At an average of more than once a year, American policy makers grapple with the same old tedious fiscal debate — to cut spending or to not cut spending. More often than not, they conclude by throwing their hands up in the air, finding it too much of a hassle to change the trend of mounting debt. Instead, they authorize yet another instance of inching up federal liability.
"That'll work … until we hit this wall again a few months from now," exclaims Congress.
In the past half-century alone, lawmakers have pushed up the debt ceiling 79 times. Yet approximately one third from a sample of Americans interviewed last week by NBC said they were unsure of their stance on the matter. And a whopping 44% stood adamantly against raising the federal debt ceiling — even as Congress is poised to pull the trigger for the umpteenth time.
Shamefully, in the world's most emphatic democracy, most citizens are opposed or oblivious to where federal debt is headed.
While America shuts its eyes to the fiscal crisis, lawmakers set faulty budgets, allowing spending that their pre-determined debt limitations do not allow. It is the equivalent of someone with a fixed income habitually spending more than they earn, banking on the local bank to issue as many overdrafts as their rising expenses demand.
But wait. It gets worse.
In a survey, 87% Americans did not feel the federal budget deficit was the most pressing issue before their nation. There are more pressing priorities.
Do they know that at present, interest payments exceed federal outlays on education, transportation, housing, and urban development summed together? I doubt it. But regardless of their knowledge, every time America raises the debt ceiling, the average American is more likely to pay more and more of their income towards federal interest payments.
On the other hand, if we don't raise the debt ceiling, it may fall and make rubble out of the American economy.
By mid-October, the Treasury may lose its ability to borrow and pay government bills, unless Congress agrees to raise America's federal borrowing limit. This could delay payments for Social Security benefits, infrastructure costs, defense contractors, unemployment benefits, college grants, Medicaid and Medicare payments, tax refunds, federal salaries — the list goes on.
As for the rest of the world, America's image as an international financial giant already took a hit 2 years back when Standard & Poor downgraded the U.S. federal rating for the first time since 1941. International confidence in the U.S. economy is at stake again as investors scramble to find alternatives.
How long can we ignore exponential increases in federal debt?
Why do our politicians wait for potential blocks to raising the debt ceiling before confronting pressing policy decisions?
The answers evade us, mostly because we don't seem to be in any hurry to find them. The way fiscal debate plays out each year to no effect is laughable. President Obama himself has alternated between both sides of the debate, calling raising debt ceilings a failure of government in 2006 before joining in with the rinse, lather, repeat approach himself.
Congress is well aware that America cannot possibly default on its payments. If America's economy is to continue ticking and American government is to continue functioning, the debt ceiling must be hauled up yet again, with or without public approval.
Cut spending? Raise taxes? These are questions we need to answer fully, with year round efforts and analysis. Last minute panic won't get us anywhere. One can only hope America realizes this before its too late.