HomeUploadUpload DirectHotlinkRandomAbouttheme toggle

3 Reasons Why The Debt-Ceiling Debate is Full of Malarkey

Views: 1010
All anybody in Washington can talk about these days is the debt limit or debt ceiling -- the total amount of money the federal government is authorized to borrow at any given time. After a decade in which spending increased by more than 60 percent in inflation-adjusted dollars and the debt limit was raised no fewer than 10 times, the government is about to max out its $14.3 trillion credit line, leading to fears that Washington is going to default on its bonds, stop cutting Social Security checks, and destroy the economy more than it already has.

But the current debate over the debt ceiling is full of malarkey for at least three reasons.

  1. August 2 is a phony deadline. Treasury Secretary Timothy Geithner has pushed back the drop-dead date when the U.S. finally reaches its limit a bunch of times already: March 31, April 15, May 31 were all cited as deadlines before August 2 was inked in as Armageddon. But this time, he means it, man, really.


  1. Reaching the debt limit is not the same as defaulting on our debt -- which would indeed be catastrophic.


Think about it: You can max out your credit cards but as long as you keep paying the minimum amount due each month, your creditors don't go crazy. Interest on the debt is a small fraction of total outlays and the government has a series of tools -- from using cash on hand to selling assets to scrimping on nonessential payments -- to make sure interest payments are made and seniors aren't put on an all cat-food diet.

  1. Legislating-by-Panic is no way to run a country. The reason we're in this mess is because government can't stop spending. And the government can't even pass a budget on a year's notice. But we're expecting them to come up with a good plan for the country's borrowing in a couple of weeks? Trying to force through an expansion of the country's credit line by promising cuts in spending down the road is exactly why we're in this situation to begin with.


It makes far more sense to do something like sell some TARP assets -- the government is sitting on $320 billion in outstanding direct loans and equities investments -- to cover interest payments through the end of the fiscal year then force Congress and the president to come up with a budget that cuts spending -- and borrowing -- for real, next year, not is some distant future.

For more information, check out Nick Gillespie's 5 Uncomfortable Facts About the Wonderful, Horrible Debt-Limit Debate: http://reason.com/archives/2011/07/08/five-uncomfortable-facts-about

And Mercatus Center's Jason J. Fichtner & Veronique de Rugy's The Debt Ceiling: What is at Stake: http://mercatus.org/sites/default/files/publication/Debt%20Ceilling.deRugy.Fichtner.4.28.11.pdf

About 2.35 minutes.

Produced by Nick Gillespie and Meredith Bragg, edited by Joshua Swain.

