The damage of playing this most dangerous game with the US debt ceiling may have already begun and most of us can only watch. The enormity of the consequences is so large that we are unable to turn away. The disinformation is so blatant we doubt our common sense and the facts.
The US Senate says it will not pass the Republican House proposal to avert the debt ceiling crisis and vice versa. However, both plans were reworked since both fell short of their stated savings. Neither provide a reduction in the debt, they would only slow the rate of increase. The House measure would have another debt ceiling crisis during the US ‘ Christmas shopping season this winter.
Neither plan proposed any new revenue (taxes). For shame.
There is no better evidence that the deficit and debt now significantly influence the actions of the US than the House scheduling its vote on the Republican plan after the US stock market closes on Thursday and the Senate scheduling its vote on the weekend.
I noted on July 12 that many of the parties to this game of bluff and brinkmanship are speaking of cuts to Social Security. As readers of this blog know, Social Security is fully funded through about 2038 and at the 75% level after that. With the small changes proposed in my essay on July 12, Social Security would be funded into the next century. Why does this keep coming up? Is the point to ratchet up the angst of moms and dads and grandparents, ensuring their quality of life is just a little more difficult? Or, is the intent to publicize a planned reduction or repudiation of the money the US Treasury borrowed from the Social Security Trust Fund (over $2 Trillion)? Or, does the elected leadership just not understand that Social Security is financially stable?
Why the call for another bipartisan commission to study the deficit and debt? Why doesn’t the US leadership read and debate the one that was delivered on December 1, 2010? You can see the full report in .pdf at Moment of Truth. (click on news, then Moment of Truth Under December 1, 2010.) I do not advocate for all of the proposals in the report, but chartering another commission seven months after the last one was delivered and shelved, is one of the reasons the US got so far into debt.
Please ask yourself, what legislation could have been passed, proposed, discussed, or implemented over the last six months of the debt ceiling crisis? (Maybe resolving the FAA funding issue that resulted in 90,000 construction layoffs and loss to the FAA trust fund of 30 million dollars a day). The scorecard says no forward progress, only hardened positions, diminution of the US credit rating, and several lost weekends for the congress.