by Bruce Josten
U.S. Chamber of Commerce
We have been telling you for weeks and months that defaulting on our debt is not an option – it has real, immediate, and potentially catastrophic consequences. As Tom Donohue and Rob Nichols outlined in their joint USA Today op-ed just last week, failure to raise the debt ceiling would have calamitous results. It would halt government operations, make our debt and deficit situation worse, debase the value of the dollar and threaten its status as the world’s reserve currency, and hamper U.S. growth and job creation.
And we are going to remind you again. If Congress fails to raise the debt ceiling, there will be real impacts, for every American. Interest rates will rise for everyone – which means higher rates for American consumers and the small businesses who drive our economy. Car loans, mortgages, and business and student loans will all be more expensive.
Now, make no mistake; too much spending and the need for real entitlement reform has led to the debt crisis we’re in today. But jeopardizing our country’s credit rating and fiscal security by refusing to compromise isn’t the answer.
The result from political inaction could be devastating. Congress needs to increase the debt limit but, the debt ceiling is just the symptom; the real problem is the explosion of federal debt.
According to new figures released by the Congressional Budget Office (CBO), debt is forecasted to rise to 190 % of GDP by 2035. CBO’s annual long-term budget outlook forecasts a surge in public debt this year that will rise to 70% of GDP by the end of fiscal year 2011 compared to 62 % by the end of 2010. Beyond the 10 year budget window, the situation deteriorates even faster.
We need to stop this downward spiral and get America back on the right track. Click here to contact Congress now and tell them to act immediately to raise the debt ceiling and enact serious spending reforms to fix our debt crisis.
The White House and Congress face a looming August 2 deadline to resolve their differences and raise the $14.3 trillion debt ceiling. The need to raise the debt ceiling provides leverage for meaningful, long-term, bipartisan action to rein in long-term deficit spending and entitlement reform. Financial markets would be reassured and we’d avoid a potential spike in interest rates, which will only stall our struggling economy.