Understanding the debt ceiling debate: Separating myth from fact

Understanding the debt ceiling debate requires separating myth from fact. This user handbook answers many questions. Photo: AP

LOS ANGELES, October 13, 2013 — The political battles over Obamacare, the government shutdown, and the debt ceiling are actually three separate issues. While there is some overlap, these three issues are of varying importance. Obamacare is a fight over a single piece of legislation. The shutdown has been met with a collective shrug, as most people remain unaffected. The debt ceiling is serious.

Away from the political fog, it is necessary to understand why the debt ceiling matters so that myths can be separated from facts.


SEE RELATED: Republicans’ unavoidable defeat on shutdown and debt ceiling debate


The debt ceiling is the borrowing limit for the United States government. Once reached, the United States would be unable to spend more. Like a credit card, there is a spending cap. Unlike a credit card, the government can raise its own “credit limit” — with congressional approval.

Raising the limit has always been routine. Why not now?

Conservatives have concluded that the debt is now unsustainable, and that raising it further would do long-term harm to the American economy. Liberals note the debt limit has always been raised, but conservatives say that is precisely the problem. 

Is defaulting on debt payments Armageddon?


SEE RELATED: What will really happen if we don’t raise the debt ceiling


Absolutely. Default could cause worldwide panic. America has never missed a debt payment. The dollar is the world’s reserve currency solely because it is 100 percent safe. Default must not happen under any circumstances.

President Obama claims that raising the debt ceiling does not mean more debt.

This is theoretically true, but ludicrous in reality. Raising the ceiling does not automatically increase spending, but every single increase has been followed by more spending. Asking for more credit without needing or using it defies history and common sense.

Does refusing to raise the debt ceiling mean default?

Absolutely not. Limiting the debt ceiling forces Obama to make painful budgetary choices. He could slash social, other domestic, or military spending. The 14th Amendment to the Constitution mandates that all debts be paid first. Social Security payments also go out as scheduled as a priority. Default would be solely President Obama’s decision and a Constitutional violation.

America takes in between $225 to $250 billion per month. Interest on debts is only about 10 percent of that. Plenty of money remains to service foreign debt and avoid default.

How did America get $17 trillion in debt?

America was $5 trillion in debt when President George W. Bush took over. After 9/11, America waged wars in Afghanistan and Iraq. While the left staunchly disagreed with the war spending, the amount was minuscule compared to what really eats America’s budget.

Entitlement spending on Social Security and Medicare has America facing $90 trillion in unfunded liabilities. When Obama entered office, the debt was $10 trillion. So while Bush added $5 trillion in eight years, Obama has added $7 trillion himself in only five years. Obamacare has added over $1 trillion alone.

Isn’t Obama asking Congress to pay for bills Congress already racked up?

No. This sound bite is false. Republicans opposed the expenditures, but Democrats controlled both houses of Congress for the first two years of Obama’s presidency. Most congressional expenditures are specifically designed to mirror a president’s priorities. Republican congresses passed Bush’s agenda. Congressional Democrats enacted Obama’s desired expenditures. The spending is Obama’s spending. His passing the buck to Congress and distancing himself from it is disingenuous.

Isn’t the deficit falling?

This is technically true, but misleading. The sequester temporarily reduced the deficit. Obama wants to repeal sequestration. The sequester contains no actual spending cuts, only reduced increases in growth. Additionally, falling deficits do not mean reductions in actual debt. Debt is still increasing, only at a slower rate. If the sequester is repealed, spending will skyrocket again.

Why does Obama want another debt limit increase?

He is a committed liberal who deeply believes that increased government spending will improve society. Conservatives disagree. This ideological struggle is as old as civilization.

What specific new expenditure(s) does he need to fund?

Education. Obama has said for years that his top three priorities are healthcare, environmental-energy issues, and education. He passed healthcare and used executive orders to fund green energy projects. His last main goal is to “invest in education.” While initially undefined, he wants mandatory pre-school for all children. This requires a new government program, just as healthcare did.

Would Obama let America default?

Possibly. He believes “no pain” for Americans, “no gain” politically for himself. He used the sequester to close White House tours. The strategy backfired politically, but the precedent was set. Obamacare is his prized program representing his deepest ideological beliefs. Default would hurt the world. Repealing Obamacare would hurt him.

If Obama thought Republicans would be blamed for global collapse, he might allow default. On his watch, America’s credit rating was downgraded for the first time ever. He still won reelection. Nothing in his political DNA suggests he would voluntarily scale back Obamacare rather than allow a catastrophic but possibly politically beneficial default.

Is refusing to raise the debt ceiling irresponsible?

This is the crux of the entire argument. Democrats and some liberal Republicans say yes. Conservatives argue that continuing to spend money until America is broke would be irresponsible. In the long run, the house of cards that is the global financial system will collapse if spending is not reined in. No individual, business or government can spend more money than it collects without eventually having their line of credit cut off. Delaying painful choices makes the inevitable reckoning worse.

 

Brooklyn born, Long Island raised, and now living in Los Angeles, Eric Golub is a politically conservative columnist, author, public speaker, satirist and comedian. Eric is the author of the book trilogy “Ideological Bigotry, “Ideological Violence,” and “Ideological Idiocy.”

Eric is 100% alcohol, tobacco, drug, and liberalism free. Follow Eric on Twitter @TYGRRRREXPRESS. Follow us: @wtcommunities on Twitter.


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Eric Golub

Eric Golub is a politically conservative Jewish blogger, author, public speaker, and comedian. His book trilogy is “Ideological Bigotry,” “Ideological Violence,” and  “Ideological Idiocy.” 

He is Brooklyn born, Long Island raised, and has lived in Los Angeles since 1990. He received his Bachelors degree from the University of Judaism, and his MBA from USC. A stockbrokerage professional since 1994, he began blogging on March 11th, 2007, the three year anniversary of the Madrid bombings and the midpoint of 9/11. He has been inflicting his world view on his unfortunate readers since then. He blogs about politics Monday through Friday, and about football and other human interest items on weekends.

 

 

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