Hello, MasterCard? Can you raise my Uncle Sam’s credit limit?
Click here to listen to the broadcast of You Tell Me on KTBB AM & FM, Friday, Jan. 07, 2011.
Here’s a multiple choice question. Who said the following?:
“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”
The person who delivered this quote could not possibly be more correct. So who said it?
Was it, a.) House Speaker John Boehner? Was it, b.) Senate Minority Leader Mitch McConnell? Or was it, c.) neither of the above? If you chose answer “C” you are correct.
In fact, the author of this quote is none other than Senator Barack Obama, addressing that body on March 20, 2006. It seems that when Senator Obama was lobbing criticism at the president he was hoping to replace, raising the debt ceiling signified a failure in leadership.
However, now that the need to again raise the federal debt limit has arisen on the watch of President Obama, failure to raise the ceiling will be, according to administration economic adviser Austan Goolsbee, ‘catastrophic’ and a sure sign of ‘insanity.’
Insanity, Mr. Goolsbee? That’s a bit strong, don’t you think?
Let’s say a family has a credit limit on its MasterCard that has been raised so many times that it now equals that family’s total household income for a year. And then let’s say that even with that massive credit limit, the family MasterCard is again maxed out. And let’s further say that the only way that the family can make the minimum payments on the MasterCard is to get cash advances on the VISA (which is now also maxed out).
Insanity would be for this family to seek a credit limit increase and for either MasterCard or VISA to give them one.
Yet this simple illustration almost exactly describes the current state of the federal government.
The government is about to run out of borrowing authority again and now that what we hope are chastened Republicans are back in charge in the House, the once routine raising of the statutory debt limit is no longer routine.
Republicans are insisting that the debt ceiling cannot be raised absent substantial cuts in spending. Some are even advocating a cold-turkey end to the deficit.
Democrats are shrieking as if having a sensitive appendage cut off.
But here are the facts. The debt ceiling will have to be raised because there is no turkey cold enough, as the Weekly Standard’s Bill Kristol put it, for the government to cut the deficit quickly enough to avoid the need for more borrowing.
But real and substantial spending cuts must nevertheless begin. To do less assures financial doom. Which is why the debt limit should not be raised in the absence of those cuts.
When the debt ceiling debate comes to the House floor, we’ll know soon enough if there’s truly a new sheriff in town by whether or not Speaker Boehner and House Republicans stand their ground.
If the Democrats stop shrieking, you’ll know we’ve lost.