Go to Reason.tv for downloadable versions, and subscribe to Reason.tv's YouTube Channel to receive automatic notifications when new material goes live.
@ReasonVidsfollow
Thumbnail for Carmageddon or Lameageddon? Billion Dollar Project Isn't Apocalyptic After All3:31
Carmageddon or Lameageddon? Billion Dollar Project Isn't Apocalyptic After All
ReasonVids
913 views
Thumbnail for Porker of The Month (June 2010): Sen. Richard Shelby, Who Made Pigs Fly in Outer Space!1:17
Porker of The Month (June 2010): Sen. Richard Shelby, Who Made Pigs Fly in Outer Space!
ReasonVids
818 views
Thumbnail for How Payday Lenders & Check Cashers Help the Poor13:11
How Payday Lenders & Check Cashers Help the Poor
ReasonVids
829 views
Thumbnail for The High Value of Low Speech: Attorney Robert Corn-Revere Defends The Right to Offend35:00
The High Value of Low Speech: Attorney Robert Corn-Revere Defends The Right to Offend
ReasonVids
862 views
Thumbnail for Joe Biden’s Endless River of Debt and Regulation3:37
Joe Biden’s Endless River of Debt and Regulation
ReasonVids
907 views
Thumbnail for National School Choice Week Lights Up Chicago2:02
National School Choice Week Lights Up Chicago
ReasonVids
810 views
Thumbnail for Three Steps To Get Our Highways Moving Again1:55
Three Steps To Get Our Highways Moving Again
ReasonVids
890 views
Thumbnail for Meet the Marijuana Industry's Newest Customers: Dogs3:19
Meet the Marijuana Industry's Newest Customers: Dogs
ReasonVids
806 views
Thumbnail for This never gets old0:45
This never gets old
bestofupgoat
367 views
Thumbnail for Uhg, your car is done, GODDDDDDUH! 0:22
Uhg, your car is done, GODDDDDDUH!
bestofupgoat
96 views
Thumbnail for Progress Party Leader Siv Jensen on Norway's Myths and Realities5:37
Progress Party Leader Siv Jensen on Norway's Myths and Realities
ReasonVids
893 views
Thumbnail for Nice Shot! (drone ded no gore)0:11
Nice Shot! (drone ded no gore)
bestofupgoat
70 views
Thumbnail for Play nigger games, win...?0:04
Play nigger games, win...?
bestofupgoat
43 views
Thumbnail for Chris "Jesus" Ferguson Cutting Carrots at Reason0:53
Chris "Jesus" Ferguson Cutting Carrots at Reason
ReasonVids
1044 views
Thumbnail for Martin Luther King Jr.'s Unwavering Opposition to Violence Still Matters4:55
Martin Luther King Jr.'s Unwavering Opposition to Violence Still Matters
ReasonVids
970 views
Thumbnail for Attack Ads, Circa 18001:43
Attack Ads, Circa 1800
ReasonVids
961 views
Thumbnail for The Endangered Species Act Didn't Save the Alligator7:17
The Endangered Species Act Didn't Save the Alligator
ReasonVids
869 views
Thumbnail for Kids Dance Party! 💃🕺 The Wiggles 24/7 Live Stream 🎉 Learn to Dance | The Wiggles - Kids Songs and Nursery Rhymes1:00
Kids Dance Party! 💃🕺 The Wiggles 24/7 Live Stream 🎉 Learn to Dance | The Wiggles - Kids Songs and Nursery Rhymes
invidious
313 views
Thumbnail for The FDA's New and Improved Cigarette Warning Labels1:57
The FDA's New and Improved Cigarette Warning Labels
ReasonVids
798 views
Thumbnail for Nina Jankowicz could have been a multi-platinum Wizard Rock star—but when duty called, she devoted her talents to eradicating cyber-sexism in Belarus. A modern day Glenn Miller.0:42
Nina Jankowicz could have been a multi-platinum Wizard Rock star—but when duty called, she devoted her talents to eradicating cyber-sexism in Belarus. A modern day Glenn Miller.
bestofvoatxyz
903 views
Thumbnail for Mayor Ed Koch on rent control, his sexuality, Andrew Cuomo, and how he helped save New York18:06
Mayor Ed Koch on rent control, his sexuality, Andrew Cuomo, and how he helped save New York
ReasonVids
864 views
Thumbnail for California’s Teachers Unions Are Still Fighting to Keep Children at Home8:06
California’s Teachers Unions Are Still Fighting to Keep Children at Home
ReasonVids
912 views
Thumbnail for Shipwrecks, Treasure and Cannon Fire: The True Story of an American Privateer6:01
Shipwrecks, Treasure and Cannon Fire: The True Story of an American Privateer
ReasonVids
961 views
Thumbnail for Gary Johnson Voters Explain Why They Aren't to Blame for President Trump4:21
Gary Johnson Voters Explain Why They Aren't to Blame for President Trump
ReasonVids
875 views

points

Permalink
Reply
nick, gillespie, libertarian, reason.tv, reason, foundation, three, reasons, debt, ceiling, timothy, geithner, august, 2nd, default, limit, washington, obama, republicans, budget, meeting, gop, federal, spending, taxes, tax, tarp, assets, panic, legislating, economy, recession, credit, cards
TOS  •  Add Keywords  •  Donate  •   Analytics  •   DMCA  •   Puzzle