In the debate over raising the debt ceiling, there are two crowds. There are those who think not lifting the legal limit on borrowing is no big deal. And there are those who argue that not doing so would destroy the full faith and credit of the United States and plunge world markets into chaos. I’m firmly in the latter camp. That’s why I consider today’s column by Stephen B. Meister in the New York Post to be one of the most irresponsible pieces on the issues.
Meister sets up six “Myths” and tries to dispel them with “Truth.” Problem is much of his “truth” isn’t grounded in reality. He believes that America won’t default because Treasury can use its monthly receipts to cover bills, bond payments and interest. He believes that the government would just “delay paying some bills, or even furlough some nonessential federal employees.” He believes the Aug. 2 drop-dead default deadline is about as hard as a marshmallow. He thinks the markets fear U.S. debt and the debt limit going up. He thinks the threat to seniors is one easily avoided. And he doesn’t think taxing the rich should be on the table in future debt-deficit fights.
Don’t fall for this, folks. What Meister espouses is assured destruction. In a case of perfect timing, The Post editorial today goes after “No Big Dealers” like Meister, calling that line of argument “dangerous.”
And may I remind you — yet, again — that Treasury Secretary Tim Geithner spelled out the hell that would be unleashed on the American people in a letter to Congress on Jan. 6. A Congressional Research Service report from April warned that if the debt ceiling were not raised, the federal government would have to eliminate ALL discretionary spending, cut mandatory spending by 70 percent, increase taxes by two-thirds or some combination of the three approaches.
Yes, getting spending, debt and deficits under control is a must. There’s no getting around anymore. Kicking the can down the road is not an option. Tackling this menace must be done wisely. As The Post editorial argues, “[T]here is a thin line between employing the debt ceiling as an opportunity and heedless games of brinkmanship. No one should wish to gamble on an American default.”