The debt ceiling—the legal limit of what the nation can borrow—is not on the lips of many Americans, but it is the latest political hostage in the budget battles that can reshape our nation. Right now, the government borrows about 40 cents of every dollar it spends. Sometime in mid-May, we are expected to hit the debt ceiling and can’t borrow any more.
The Obama Administration wants to raise the debt ceiling, while many Republicans (and even some Democrats) say they would vote for that only if the White House also agreed to more spending cuts. It appears to be another case of brinkmanship: without raising the debt ceiling, the nation might go into default—something that has never happened before. Default—failure to repay principal or interest—would be a bad thing, everyone agrees.
But everyone doesn’t agree that a default would be inevitable if we hit the debt ceiling, despite the dire warnings. As The Economist points out, there is plenty of cash coming in to cover interest charges for the rest of the year. There are other options among the world’s economic legerdemain and shell-shuffling that our government could use to avoid default.
A true default is serious business, but the debt ceiling is a bit of a red herring. We’ve raised the debt ceiling ten times in the last 10 years. Whether Republicans or Democrats supported it depended more on who was in power than anything else, notes Jon Healey of the Los Angeles Times. And Healy notes something else that has been overlooked: The budget resolutions approved by House Republicans—if they became law—would require raising the debt ceiling several times in the next decade.
How much do you think Americans know about the debt ceiling?
How much do you think Americans care about the issue?
This week, what’s your “take” on the remaking of America?
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(Originally published at www.OurValues.org, an online experiment in civil dialogue on American values.)