Raising debt ceiling only option left to prevent chaos
The Thursday deadline is just one day away, and the decision to raise the debt ceiling still ominously awaits a verdict.
While the decision to raise the debt ceiling may not be ideal, it has become the only option to save the economy and avoid putting the country back into recession.
Being just a few days away from the deadline that will put the country at its borrowing limit leaves an intense fear of what will happen if the debt ceiling isn’t raised.
Because it has never happened before, according to the Council of Foreign Relations, the possible consequences are numerous and detrimental.
The worst consequence would likely be the government’s failure to make interest payments due to unstable bond markets, resulting in a default.
If the government defaults, the nation’s credit rating would be severely damaged and extremely expensive for anyone in America borrowing money. That’s not to mention the global economic market crisis that would result from a default.
The consequences of a default should bring fear to young adults looking to start their own investments because it can have the greatest impact on them. Paying for college with a student loan or buying a house would have a major Republican default tax, President Barack Obama said in his weekly address on Monday.
Obama said he does not think it would be wise to “kick the debt-ceiling can down the road for a couple months,” sending the government into an intentional default in the middle of the holiday season. A time of year that is known as the happiest could easily become very painful for many families and business owners, especially those with furloughed employees lacking paychecks.
On Monday, Senate majority leader Harry Reid said his most recent plan was making tremendous progress – but Huffington Post reports it was immediately shot down yesterday. The fact the nation is just a day away from deadline and decisions have yet to be agreed upon should really make citizens question the effectiveness of the government.
Reid’s plan would raise the debt ceiling enough to afford the U.S. borrowing needs only until February 2014. It did not resolve disagreement over long-term spending and health care that caused the shutdown, according to ABC News.
Essentially, the plan was a quick fix to reopen the government, but if resolutions weren’t reached by February the nation would have ended up in the same position, if not a worse one.
But now the nation is caught in a worse position, because the best glimpse at a solution is no longer an option.
Unfortunately raising the debt ceiling comes down to being the lesser of two evils, because at this point the only other option would be to default.
Raising the ceiling will at least end the government shutdown and send people back to work. The abandonment of Congress’ staunch dogma and lack of cooperation would do the American people good at this time.