If the United States Congress fails to raise the debt limit the American financial economy could be ruined. The American dollar could be ruined. The already weak recovery could turn sharply into a deep and catastrophic recession. Knowing these facts, Speaker John Boehner (R-Ohio) announced last week his latest plan to destroy the economy by not raising the debt limit on May 19, 2013.
Why is this the knee-jerk response of the leader of the Republican majority in Congress?
According to The Huffington Post, Speaker Boehner is going to force the White House and the Democrats to meet him dollar for dollar; only raising the debt ceiling in exchange for even more spending cuts. Here is the problem with playing chicken with the debt ceiling: everyone loses.
In July and August 2011, after Mr. Boehner reneged on his agreement with the White House on tax increases and unprecedented spending cuts – the so-called “grand bargain” – the United States came perilously close to defaulting on its outstanding federal debt obligations. A budget super committee was formed in the Senate and the warring sides agreed to the now-infamous Budget Control Act of 2011, which birthed the sequester and the debt ceiling showdown of two months ago.
The congressional committee was able to come to an 11th hour agreement on the budget, but we came so close to defaulting on our debt that the United States Treasury was downgraded from its sterling AAA rating to AA+. Treasury bonds remain among the safest financial securities in the world, but the rate at which we repay borrowers has gone up as a result of our most recent downgrade. The non-partisan Government Accountability Office (GAO) estimates that the financial downgrade has cost American taxpayers roughly $20 billion in higher interest payments on our outstanding debt.
Speaker Boehner’s political games have already cost the United States $20 billion. The last time he pushed the United States to the edge financial markets responded by punishing the American monetary system. Make no mistake; the Speaker of the House is solely to blame on that issue. President Obama offered enormous and sweeping cuts to solvent entitlement programs like Social Security in exchange for paltry tax increases on the ultra-wealthy and Mr. Boehner walked out on the agreement. An hour-long exposé by PBS Frontline entitled “Cliffhanger” explains in detail just went wrong in the 2011 negotiations.
We have already gone down this road before. The Speaker knows exactly what the outcome will be, and he still wants to drive full speed toward the cliff’s edge.
The last time Speaker Boehner tried to hold the American financial and monetary system hostage (January 2013) he lost the staring match with President Obama. Before that, when he first held the financial and monetary system hostage (July 2011), the Speaker won his cherished budget cuts in exchange for an unprecedented downgrade of American Treasury bonds. What does he expect to be the outcome of further debt ceiling drama in the Spring of 2013?
Americans have to make their voices heard in Washington and tell their elected officials to stop with the soap box ideology and get back to governing. If they continue to refuse to do their jobs, as Speaker Boehner has done time and time again, we need to get them out of office.
Speaker Boehner’s position in Congress in virtually guaranteed thanks to an gerrymandered district (OH-08) that avoids any hint of Democratic demographics. He treats the House of Representatives like a toy because his voters refuse to take a stand. Now is the time. Speaker Boehner has to get to work, or get out of the way.