One sign of just how big the deficit is the fact that we are just about at the debt ceiling of $14.3 trillion. This has become a matter of considerable controversy.
Certain conservatives contend that the cap should not be raised. The reason given is sensible enough: raising the cap enables us to keep on borrowing rather than actually seriously addressing the matter of debt. While there are some important differences, this situation can be seen as being somewhat like dealing with credit card overspending by raising the credit limit rather than spending less and doing more to pay down the debt.
However, there is a real risk is not raising the ceiling. If the ceiling is left in place and the government cannot borrow more to fund its obligations, then this could lead to serious problems. For example, the United States might be forced to default on loans. If leaving the cap in place will do serious damage to the country, then it should be lifted.
On the one hand, I can see the need to lift the cap. To use an analogy, when I was going through my divorce (my own personal recession), I had to take out loans and go into debt to pay off the settlement. If I had stuck with a “debt ceiling”, then I would have been worse off in the long run (I would have, for example, lost my house). Perhaps the situation we are in now as a country is comparable and we need to go into debt now to avoid something even worse.
On the other hand, I do think that the critics of raising the ceiling do have some good points. Going back to my divorce analogy, while going into debt was a cruel necessity, I followed it up with financial austerity by cutting my spending and focusing on debt reduction. This has involved giving up things and doing without certain things, but that is what must be done to deal with debts. It is, of course, tempting to simply keep living as if the ceiling can always be raised as needed. However, that is a path to ruin.
As I see it, it makes sense to lift the debt ceiling provided that doing so is, in fact necessary to buy more time. Of course, this time should be used wisely to reign in spending. There is, however, the risk that comes with raising any credit limit-the great temptation to spend up to and then beyond that limit.