Debt limit fight is serious
POSTED: Sunday, October 6, 2013 - 5:40pm
UPDATED: Wednesday, October 30, 2013 - 5:45am
It doesn’t really make any sense.
Almost no one does it the way we do.
Only one other democracy has a debt ceiling that must be approved.
Denmark has a debt ceiling, but they set it high enough that they don’t have these periodic political standoffs.
Everyone else simply borrows what they need when they need it.
The debt ceiling is currently $16.7 trillion.
But now, in 11 days, we bump up against it again, and this time it comes in the midst of another crisis, the government shutdown.
And though that is harmful to the economy, and expensive, it is dwarfed by the potential for harm of a US default on debt.
The debt limit hike was always just a formality, since everyone knew it isn’t authorizing more spending, but simply paying for what has already been approved by congress. But the public may not be aware, and see it as just more Washington wastefulness.
The last crisis in 2011 resulted in the US credit rating being downgraded from triple A.
That costs us real money in terms of US borrowing.
And the world is watching again. And both sides are digging in, again.
But this time, the stakes are enormous.