Why the Debt Ceiling Suddenly Matters
Aug 1, 2011 at 3:30 PM
I can only imagine how confusing the sudden “Debt Ceiling Crisis” must seem to everyday Americans. For the first time since almost anyone can remember, the almost yearly ritual of raising the federal government’s borrowing capacity actually seems to matter. President Obama, politicians, and so called “economists” are telling us that Congress must use a compromised, “balanced” approach in raising the debt ceiling.
We have been forewarned on what to expect if this does not happen. Yesterday, Credit Suisse predicted that the stock market would fall 30% if a deal wasn’t reached by the August 2nd deadline. Additionally, last Monday President Obama proclaimed that all functions of the federal government would shut down immediately in the event of debt default. Specifically mentioning a halt on Social Security checks, veterans’ benefits and all government contracts, Obama seems to be just as terrified as you and I should be.
Rioting in the streets!
Not so fast. Unfortunately, the raising of the federal debt has been a common occurrence since 1917, when congress passed the Second Liberty Bond Act to help with the government’s financing of the United States’ involvement in World War I. In fact, the debt ceiling has been raised 77 times since 1962 and even three times in the last three years, twice in 2009 and once in 2010.
With all this debt raising, one has to ask: What’s the big deal this time?
Suddenly, Congress is selling us the pretense that the current debt ceiling vote is a battle of ideology. Left versus right, liberal versus conservative. Nothing could be further from the truth. As a fellow blogger pointed out a few weeks ago, in a 2006 vote every Democrat in the U.S Senate voted against raising the debt ceiling, and all but two Republicans voted for raising it.
Clearly the current drama in Washington is nothing but pure political posturing. Congress’ complete lack of principle (with the obvious exception of a select few) is completely laughable.
The real reason why we are hearing about the debt ceiling in the summer of 2011 has much to do with how the Tea Party and liberty movements have shaped the debate in Washington during the past year. Last November, journalists were already speculating whether successful Tea Party candidates such as Rand Paul were going to actually follow through with their libertarian rhetoric and demand balanced budgets and reductions in the federal debt.
Luckily, the mere fact that there is debate on the debt ceiling speaks volumes for candidates such as Sens. Paul, Lee and Rep. Justin Amash.
It is certainly understandable to be frustrated at the seemingly inevitable “compromise” which congress will reach in the coming days. However, I do think that both Tea Party and libertarian activists should take time to consider how far the national debate has shifted in the last year.
We must be doing something right.