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Democrats face the debt problem

By
August 1, 2007

The Democrats knew when they took over Congress in January that sometime during the year they would have to raise the ceiling on the national debt. After all, raising the limit, which allows the Treasury to keep borrowing, was done four times in five years under President Bush and the Republicans.

And, when the Democrats were the minority, lifting the debt limit was the occasion for good political fun, noting that when Bush took office the national debt was $5.6 trillion and declining. Now, however, thanks to steep tax cuts and profligate federal spending, the national debt was soaring. The Democrats enjoyed pointing this out.

The debt is now bumping up against the $9 trillion limit, and Treasury Secretary Henry Paulson warned this week that the ceiling should be raised “as soon as possible” lest the federal government be unable to pay its bills.

Congress likes to stall around on this unpleasant task, so the Treasury has a variety of ways to buy a limited amount of time by juggling various accounts. If any Congress would be so reckless and irresponsible — and, mercifully, none has — to exceed that time, the U.S. government would go into technical default.

No one expects that to happen, but just the fact of the Treasury having to engage in a financial juggling act, Paulson points out, creates uncertainty in the financial markets and increases borrowing costs to the government.

The Democrats have debated a variety of ways of cloaking a vote to increase the debt, but, really, as the majority party they have no choice but to grit their teeth, endure the jeers of the Republicans and vote to keep on borrowing. And they should do it soon.

7 Responses to Democrats face the debt problem

  1. dbbeebs

    August 1, 2007 at 7:05 pm

    We’ll either inflate the debt away or repudiate it.

    Think about all the commitments for pensions and Medicare for federal employees or others. It’s tens of trillions.

  2. Helen Rainier

    August 2, 2007 at 3:05 am

    Raise the debt limit? What a crock of crap. We are already in debt to the point that our country is owned by foreign governments — esp. China.

    Let’s shut down the damn government and tell the Bush enablers that they need to stop putting party loyalty aside and think about loyalty to this country.

    If they really want to be patriotic this is what they should do.

    I’m so sick of these mealy-mouthed GI Joe/girly men.

  3. Jeffrey B.

    August 2, 2007 at 5:29 am

    With Muhammed Ali, we had the ‘Rope-a-Dope’. Today we have the ‘Float-a-Dope’. Boot out the Fed and take our money back. After all – it is CONgress who has the authorization to print or in fact ‘coin’ money – NOT some privately owned corporation. That was Woody Wilson’s contribution to the united States – the Federal Reserve Banking System – or is that ‘Scheme’?

    Look it up in your Funk & Wagnall’s. Better yet, check in with Ron Paul.

  4. Jeffrey B.

    August 2, 2007 at 5:40 am

    Like it or not, they will have to raise the limit?

    You may be right – they’re contemplating giving themselves a raise. All departments of gubmint are growing like a cancerous tumor, the ‘War on Drugs’ has remained an abysmal failure as has the ‘War on Cancer’ and ‘No Child Left Behind’ (wherein they are ALL being left behind). Let’s not forget the ‘War on Terror’ (most of which is being committed by those in Washington DeCeit). The Post Office needs an increase in the cost of it’s ‘services’ every 18 months or so – ostensibly to replace the money CONgress borrows from the P.O. pension fund and every other supplementary reirement program they can get their hands on.

    If I ran my household budget the way THEY do – I would be put in jail for grand-larceny with no chance for parole – unless I was a FOBG – Friend of Boy George.

  5. gene

    August 2, 2007 at 5:44 am

    Debt….what debt? Oh you mean that paper we call money that is backed up by our “good faith”. That paper that is now worth 1/12 or less of its value compared to 80 years ago. Let these idiots raise the “debt ceiling” to the f**king moon and beyond, what does it matter.

    Now once other countries start refusing to take this paper that is backed up by (thin air) then we have a very serious issues, until then….print away and let the poor suckers dream.

    Don’t get me wrong here, this nation should have never come off the gold standard and our exchange for goods should be based on something of equal value, NOT worthless paper!!!.

    Get ready for some serious inflation in the near future.

  6. Sandra Price

    August 2, 2007 at 6:22 am

    Helen has the right idea. Close down the government, cut all expenses in half and I guarantee the people will demand we get out of Iraq.

    Gene is also right, we should never have gotten off the gold standard. We are a walking disaster!

    We will see if the Democrats can handle this problem and can think fiscally for a change.

  7. Helen Rainier

    August 2, 2007 at 11:25 am

    Sandra,

    The bottom line of the 110th Congress is that the Democratic Leadership is making the effort to introduce and pass legislation that We, the People have indicated WE want — such as stopping the War on Iraq.

    I’m certainly not happy with some of the issues they are bringing up (the immigration reform was disastrous) and quite frankly anything that Bush wants to have passed, I am summarily opposed to — because of Bush’s own record of doing what he can to destroy the Constitution and because he is a freaking chickenhawk and coward. Anything that Bush wants is going to be no good for We, the People and for the US Constitution.

    That said — the problem is not what the Democrats will do — the problem lies, as it has for the past 6 1/2 years with the Republicons who have given Bush everything he has petulantly demanded. They rubber stamped everything he wanted.

    As long as the Democrats keep introducing the legislation that We, the People want, such as getting out of Iraq, I will continue to support their efforts. If it means that once again, I believe it necessary to vote for a Democrat candidate for President I will do so.

    I will NEVER, and I mean NEVER vote for a Republican (which I have done on a rare basis — at the state and local levels only). I have normally voted for a third-party candidate or have written in my choices when I didn’t like either parties candidates.

    In fact, in 1988 when Bush 1 ran against Michael Dukakis, I didn’t like either one of them and I didn’t vote for either. I wrote in “John Madden and Pat Summerall” on the rationale that at least when THEY said something, I could make sense out of WHAT they said. Couldn’t say that for either Bush or Dukakis.

    I voted for Clinton twice. I voted for Al Gore. I voted for John Kerry. I also believe the Republicons stole both the 2000 and 2004 elections via election fraud — not voter fraud.

    JMHO!

    Proud Army Vet
    Vietnam Era
    Not a leftie, not a rightie,
    just down the middle.