Us parents who have had teenagers all too well know that sound. The kid want's more money, but most often they don't want to do anything extra for it. And on the occasion that we do increase the allowance, do you think the kid puts part of it away? No, they will spend it.
Cue the folks in congress: The latest proposal is to raise the debt ceiling by $2.4 trillion dollars over two years. Is that just in case of an emergency like a credit card that we keep for just that purpose? No, they plan on spending the whole damn thing! Our federal deficit is expected to hit $1.5 trillion this year. Out total debt is over $14 trillion. This will amount to a 17% increase!
After that, will we try to lower the deficit? No, the debt ceiling has been raised 74 times since 1962, and each time the debt ceiling has been hit. As long as we keep increasing it, the debt will get higher. It's time to cut up the credit card. the only way to force congress to stop spending increases is to hold firm on the debt ceiling.
According to a NPR article, New York Professor James Ramsey is quoted as saying: "[As Samuel] Johnson said about hanging, it concentrates the mind wonderfully," Ramsey says. "I would say if we were in a position of not being able to pay our debts in the short term, it would concentrate the politicians' minds dramatically."
In February 2010, Rep Cantor (R-VA) said this about efforts to raise the debt to $14 trillion: “It is a travesty,” said Cantor. “The writing is on the wall. Congress needs to wake up and realize that the future of American prosperity is in dire straits, mortal danger..."
Would it be the right thing to do right now? My thoughts are that not raising it would cause the economy to slow down, so we should raise it by maybe only by 2-3%, but federal spending (in 2012, not ten years down the road) should be cut more than the increase (let's start with 10%). Start cutting spending now so we don't have to raise it again.