Sunday, January 16, 2011

71% of Americans Oppose Raising Debt Limit

As the purely symbolic fight looms in Congress over whether or not to raise the debt limit (is that even a question?), the American public are dead set against raising, according to Reuters' poll:

The U.S. public overwhelmingly opposes raising the country's debt limit even though failure to do so could hurt America's international standing and push up borrowing costs, according to a Reuters/Ipsos poll released on Wednesday.

Some 71 percent of those surveyed oppose increasing the borrowing authority, the focus of a brewing political battle over federal spending. Only 18 percent support an increase.

The poll underscores the tough task ahead for U.S. lawmakers as the debt nears its current ceiling of $14.3 trillion. Treasury Secretary Timothy Geithner last week warned that a failure to raise the borrowing limit in the coming months could lead to "catastrophic economic consequences."

Brian Riedl, the lead budget analyst at the conservative Heritage Foundation, said the poll findings put "a lot more pressure on those who want to raise the debt limit to make a convincing argument to a very skeptical public."

I don't think they have any clear idea as to what would happen if the debt limit weren't raised, and that's precisely why Congress is in trouble.

So what could be a convincing argument by Congress to sell the debt limit raise to the skeptical public?

International standing? I don't think Americans care too much about that one at this point. Europe is in shambles, China is in a gigantic credit bubble, Japan's been dead for most of the past 20 years.

Social Security and Medicare benefits would be cut otherwise? Good luck with that line, as people simply do not buy that. They've been paying into these ponzi schemes without knowing they've been the ponzi, so they want their money's worth. It's not their problem that the government diverted the funds.

The federal government is going to have another $1.5 trillion deficit year. If the debt limit is reached and is not raised, the government cannot borrow additional funds to pay for stuff.
What stuff, you ask? Let's go find $1.5 trillion from the feds spending (2009):

Defense: $782 billion

Other discretionary (all the other departments and agencies in the executive branch): $437 billion

TARP: $151 billion

Interest: $187 billion

Total: $1.557 trillion

So if we stop the wars and pull out from around the world, abolish all the federal government departments and agencies in the executive branch including the White House and send Congress packing (unless they want to work as a volunteer), and tell the creditors (the largest being the Federal Reserve) that we're not going to pay them the interest, we instantly have a balanced budget.

It is a liberating thought, isn't it?


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