Why the Debt Ceiling Suddenly Matters

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.
Pandemonium!
Rioting in the streets!
Chaos!
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.
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