If I am remembering correctly, we either looked at this article during class or an article very similar to it. The content of this article- debt, debt ceiling, debt limit- perfectly relates to what discussed today. So, even if this article was already discussed in class, reading the entire thing was great and could be great for further blog discussion.
"President Barack Obama, facing a battle over raising the U.S. borrowing limit, made clear Monday that he sees no alternative to Congress voting for an increase and said that not doing so would be "irresponsible" and "absurd." The article poses a clear divide between what the Republicans want and what the Democrats and President Obama want. The Republicans want to extract cuts in Federal spending, while Obama and his party want to raise the debt limit and "pay America's bills." I agree with the pressure the Democrats are giving Obama that he should, as the article states, "use any 'lawful means' to avoid default." However, I also understand and see positive with the Republican stance stated as, "Republicans have said an increase in the debt limit must be paired with spending cuts of equal size." Based off this article and today's class discussions, what do you guys think? What is best to do in this fight?
It seems to me like there is no easy solution to the problem at hand but I do agree that spending cuts will have to made. When a person thinks about the debt, trillions of dollars is just inconceivable. I also believe that a default would be a fatal blow to our economy but the Republicans, at least for right now, are trying to cut the deficit with out raising the debt ceiling to high, which is what they are there to do. Push for what they believe is right for the population.
ReplyDeleteI like Bernake's analogy of a house deciding not to pay its credit bills. If the government increases the limit they would just be getting a new credit card and making the situation even worse in the future. It is time we address the debt crisis once and for all. I do agree with the president on this, it will be absurd to increase the debt limit
ReplyDeleteIt is important to keep in mind, however, that there is nothing magical about going from 20 bn below the debt limit to 20 bn above the debt limit. The debt limit is an arbitrary number, not a meaningful concept. When we look at the state of U.S debt, it's not as bad as it seems. Our real borrowing rates are almost (possibly still are) negative. Yes, over the next 50 years we have to reduce the rate of health care cost increases and decide if we want a majority of Americans (instead of just the 1 percent) to pay more taxes or cut entitlements. But, that's no reason to go slashing what little discretionary spending we do have (except, in my opinion, for military, where we spend as much as the next 15 highest spenders combined, most of whom are in an explicit military alliance with us.)
ReplyDeleteI say let's do a real grand bargain where we address the long term issues in our tax code, social security, medicare, and defense, or don't do anything at all. At this point, it'd be better to just help the economy recover than fight about air traffic controllers and temporary tax cuts every year.
Also interesting is this post collecting quotes from conservative economists who "support raising the debt ceiling.
I agree with Rohitha that the solution to the problem is not easy because the battle between Republicans and Democrats, the President and Congress will never end. Republicans and Congress fight to protect their money, benefits while the President and Democrats fight to protect the people. There will be no winner or loser in this fight, there will be only people suffering from it. "After the 2011 fight over the debt ceiling, the ratings firm Standard & Poor's downgraded U.S. debt for the first time in 70 years". Who can even predict what will happen after 2013 fight over debt ceiling? It is time for Republicans and American politicians to put their country first before their benefits so that this fight will be over.
ReplyDeleteI'd like to think that this is just a strategy that the Republicans are using to get at least some of what they want. The way our policy makers are set up, it is a war between Republicans and Democrats. I don't blame the Republicans or the President. Since we, the People, allow this war to go on, the political parties will continue to use war strategy to get there way and the country will just remain as innocent civilians. I think this is a prime example of major problems in our political system and how these problems effect more than just "politics."
ReplyDeleteRaising the US debt is a complex decision not only by the politics point of views but also by the economic consequences. On the one hand, I think that the previous credits were used "irresponsibly". I do not understand why the government spent money in bailouts. When a bank is good and growing, the government does not receive any penny. Why did the government have to react when they are in instable situation? The government have spent more than 140 billions of dollars in the bailouts. This stratety was a terrible deal for the taxpayer. They do not paid only social security but also bailouts. At that point, the idea was avoid a financial collapse. Republicans and Democrats forget the mark-to-market rule. However, when the government have to pay its own debts, Republicans rememers its markets policy and reject the credits. I know that the rising of the debt may cause some risks in its financial sector but the decision is incoherent.
ReplyDeleteI personally agree with the Republicans here. At some point we are going to have to address this growing deficit. I don't like the Scarlett from Gone With the Wind approach of "I'll worry about it tomorrow." Tomorrow is here. Tomorrow has been here for awhile. Pretty much every teacher i've ever had has told me not to procrastinate. I feel like thats what our government is doing with this debt ceiling issue. I'm all for dealing with this asap. I think that taxes should be raised on not just the upper class, but the middle class as well. All Americans need to help not only keep the deficit from growing, but starting to shrink it. I also am a huge supporter of cutting spending, especially on entitlements. I think the only way to tackle this problem is through a few years of "tough love".
ReplyDelete