Raising the Ceiling on the National Debt

Consider a car racing down a highway at 150 miles per hour. Then consider that the highway leads to a river - quite a few miles away - and that the bridge over the river has collapsed. If nothing is done, the car will wind up in the river. The solution to this problem is relatively simple: slow down and stop before disaster occurs.

That analogy quite reasonably describes the United States government's twin deficit and debt problems. The rate of government spending is well over any sensible speed (the annual deficit is around ~ $1.5 trillion per year) and, as the national debt increases, the time approaches when lenders vanish and our car, as it were, sails into the river where we all drown.

The solution is for the driver of the car to take his foot off the accelerator, apply the brakes and stop before reaching the river. Admittedly this will take a bit of time and distance but both of these are still available - at least for a while. So too, for the government: stop out of control growth in spending (foot off accelerator) and start making serious cuts (apply the brakes). It will take a few years but, properly executed, the deficit and debt problems will be solved without major damage to the economy.

To claim that the problem of excessive government overspending can be solved by refusing to raise the debt ceiling is the equivalent of proposing that the best way to stop a speeding car is to run it into a tree. Undoubtedly that course of action will work but, as is too often the case, the side effects of the cure are likely to be worse than the disease.

Perhaps the ideologues - on both sides - will pick the sensible solution, before the bond markets over-react, but your correspondent does not believe that holding his breath will do anything other than make him blue in the face.