Raise the Debt Ceiling?
I was watching Ben Bernanke testify before the Senate today. One of the Senators asked his views on raising the debt ceiling, and the possibility of a shutdown of the government. Bernanke said not raising the debt ceiling would be like a family fixing its finances by just refusing to pay its bills. A better, and more honorable, approach would be to meet your commitments and cut up the credit cards and vow to spend no more. Bernanke said that the current debt is for things we’ve already committed to: contractors are owed money, citizens are counting on receiving social security checks… And markets would go into complete turmoil if the US government announced it was no longer paying interest on its debt – and regular people would suffer incredible losses in 401Ks and retirement accounts just when they are starting to look a little better. THINK! Principles are important, but don’t ruin our lives just to make a point. Get the job done the right way – figure out a way to stop spending so much money. But don’t renege on commitments already made – that’s not honorable.