by Andrew White | January 11, 2013 | Comments Off on The Myth of Government Debt
I read a very interesting article this morning in the print edition of the Wall Street Journal (January 11th, 2013), entitled The Myth of Government Debt. The article explored three topical issues of the time related to the US debt ceiling:
- Who or what body can raise the US debt ceiling
- What can or should be paid for with such an increase
- What happens if the debt ceiling is not increased
The article seems to have been written without any real political angle (but I assume I am somewhat biased in what I think is ‘neutral’) yet it hints that Republicans might be best served by preventing the increase in the debt ceiling. The reason is that cuts will have to be made that are more likely to positively impact the debt overhang the US faced far more effectively than messing around with tax increases on the wealthy.
The article takes a political swing: “If the Republican’s are serious about winning the debate, they must strive to convince the American people that such spending cuts are necessary, given President Obama’s openly articulated willingness to implement any meaningful spending cuts other than defense and his clear preference for limitless borrowing.”
The American people spoke – and they bought off on the idea of spending over a balanced budget. The US had its “Thatcher” moment and it chose a different path to Britain in 1979. What led Britain to understand its issues was the fact that the country went broke and had to go to the IMF and all that entailed in terms of loss of ability to forge a nations’ progress. Unless someone like Margaret Thatcher steps forth, the US does not seem to show any willingness to change.
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