Fact check on debt ceiling
12th July 2011 · 0 Comments
By Dr. E. Faye Williams, Esq.
The first time a debt ceiling was raised was in 1940 when Franklin Roosevelt was President. During that time and until now, the federal debt limit has increased over fifty times, and it was done most of the time previously without much fanfare. The first increase during that time came on June 25, 1940.
The United States soon entered World War II, and the federal debt limit quickly skyrocketed after the first increase. On April 3, 1945, Congress approved a new federal debt limit of $300 billion dollars, a marked increase from just a few years earlier. This was due to the large expenses involved in the war. We have a similar situation today with two wars in Iraq and Afghanistan. During war, increases are normal and expected.
A “debt ceiling” is the maximum amount of debt that a government can take on. In order to spend beyond this ceiling, Congress must agree to raise it. The purpose of the debt ceiling is to try to limit too much spending. Of course, when you look at where the debt is today, it’s easy to see that the desired effect has not been accomplished. The debt skyrocketed in the Administration prior to President Barack Obama being elected. The United States now has a debt ceiling of more than $12 trillion, but we need to raise the ceiling.
It seems that the Democrats are saying we cannot balance the budget on the backs of those who have the least. The Republicans are saying we must continue to give tax breaks to those who can most afford to pay taxes.
Recently the Legislature in Texas suggested cutting $4 billion from its education budget. Meanwhile, the University of Texas’ annual football budget is $100 million annually! That budget is untouchable. We have money, but it seems that our problem is prioritizing how to spend the money. When we don’t pay our bills, our credit report is bad — making it difficult for us to borrow for necessities. When our country doesn’t pay its bills, the same thing happens, but on a much larger scale.
President Obama has said that the consequences of the U.S. defaulting on our debt if Congress does not raise the debt ceiling will be both significant and unpredictable. In order to avoid what would likely be severe consequences, the ceiling must be raised by August 2, of this year or the options about which we know are said to run out. It’s being called a “hard deadline.”
The President went on to say, “We don’t know how capital markets will react if that deadline passes without an agreement to raise the $14.3 trillion limit.” That’s what is being debated. It is pretty certain the consequences for the U.S. economy will be significant and despite all the efforts to improve our economy, we will lose ground.
I believe this hullabaloo over raising the debt ceiling is just another special Republican ploy to distract the people from knowing how their tax dollars are really spent, and to prevent President Obama from carrying on the business of the nation. Rush Limbaugh said at the beginning of this President’s term, he wants him to fail. Apparently, the same is true for many Republicans whose leaders have walked out of negotiations where attempts were being made to find common ground.
Trying another prank will not be successful. It is in all of our best interest to resolve the matter, so why all the stalling? We should have no fear because raising the debt ceiling will go through.
(Dr. E. Faye Williams, Esq. is National Chair of the National Congress of Black Women. She’s also Chair of the Board of the Black Leadership Forum in Washington, DC. To reach her, call (202) 678-6788; e-mail firstname.lastname@example.org or see website at www.nationalcongressbw.org).
This article originally published in the July 11, 2011 print edition of The Louisiana Weekly newspaper.