It is not the debt ceiling that needs attention so much as it is our debt service costs. Here is the story

Here is a chart revealing spending under both parties. In the end, both are responsible for the current debt totals. Note that 2008 and 2009 (although brown in color) belong to the Bush era but are colored "Democrat Brown" because these are debt years of the Democrat Congress the last two years of Bush. Understand that all spending originates in the House of Representatives. None of it originates with the president, whoever he/she might be. None.


As you may know, there is a huge fight pending in Congress over the debt ceiling. It is currently set at 14.2 trillion. We will be at the level, per design of the 111th Democrat Congress, within the next 8 weeks. We hit 14 trillion two days ago.

There is talk of refusing to increase this limit on spending without attaching significant spending cuts. After all, that was an important part of the message sent to Congress 9 weeks ago. The Dems are screaming. Their claim is that the Republicans are "playing chicken" with the financial well being of the United States.

Lots of talk from the Big Spenders on the Left of a pending "catastrophe" .

What is being missed in all this talk of debt ceilings and catastrophes is the fact that Moody's and the folks at the S & P are telling us that the actual villain to be feared is a thing called "debt service cost." It is currently costing us a little over 9% of our GDP to pay the fees and interest on our debt. When that number gets to 12% (nominally), services such as Moody's will lower our nation's credit rating and suddenly, bonds that are being sold at 4% interest will be increased to 7-9 percent on a 10 year note. That becomes a part of the structural debt for the Administration of the future just as the short term bond sales of the Clinton Administrations have effected deficit totals in the Bush and Obama Administrations.

When it is all said and done, continued spending as reflected in debt ceiling increases will be the cause for true financial catastrophe. Most economists say we have two years remaining before our debt service costs rise to 12% of GDP.
Point of post: to continue to ignore spending cuts as we glibly raise the debt ceiling will be the very cause for national financial collapse.
One additional point: while the Dems are screaming about voting against raising the debt ceiling, this is exactly what Senate Democrats did in 2006 -- as a collective, Senate Democrats voted against raising the debt ceiling . . . . . . Obama included. Yes, he voted against raising the debt ceiling in 2006. 2007 and 2008 ?? Oh, he skipped these votes; too busy running for president.

End notes:
1. A congressional article outlining the danger of continued debt.
http://culberson.house.gov/our-biggest-national-security-threat/

2. Question: did those black birds die because they hit the debt ceiling, as some are reporting?

3. I have spent considerable time trying to figure out what exactly would happen in the event that, at some point, the Treasury literally had no cash to pay interest on the debt, redeem maturing securities, pay Social Security benefits and so on. Some people believe that the Treasury has an almost unlimited ability to fudge the problem indefinitely. But I know that there are analysts at the GAO who are very concerned about hitting a hard limit on the Treasury’s legal authority not long after the debt ceiling is breached. The law is very unclear and has never been tested in court. . . . this and more can be read here.

4. Another excellent article on this issue is one found at the Financial Times: US's triple-A rating under threat.