Isabel Sawhill, (photo) senior fellow at The Brookings Institution, wrote on Tuesday that “the fiscal cliff … is not the most worrisome economic issue facing the country. The real cliff is the debt ceiling, and if we go off that cliff, it will be catastrophic.”
At $16.4 trillion, the current debt ceiling is likely to be hit before the end of the year, but with “extraordinary measures,” the Treasury can put off the day when it will no longer be able to pay the government’s bills until the end of February. That will give the Congress plenty of time to consider getting rid of the regular debt ceiling charade altogether.
Those who believe that a refusal to raise the debt ceiling will somehow put limits on spending and shrink the size of government are confusing the need to pay obligations already incurred by Congress with the need to rein in future expenses. Spending restraint is needed and along with new revenues is the right way to fix rising levels of debt. The debt ceiling itself is an anachronism.
This is precisely the point made from the other side of the political spectrum. Peter Schiff, author of numerous books about the current economic crisis and the head of a precious metals company, recommended doing away with the debt ceiling “drama” altogether by giving in to the suggestion that the president be given the power to raise the debt ceiling whenever it is necessary. Wrote Schiff:
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