Lew Warns that Debt Ceiling Must be Raised

There has been little if any understanding of the meaning of ceiling in Congress over the passed eight years.  When it comes to debt and the wholesale borrowing by our government over the past thirty years, the set debt limit has proven to be little more than a set spending challenge.  It is as if someone was challenging Congress and the President to beat the number.  And no matter who is running things, they consistently have and then surpassed that number.

Now, in the face of another deadline to raise the limit, the Treasury Secretary Jack Lew has voice concern.  He thinks that the Congress is playing games and using the debt ceiling as leverage.

Reuters reports

U.S. Treasury Secretary Jack Lew said on Wednesday he is worried that brinkmanship in Congress on raising the nation’s debt limit could cause an “accident” as the United States edges closer toward default.

One wonders why it is not for cuts that the Secretary was calling for rather than an increase in spending, I mean borrowing.  If we are in such dire need, why are we continuing to shovel out money?  Why are we giving so much in foreign aid?  Why are we still providing for those able but unwilling to work?  The answer is simple, we all are quick to spend money that is not ours.

But what Lew tells Congress is that there is a risk of an “Accident.”

Reuters continues

“What I am most worried about … is an accident, and accidents can happen when you play this last-minute brinkmanship game,” Lew said.

“The deadline is very real,” he added.

The Treasury Secretary is worried that the conservative Congressmen are playing political games with the debt ceiling.  That they will play too close to the edge and cause the U.S. to default on its loan payment.  But have you ever wondered what our debt ceiling and our loan payment have to do with each other?  Simply put, we have budgeted more than we can pay out of tax revenue, so we need new loans to pay for the projects we have to spend out on, and we have loans from years past to pay back.

So, rather than the Congress foreseeing this shortfall, they have counted on this ceiling being raised.  That’s right, they knew they were going to raise the ceiling when they wrote out the budget.  They knew that they were going to be up against this hard date.  But rather than be fiscally responsible, they counted on just borrowing more.

Reuters reports

On Tuesday, Republican leaders in the House of Representatives mulled proposing a bill to increase the debt limit that would also impose strict new controls on federal spending that Democrats have long opposed.

Republican House Speaker John Boehner is due to retire from Congress on Oct. 30, further complicating negotiations.

Lew has repeatedly warned of the economic calamity that could result from the United States missing payments.

The Treasury faced that problem in 2011 and 2013 when Congress delayed increasing the borrowing limit.

The ceiling will be raised.  Lew can call this Brinksmanship because it is all a show.  Just different actors.