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The Debt Ceiling: What is All The Hype About?

It seems that brinksmanship has become a staple of American politics. I don’t think that anyone can say that there is a semblance of stability within our government, on any level. For those of you who don’t know what is going on in American politics right now, Congress is trying to increase the debt ceiling of the United States. What this means is that we are going to run out of money on October 17th and if we don’t raise the debt ceiling. The United States will default on our loans because we are entirely incapable of paying back our debts.

The-Debt-Ceiling-Politics-Obama

To raise the debt ceiling or not? That is the question.

As I am writing this article, I have no idea if our government is going to raise the debt ceiling or not. The deadline is in 14 hours and it seems that most of the people in Congress do not understand what will happen if the United States defaults on its loans. This article can be read as what could have happened, what will happen, or what is happening. It all depends what our government decides to do within the next 14 hours. For the first time I am entirely not sure what this government is going to do. The Republicans seem dead set on making the president look bad and blaming the shutdown and possible default on his lack of compromise, and the democrats seem to think that instead of coming up with a solution the only recourse is to raise our spending limit a trillion dollars every year.

Because there is no recourse the only solution right now is to raise the debt ceiling. At this point there is no other solution that would be effective enough to prevent catastrophic problems from occurring. Teaching the government some fiscal responsibility, as the Republicans are proposing right now is fiscally irresponsible.

Here is what could happen, could’ve happened, or what is going to happen:

I am writing this at a time in which the government may or may not reach a deal. The worst case scenario our government would be faced with decisions like whether to stop paying members of the armed forces, put Social Security checks on hold, or delay funding schools or all three. This however, is not the worst of what will happen. The United States would be forced to stop interest payments on money owed to our foreign debt holders. Defaulting on those obligations would shake financial markets to a degree not seen since the Great Depression. Some people predict that the stock market could lose up to or more than half of its value within minutes of the market opening on October 17th.

As scary as this all might sound, there are a few reasons that everything will be ok. Even if we miss the deadline the impact on the average American won’t be immediate and The United States government won’t go bankrupt, no matter what you hear. There are constitutional guidelines built-in that will not allow the United States government to go bankrupt.

Ted Cruz debt ceiling

Ted Cruz

The number one risk to the U.S. economy is the loss of the full faith and credit of the United States government. Leaders on both sides of the aisle know this can be catastrophic in the worst way possible. While people on both sides might be acting like seventh graders at debate club right now the chances that they don’t reach a deal is very remote. However, that doesn’t mean the possibility of default is out of the realm of possibility. Especially with the “Tea Party” members of this congress, who are more interested in their own personal agendas, while seemingly having no concept of how our government and economic system works at all. I honestly think that the parties involved will come to some sort of agreement at the eleventh hour, much like they have done over the last 20 years.

Which brings me to my next point:

Since the 1940‘s the debt ceiling has been raised an average of more than once a year. In almost every case, negotiations went down to the last possible minute because neither side wants to flinch. When it comes that close to catastrophe, both sides can say they worked together to come to a solution.

Hype is a real problem. In this day and age everything seems so much more important and dire because we live in the world of the 24 hour news cycle and the internet. We also live in a world where the losses are unfathomable. Losses today don’t even remotely compare to the possible losses of the past. Let me be clear, not coming to deal can, and will be catastrophic. This just doesn’t seem to be a likely scenario.

Our economy and government can be perfectly compared to a house of cards. If you pull one away, or a slight breeze comes by, the whole thing can topple quite easily. The problem is, we continue to keep stacking more and more cards to the top. One day, maybe not today or tomorrow, the whole house of cards is going to come crashing down. 

Lets hope we don’t live to see that day! 🙂

-@sp1989

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About SalPezzino
Along with writing for ZazenLife.com, I also have my own personal blog called It Doesn't Take Common Sense to Know.... Check it out @ http://itdoesnttakecommonsensetoknow.blogspot.com/

One Response to The Debt Ceiling: What is All The Hype About?

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