Although the US debt ceiling currently stands at $12.1 trillion, the ceiling could be shattered by October as the national debt is rapidly approaching $12 trillion. Should the national debt be allowed to grow without limit?.
Tim Iacono from The Mess That Greenspan Made discusses this.In a letter to Congress yesterday, Treasury Secretary Timothy Geithner urged elected officials to raise the $12.1 trillion debt ceiling since, according to current projections, that limit may be reached as soon as mid-October
Now, let's break this down. Our current total debt is about $11.5 trillion. There was recently a report that the deficit just for the month of July that was about $180 billion. S, at that pace, we'll run up against the debt ceiling in the next couple months. The limit was last raised in February when the stimulus passed.
Now, what we have is not only incompetence but political nonsense all around. First, we've had this dubious "debt limit" for decades and each and everytime we got near it, it was raised. What's the point of a debt limit, if it's just going to be raised every time we near it.
Second, the administration is coming to Congress with the financial gun in hand. If the debt limit isn't raised, we will literally default on our debts. The Congress has no choice but to raise the debt limit. Meanwhile, the administration has gone on a spending spree for six months and suddenly realized that all this spending is threatening the debt limit. After spending $180 billion more than they took in in July, the administration suddenly realizes that soon they will spend so much that they will reach the debt limit.
Just think about that for a minute. They passed a stimulus, an omnibus spending bill, unveiled their budget, cap and trade, and health care, and now they realize that all of this spending might not be enough.
Furthermore, Geithner claims that raising the debt limit will be
critically important that Congress act before the limit is reached so that citizens and investors here and around the world can remain confident that the United States will always meet its obligations
In a sense that's true. That's because without raising the debt limit, we will simply default. On the other hand, what major creditors, like China, are really afraid of is the out of control spending that has caused us in six months to need to raise the debt limit again. This dance needs to stop. Congress sets a debt limit as if that's supposed to stop the government from out of control spending. The government spending with no control. Then, when there's no choice but to raise it, those in power come to the Congress to ask, but really to demand, that the debt limit be raised yet again.