" I Want a Raise Damn It"

Here we go again, playing chicken with the national economy. We have until August 2nd (10 days 6 hours) to raise the debt ceiling past 14+ trillion dollars. In theory, if the Congress does not agree to do this, America will default on loans and in particular international loans. It's money we have already spent. Think of it this way, we wrote a check that is about to bounce unless we fund the account. Even if you are only holding a few U.S. Savings Bonds or have a little money in the stockmarket you are in danger of the value of your holdings going down.

Some people skoff at the talk of how serious the situation is. Partly because America has never underfunded (not paid the check) before. Some ask, what would actually happen? Their thinking is that the U.S. is still a world power and a major player in the world economy. On the other hand, others claim America would be seen as a questionable financial risk. It's much like when your cousin Willie borrowed money from you, left you with an IOU but now says he doesn't have the money. How reluctent are you going to be to loan Willie more money?

If the debt ceiling isn't raised I don't believe the U.S. will come to an end. International markets will not serve a forclosure notice on us. Starbucks will still sell bitter coffee for inflated prices and China will still ship crap to every Walmart in America. Still, to default would likely see some potentially serious repercussions. Even my little 401K plan which is invested in stocks and bonds could sink faster than Sylvester Stallone's mother's new face. The already volatile stock market could easily drop 250 points (or more) in a day which would represent 20% or more of the total value of the market. It's happened before. I can see people panicking again and selling off their now much more worth(less) stocks and bonds and create an even bigger crisis in the stability of our overall econonomy. Our history is that when things go south, they go south in a hurry. People that are still reeling from the current recession (most people) would likely hunker down even more, stop spending even more and our already immoveable recession could easily become a double dip recession or hell a depression. You say pOtato, I say potAto.
So why not just raise the debt ceiling and then roll up our sleeves and get to work fixing our horrible debt level??
Two reasons:
1. To keep raising the national debt ceiling is akin to you saying, "well, I know I am in major debt but since I already wrote the checks on these new purchases, I'll just get more cash out of my credit card and put it into my checking account. Then, next year, I'll work on my debt problem. How many times can you do this before there isn't a next year?
2. Republicans won't agree to a raising of the debt ceiling unless the democrats agree to major spending cuts. Democrats loath spending cuts because it hurts those people in need and those (not in need) but who have figured out ways to cash in on entitlements too. The needy + the damn opportunists tend to vote democratic. (See if you can figure out why)?
Democrats don't want to raise the debt ceiling unless the wealthiest Americans are taxed at a higher rate (actually the rate they were being taxed before Bush reduced their taxes near the end of his second term). Republicans get campaign money from rich Americans (most are Republicans) and are loath to ask these people to pay more taxes. (See if you can figure out why)? So it's a stalemate.

As we move closer to the drop dead date of August 2nd, which side will blink first? You know what you hardly ever, ever see in a game of "chicken"? You hardly ever see both sides so stubborn they would rather self destruct than give in. I hope that's the case here because if the two major political parties decide to crash headlong into each other, there will be collateral damage.