The International Business Times has just reported that House Majority Leader, Steny Hoyer, says Congress may need to raise the U.S. federal debt ceiling by $1.8 trillion.
“It is December,” House Appropriations Committee Chairman Dave Obey said, “we don’t really have a choice. The bill’s already been run up; the credit card has already been used. When you get the bill in the mail you need to pay it,” he added.
By “pay it”, Obey means borrow for it.
Obey’s words perfectly encapsulate what has become the government’s chief fiscal operating principle: spend first, figure out where the money is going to come from later.
But while the American government may be in the habit of kicking into the future the question of how it can pay its bills, other nations are beginning to ask America this very question.
Last month President Obama visited China and found Chinese officials taking a keen interest in his healthcare reform plans. The Chinese’s interest in healthcare did not centre around the usual questions that have been preoccupying Americans. Instead, one participant in the talks recalled, “They wanted to know, in painstaking detail, how the health care plan would affect the deficit…”
It is not surprising that China should take more of an interest than most Americans in this crucial question. After all, the United States already owes China two Trillion dollars and could be forced to beg for at least half that much again if Obama’s health care promises are realized. “Like any banker,” the NYT reported, “they wanted evidence that the United States had a plan to pay them back.”
A brief survey of America’s financial foolishness will show that China has ample grounds for worrying that America might extend itself so far that it is left with no mechanism for paying back its creditors.
A legacy of foolishness…
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