You have to hand it to the American public, and yes, even to elected officials, for making the national debt a top-line issue in the national dialogue. It’s become increasingly difficult, in an era of Lindsay Lohan travails and royal weddings, to get people to focus on something as deadly serious and unexciting as the debt.
But as a Washington Post-Pew Research Center poll shows, people may not necessarily grasp the concept of the debt. Of those polled, 48 percent said they were more worried about the impact of raising the debt limit than they were about the consequences of not raising the debt limit. Just 35 percent said they were more nervous about the impact of default. [See a slide show of 6 consequences if the debt ceiling isn't raised.]
They’re both unappetizing choices, to be sure (and Congress has until early August to fall on one sword or the other). Raising the debt ceiling understandably makes some people concerned that we are merely continuing down the same, fiscally irresponsible path. But default could send the markets and the overall economy into chaos. [See a slide show of 6 ways to raise the debt ceiling.]
Perhaps it’s because of the way Americans have become used to handling their own finances. Some of us grew up in an era when we bought things on lay-away; now, it’s common to plunk down the credit card. Making it worse, many of us don’t see the use of a credit card as actually buying on credit--rather, it’s become a convenient way to avoid carrying too much cash. But inevitably, the balances--and the interest--grow. Banks may then (unasked, often) merely increase one’s credit limit, escalating the problem, Raising the debt limit arguably does the same. [Check out editorial cartoons about the budget and deficit.]
But allowing default would be tantamount to deciding not to pay one’s bills. It’s not the same as declining to buy more things with the over-used credit card. The country has obligations--to debt servicers as well as to people, states and programs getting federal monies--that it’s already committed to paying. Over-spending (whether it’s actual outlays or tax cuts) may have gotten us here, but we can’t get out of it by simply refusing to meet our current obligations. One way or the other, America’s bill will become due. The question is how much more damage will be done to the economy in the meantime.