Government Default is not the End of the World
Written By: Sheldon Richman | Posted: Monday, July 25th, 2011
What's the point of a debt ceiling if raising it is a mere formality?
As the U.S. government neared its $14.29 trillion debt limit, the congressional vote to raise it was expected to be uncontroversial. That's pretty much how it's been in the past. In the first decade of this century, the limit was raised a half-dozen times. But this time it's different. The public is worried about the inconceivably large budget deficits and a total national debt that approaches 100 percent of GDP. Politicians, opportunistically and otherwise, decided to cash in - pun intended - on the public's concern: There would be no raising the debt limit without a deficit-reduction plan.
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