Ensuring that Paying the National Debt Remains a Priority
Posted by
Randy
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April 19, 2011
Continuing the discussion on the potential impacts of the rising federal debt on the U.S. credit rating: two weeks ago, Treasury Secretary Timothy Geithner recently said the U.S. will hit the limit on its borrowing capacity by May 16 and warned that it could start defaulting on some of its debts soon after that unless Congress acts to raise the debt ceiling. Yesterday, Sec. Geithner took a decidedly more optimistic tone, assuring the public that an agreement will be reached in time to prevent default.
Allowing the U.S. to default on its debts would jeopardize the full faith and credit of the U.S. government, causing the dollar to lose its status as the world’s reserve currency, and in turn causing a lower standard of living and higher interest rates for the American taxpayers. Whether or not the debt ceiling is raised, the federal government collects several times as much revenue as it needs to fulfill U.S. debt obligations. We can—and must—make paying the national debt a top priority. Failure to do so would pose unthinkable risks to the financial future of our country. That is why I have cosponsored the Full Faith and Credit Act. This bill will ensure that the U.S. government does not default on its debt by requiring the Treasury to prioritize payments on the public debt over any other payments, in the event the debt ceiling is not raised. The Full Faith and Credit Act will reassure creditors that the U.S. is serious about making significant spending cuts. By taking the option of default off the table, this bill will allow Congress to have a productive debate about how to rein in the government’s out-of-control spending. Weigh in: what are your thoughts on the debt ceiling and the Full Faith and Credit Act?
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