Tuesday, May 31, 2011

Symbolic Debt Limit Vote Fails..

The debate over whether to raise the US debt and how it should be raised have been the main focus of discussion in Washington D.C. as of late and today that debate went to a new level..sort of.

Today a vote was held in the U.S. House of Representatives to raise the Debt Limit from its current level of $14.294 trillion to $16.7 trillion with no corresponding cuts. The vote, a GOP introduced bill mind you, got only 97 "yay" votes all of which were Democrats. The vote was clearly symbolic in nature, designed to put Democrats on the stop about the issue and to try and strengthen the GOP's resolve on the issue.

The debate lately has revolved not necessarily IF the debt ceiling should be raised, but HOW it should be raised. The GOP has not set out a firm figure of how much cuts they want in exchange for agreeing to raise the debt ceiling but it is a great enough number that various reports state the GOP and Democrats are "trillions apart".

Add to that the argument made by many Democrats and the President that raising the debt ceiling is more important than how it is done and such massive cuts being asked by the GOP are holding the nation's credit hostage. However most Democrats do seem to agree that cuts will need to be made, the issue is they don't see them as being that important.

But they are dead wrong. They attempts to shift the blame to the GOP and that they are holding the US economy hostage are rather predictable and pathetic. Now most economists I have read over the last few months do agree raising the debt ceiling is necessarily and not doing so could cause a financial panic. However raising the debt ceiling with no corresponding cuts could be equally damaging in the long run.

This lack of urgency about cuts from the Democrats is not very surprising to political wonks and everyday people alike. Many Democrats belong to the camp that believes that the way to fix an ailing economy is to pump more money into it, often citing FDR's efforts during the Great Depression. However as recent history has shown, throwing money at the problem is only making the problem worse, not so much because of the amount of money used by HOW the money is used. Many of the programs Democrats support have good intentions but how they are carried out leaves the everyday man scratching his head.

So considering the looming debt that rises everyday here in the U.S., it only makes sense that if the US government plans to increase the very limit of US debt (a rather humorous idea in the first place), then it should be willing to "trim its waistline" to at the very least slow the accumulation of debt.

Now how much should be made in cuts and where such cuts should be made is something I can't answer but if the Democrats, and the President, are truly interested in dealing with the US debt problem they will need to be pretty flexible with the GOP instead of wasting their time and OUR money accusing the GOP of holding the economy hostage..I know calls for bipartisanship are often met with cynical looks and eye rolls but that doesn't change that fact that some kind of compromise is necessary..God forbid our elected representatives behave as adults!

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