Politicians of both parties are playing with fire when it comes to their game of chicken regarding the debt ceiling. Each party has valid points, and each shares some of the blame. Democrats are correct that the debt ceiling and budget are two separate items. The debt ceiling deals with paying back existing debts. The 2024 budget deals with spending for the next fiscal year. The Republicans are correct that, for too long, the budget deficit has been ignored by both parties and currently stands at nightmarish fiscal proportions. Neither party has taken the budget deficit seriously. Republicans pass cut taxes without reducing spending, and Democrats pass large spending bills that rely on budget gimmickry to claim they are fully funded.
Falling into the financial abyss of default would be catastrophic. First, most Americans today rely on their 401(k) savings for their retirement. Many funds offered in these plans are tied to either the stock or bond markets. A debt default would tank both markets. Second, government interest rates would rise significantly, exacerbating the deficit. Would you lend money, at low interest rates, to someone who just defaulted? Finally, China will benefit most from this financial chaos. Chinese leadership will hold this up as a failure of our capitalist system and suggest that world switch to a more socialist-based economic system.
Our elected officials need to stop acting like a group of teenagers playing chicken and, before they drive America’s car off the fiscal cliff, start negotiating like adults.
Sam Rosenthal
Portland
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