With nearly half of all Americans, according to the latest CNN poll, saying they fear America is on the verge of another “Great Depression,” Barack Obama and Congress continue their debt-ceiling tango.
It’ not just that the various groups involved — the Keynesians, the Cloward-Pivenists, the green eye-shade deficit hawks, and the supply-siders — want to lead, it’s that they all want to conduct the band.
The debt ceiling, the legal limit on borrowing by the federal government, is a critical issue. Currently it’s just over $14 trillion, and with all the borrowing the Obama administration has engaged in to fund initiatives like the stimulus program, total U.S. indebtedness is rapidly approaching that number. If the debt ceiling is not raised, the federal government would have to cease borrowing — meaning it could, for the first time ever, default on its obligations.
Some people — especially adherents to the strategy developed in the mid-1960s by sociologists Richard Cloward and Francis Fox Piven — would likely cheer the chaos that would result from a default, as their stated objective is to overload the social welfare system until it collapses under its own weight.
For the rest, however, the need to increase the debt ceiling has created a debate between those who want to key the country on the course Obama has set for it and those who want to use it to trigger major reforms in government spending.
Right now all the action is in the U.S. House of Representatives, where The Hill newspaper recently reported that a majority of the House Republican Conference sent a letter to House Speaker John Boehner (R-OH) and Majority Leader Eric Cantor (R-VA) “laying out conditions to be met before a higher debt ceiling is agreed to.”
The letter “called for discretionary and mandatory spending cuts to halve the budget deficit next year, spending caps to hold Washington’s spending to 18 percent of gross domestic product, and passage of a balanced-budget amendment.”
The strategy, which is known by its nickname “Cut, Cap, and Balance,” is expected to dominate the discussion surrounding the debt ceiling as events move forward.