mitch McConnell appeared on CBS’s Face the Nation where he repeated a point that he has made several times since his party took control of congress:
“I made it very clear after the November election that we are certainly not going to shut down the government or default on the national debt.”