The ceiling will be raised from its present horrendous $14.3 trillion – that’s 14.3 plus 11 zeros (00.000,000,000). That’s guaranteed! [Otherwise,] the alternative would be the U.S. defaulting on its debts, losing its Triple A credit rating [and being] unable to pay the seniors their benefits, or the military [or its] creditors beyond Aug. 2. [There’s more! Read on.] Words: 565
So says Peter Worthington (www.frumforum.com) in edited excerpts from an article* which Lorimer Wilson, editor of www.munKNEE.com (It’s all about Money!), has further edited ([ ]), abridged (…) and reformatted below for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement. Worthington goes on to say:
The Situation: Debt vs. Taxes
Basically, the Republicans – led by the rash of new Tea Party Representatives elected last November – want draconian cuts in government spending coordinated with raising the debt ceiling [while] President Barack Obama wants the debt ceiling raised, along with select spending cuts and tax increases to bridge the gap. That need for tax increases strikes the Tea Party Republicans and others… as self-defeating. Obama [does not acknowledge] that if the debt ceiling is raised, and more tax money is available, spending will increase — not diminish. That’s just the way it is with governments—all governments. The more money that’s available, the more they spend.[While] Obama (and Congress) may agree on some cuts, if taxes are raised along with raising the debt ceiling, government spending will inevitably increase in other areas [because] Government rarely cuts programs once they’ve been started. We members of the public know this. It is part of the reason why stock market investors are not yet panicking over the gloom and doom being dispensed by Republicans and Democrats…
Taxes and Confidence
One of the intangibles necessary for America’s financial recovery is the confidence felt by the American people. Without confidence, the unemployment rate will rise, businesses will stagnant, fear will become endemic. Entrepreneurs will run for cover. It hasn’t reached that stage yet – witness the stock market which still seems to rally and thrive…[- but] a sure way to undermine middle America’s already fragile confidence is to raise taxes. Canadians feel the U.S. taxes are reasonable (compared to their own), but Americans feel they are already taxed to the hilt. They aren’t, but that’s irrelevant if they think they are.
Where Americans have a good understanding of their government, [though] is that more taxes mean more government spending [and] common sense dictates that it’s a false hope to think you can spend your way out of economic malaise.
Anyway, it’s all academic. The debt ceiling will eventually be raised and an accommodation will be reached. The Republicans are probably more right than wrong, but in the national interest they will compromise – but if they compromise too much, woe betide them in the 2012 election.
- Raising the Roof – On a Higher Debt Ceiling That Is! http://www.munknee.com/2011/05/raising-the-roof-on-a-higher-debt-ceiling-that-is/
- Top Myths on the U.S. Debt-ceiling Crisis http://www.munknee.com/2011/05/top-myths-on-the-u-s-debt-ceiling-crisis/
- America’s Political Process Guarantees Another Financial Crisis! http://www.munknee.com/2011/03/america%e2%80%99s-political-process-virtually-guarantees-financial-crisis-2-0/
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given as per paragraph 2 above