Debt Ceiling Versus The Late Financial Cliff

Here we go again.  Or, do we?  In raw political terms Republicans had to vote for the recent bill put forth by the Democratic Senate.  Had they not done so, taxes would have gone up on all tax payers.  Also, spending would have been cut through an across-the-board spending cut -- the very worst way of reducing spending.  Despite Donald Trump's yammering, it would have been awful for the country and for the Republicans.   For the country, because it would have made a horrible situation, even more horrible.  And, for the Republicans, because they would have been blamed for the tax increases.  Obama had the upper hand because, quite simply, he doesn't give a damn about the impending bankruptcy of the U.S.

However, failure to raise the debt ceiling presents the Republicans with a very different situation.  If the Democrats fail to offer a bill that offers a reduction in spending that will reverse the current trend, the Republicans can simply refuse to raise the debt ceiling.

Would this have negative consequences?  Absolutely.  America's credit rating would be downgraded.  This would inevitably result in an increase in interest rates.  It would also result in a decline in federal services;  e.g. it might take twice as long to get a passport renewed.  But, the effects -- in some cases fairly serious would be indirect.  Would many blame the Republicans?  Some, yes.  But, many have come to see the president for who he is -- a man who does his best not to compromise even if it is for the common good.

One more point:  If we don't get our fiscal house in order and reduce spending, America's credit will soon get pummeled anyway.  It would be best to take the credit downgrade now rather than later.  Putting it off will only make it worse when we finally, and inevitably, come to the point where we have to come to grips with our inability to pay for our many entitlements.