As Republicans toy with the idea of rejecting an increase in the debt ceiling there is, as always, more than enough people warning of “catastrophic consequences” for not raising the debt limit.
In a Fox News story on Monday, Chris Stirewalt writes, “If Republicans are serious about brushing off Obama’s demand to add to the current $14.3 trillion limit, which was bumped up by $1.9 trillion less than a year ago, it will not reassure Hu and the Chinese lenders that American debt is a safe haven anymore.”
Let me make sure I’ve got this straight. By raising the amount of debt, refusing to make the hard choices and kicking the can a little further down the road, somehow this is supposed to make the Chinese feel better about loaning us MORE money. I’m not a banker, but that doesn’t make any sense at all to me.
If I were Hu Jintao, who has already said he is not sure about America’s ability to meet it’s existing debt obligations, I might actually be relieved to see Congress take the bull by the horns and address the issue. Refusing to raise the debt limit, and perhaps even shutting down the government for a while, will send a message that we’re serious about getting our fiscal house in order.
We have ignored the problem for far too long. The Chinese must believe that as well. Hu Jintao recently told the Wall Street Journal “The current international currency system is the product of the past”. For those who may not be aware, he’s talking about the U.S. Dollar.
Speaking of Jintao, does anyone besides myself think that his visit here this week is a bit like the future landlord coming to inspect his new acquisition?
