Thursday, July 21, 2011

United States Countdown on Defaulting

The August 2nd deadline slowly approaches as the date in which the US will default on it's debt, if nothing is done about raising the debt ceiling.
    As a moderate liberal, I always try to give the opposing side which is the conservative base the benefit of the doubt. But when I hear that many conservatives don't want to raise the debt ceiling no matter what deal is agreed on, it makes me lose hope in this view. A default on our debt will effectively make us lose our grade A rating as a borrower, and we'll see higher interests on the same debt. Additionally, government will be shut down for at least a few days, and as Obama has warned, there's a chance that social security checks won't be sent out. This isn't even the worst of it- stock market prices will plummet and send shockwaves throughout the financial world. Ben Bernanke, Treasury secretary described the possible event as potentially 'catasrophic'. This will have a devastating impact on the economy, and some far right Republicans are in denial of this, accusing the president of "fear mongering" in order to get a deal passed. I believe Obama has been a true bipartisan in this deal brokering, offering spending cuts to social security and MediCare- the core of the Democratic Party- in exchange for revenue increases. The Republican side hasn't budged, mainly because many freshmen representatives in the House have been elected as Tea Party candidates- and have vowed in their campaigns to not raise taxes.
     This is a disaster waiting to happen. The Senates' "Gang of Six" bipartisan effort has promise, but will surely fail in the House. If there is no deal by August 1st, I have faith that an emergency effort will be based on this plan.