The Imperatives of Raising the debt ceiling

During the pressing moments of the First World War, the United States Congress, via the Second Liberty Bond Act of 1917, established a restriction on the total amount of the debt that the United States government could accrue. At this time, the Congress had come up with a number that they had once thought impossible to reach, and yet with inflation, interest payments, and time they came to approach that number.  With the even recently raised debt ceiling of approximately $14.3 trillion, without legislative action, the United States approaches default, otherwise known as a situation where we have no way to pay back our debt as bonds mature. Negotiations over the conditions of a bill to raise the debt ceiling and avoid a catastrophic default on the U.S. government’s debt have been pending in Congress with some suggesting no action in order to halt government spending.  Using leverage and other political tools has become an almost irreconcilable part of modern politics, and is further demonstrated by this debt crisis; however, in this instance, it is my opinion that the Congress is playing with fire and cannot risk the burn.

The consequences of defaulting would be numerous and detrimental to the livelihood of the United States.  First, the United States’ credibility as both an economic and political unit would be shattered. Our position as a world leader, and subsequently what the world thinks of us, constitutes the foundation of greatness for the principle ideology of democracy.  Thereby, a failure of democracy’s representative reflects upon the concept of democracy in itself and forges an inability of the United States to voice its concerns on human rights violations and spread the freedoms the U.S. has stood for since its foundation. Furthermore, anyone fluent in economics could note that the result of the United States defaulting on its debt would impact all American’s purchasing power, or ability to purchase products made abroad cheaply. In addition, in a scenario in which the United States defaults on its debt by confronting the debt ceiling one of two things, if not both, would have to occur: The U.S. would have to substantially raise taxes, seriously cut entitlement spending, or a moderate combination of both.  However, any way the situation plays out, Americans who cannot afford tax increases or depend on entitlements such as Medicare, food stamps and welfare would suffer, voters would be angered and all around the quality of American life would diminish. This impending crisis has nationwide and countywide implications that should not be ignored, especially while the economy remains in its current state.

By: Alex Weiner