The Senate opened debate Wednesday on a plan to raise the nation's debt limit by $1.9 trillion, a move that Democrats hope will see the Treasury through this fall's congressional elections.The record increase would raise the Treasury's legal ceiling for borrowing to $14.3 trillion -- about the size of the nation's overall economy.More here.
This is like a family who makes $100,000 per year agreeing to run up their credit cards to 100,000. This is a dangerous level of debt for our nation. So part of the talks center around creating a Budget Commission to look into ways to make spending cuts. Odds are they will also want to raise taxes, as the majority of the commission would be Democrats.
Republican commission advocates remain skeptical that a presidentially appointed panel would have the clout to tackle the nation's toughest fiscal problems. Sen. Judd Gregg (R-N.H.), a sponsor with Conrad of legislation to create a budget commission by law, called a presidentially appointed panel "a fraud" designed to do little more than give Democrats political cover.More here.
"It's a fraud among anyone interested in fiscal responsibility to claim an executive order could structure something that would actually lead to action," Gregg said.
Some Democrats, particularly in the House, where leaders have long resisted relinquishing their authority over taxes and spending, are also less than optimistic. Under the agreement, the commission would have 18 members, including six lawmakers appointed by congressional Democrats and six lawmakers appointed by congressional Republicans. Obama would appoint six others, only four of whom could be Democrats.
Fourteen commission members would have to agree on any deficit-reduction plan, a prospect that skeptics called a recipe for gridlock because action would depend on the support of at least two Republicans for a plan that is sure to include tax increases.
A comment on my blog from Stephen M. Nielsen yesterday got me thinking. He points out that this would be the fifth such debt increase in 2 years. He blogs:
For the sake of argument, the failure to extend the debt will mean that the US Treasury will default on its debt for the first time in history, causing the absolute collapse of the US dollar as an international standard currency, and sparking an undoubted fire sale of US Dollars on the foreign market bankrupting the Nation overnight.
I argue that this is not such a bad thing.
The US has REAL WEALTH right beneath our feat. Our natural reserves, forests, ore, etc are the foundation that made this nation prosperous - throw in a little good old fashioned ingenuity and you have more than you will ever need at your fingertips. The concept of passing debt on to future generations is in direct contradiction to the ideals of George Washington et Al. We should draw our nets up around our real wealth, minimize government while maximizing individual success and prosperity, and get this nation back on track as the torch bearer for liberty.
This is the comment I left on Mr. Nielsen's blog:
We definitely are drunk on borrowed money.
I am worried that going cold turkey would injure us badly. Is there a short program of detox that everybody could agree to?