Moody’s: U.S. should completely eliminate the debt limit
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For weeks the Democrats and the Republicans have been fighting over the debt limit, the maximum amount designated by congress that the U.S. can borrow. The president has offered everything but the White House kitchen sink if the Republicans would just raise taxes on millionaires, which of course they will never do, in exchange for their vote to raise the debt ceiling. Now, like any proper credit reporting agency, Moody’s has decided that even if America agrees to raise the ceiling they may still lower our credit rating because there’s every likelihood that the next time it comes up the same nonsense will go on. That makes us a bad risk.
Here’s the summary:
With the debt ceiling hanging over Washington like the Sword of Damocles, Moody’s offered a novel suggestion today: Why not just scrap the thing entirely? “We would reduce our assessment of event risk if the government changed its framework for managing government debt,” to prevent future showdowns over the debt limit, Moody’s analyst Steven Hess said in a new report, according to Politico.
Hess suggests the US adopt a system more like Chile’s, where “the level of deficits is constrained by a ‘fiscal rule,'” so that “debt is constrained though not technically limited.” The credit agency last week said it was considering lowering America’s credit rating even if Congress raised the debt limit, in part because the flap has raised the possibility that the US might not raise its debt limit in the future.
What do you think? Should we do away with the debt limit entirely?
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The TeaBags will be the undoing of the Grand Old Party.
…let’s cheer them on…
Speaking of the debt ceiling, why are there no in the 2012 Pentagon budget–$670.6 billion? 1% would garner $6.7 billion; 10% would provide $67 billion. Those budget could go a long way to ameliorate the federal deficit. A comment from The Hill:
Defense spending fuels the debt crisis
Since the start of the 112th Congress, the U.S. House Republican majority –with its dozens of new Tea Party members – has been telling the American people our country is “broke.” During the budget debate, Tea Party Republicans argued the unprecedented fiscal crisis demands huge spending cuts to vital programs and investments that make our communities strong. Then, starting with H.R. 1, House Tea Party Republicans voted overwhelmingly for massive cuts to food safety, public safety, education, life-saving health research, roads and bridges, clean energy alternatives, and nutrition for hungry children and nursing mothers.
Cut $650 million from emergency nutrition assistance for hungry infants and mothers? Tea Party Republicans said yes. Cut $35 million from food safety and food inspectors that keep families healthy and safe? Tea Party Republicans said yes. Cut $1.3 billion from community health centers for the poor? Tea Party Republicans said yes.
But when the $649 billion Pentagon funding bill for Fiscal Year 2012 reached the House floor, Tea Party Republicans’ dire fiscal warnings and collective eagerness to cut government spending disappeared. Instead, they turned on the spending spigot to full blast.
Rep. Betty McCollum (D-Minn.) – 07.18.11
Sounds like a plan.