Honestly, there has been way too much posturing. When has compromise been a dirty word??? I'm shocked they let it drag on for so long. The debt limit should have been raised without batting an eyelash. Heck, it's been raised for over a hundred times... why not now? Sure, the US debt is frightening, but is it really more frightening than a double-dip recession? Seriously.... When you have a massive forest fire in the front yard, that blaze in the kitchen shouldn't be all that you are worried about right now. If they actually let the debt limit stick, it's pretty much anyone's guess what will happen next. No one really knows because it has never happened before. It also depends on how the US government decides to prioritize their payments. Then it depends on who gets stuck with the IOU. No matter what though, if default happens - it's not going to be pretty, and the Republicans will pay more for it than the Democrats will, especially the Tea Party freshmen who truly think that compromise is a dirty word....
House Swiftly Rejects Reid Plan to Raise Debt Ceiling: Rep. Tim Murphy | The State Column FX rates 1USD = 1.20SGD/2.96MYR :'(
Well, if the Republicans are suicidal, they will actually let the US government default. But I suspect Obama has an ace up his sleeve. He may unilaterally call for the debt ceiling to be raised, no matter what Congress may say, using the 14th Amendment. This is a good read on his options - 3 ways Obama could bypass Congress - CNN.com Therefore, I think that for all their posturing, the Republicans will eventually come to their senses and make a deal. The Democrats will also have to suck it up and take a hit. That's what compromise is all about. You may not like it, but you have to live with it. That said, I agree with Fareed Zakaria that the damage to America's credibility has been done, even if they raise the debt ceiling on time. I don't know how the Americans really see it, but it's rather incredulous to me that they would let it drag on for so long. You can read his opinion piece here - Fareed's Take: The damage is already done! – Global Public Square - CNN.com Blogs This part nicely summarizes the ridiculousness of the debt ceiling :
I don't think it will happen. It's just a drama show/pissing match at the same time. Something the news media fails to point out is, how many times has the debt ceiling been raised in the past (it was raised 8 times or so during the previous president's tenure). Also, yes the debt is high. But with it, so is the US GDP too. There's a saying, if the US spits, small countries will drown. This was especially true a year and a half or so ago when the US stock market was in a pinch, but smaller markets were bruised and battered. So don't worry, we're not going anywhere.
I agree. It was mostly a show. Whoever dared to let the debt ceiling remained in place would have been clobbered. Whenever people ask me about the debt ceiling, I would tell them not to worry. They can pout and prance all they want but they will have to raise it. Not raising it is just not an option. As Fareed Zakaria pointed out, it's not even good conservatism! I mean, if you are a conservative, you should agree to pay off the debt and then work on it. You cannot just say, "Okay, I don't think I want to pay for all that stuff I bought earlier". That's just not right. Of course, they are right in that the US has to fix the enormous deficit. I don't know but I think that the high jobless rate is a bigger problem than the deficit right now. I know that the deficit isn't good, but at this moment, the jobless rate is a far bigger problem. If they can fix the jobs market and bring back consumer confidence, the economy will improve and that will indirectly help fix the deficit through higher tax collections. If they cut spending but the jobs market tanks, it will a deadly spiral downwards because there will be less tax to collect every year.
