Tuesday, January 18, 2011

The Debt Ceiling--Can I Raise My Debt Ceiling Too?

Former Minnesota Governor Tim Pawlenty argues against raising the debt ceiling and makes a common sense suggestion for Congress--pay our debts first.
In an interview with The Wall Street Journal Sunday and in an appearance on "Fox News Sunday," Mr. Pawlenty challenged even leaders in his own party, who have said Congress must increase the federal debt ceiling rather than risk a default that could send interest rates skyrocketing and the economy back into recession.

Mr. Pawlenty said Congress should pass legislation that would put interest and debt payments ahead of other federal spending and allow the federal government to pay its creditors as tax revenue flows in. With the surge of tax payments that come in between April and June, that would at least buy time to try to cut spending dramatically, he said.

This makes sense to me, because that is how real people do it.  Look, when you and I get paid, we have to prioritize our payments.  Maybe you put a savings deduction or a religious tithe first, but at the top of your (and my) payment list is things like:

credit card debt payments
utility payments

Regardless of how you do things, normal people pay their debts before embarking on new spending.  The federal government should be the same.  If the government pays its debts first and only then addresses other spending or new spending, they will find themselves with less money to play with.  Congress then pays the debts  (thus securing the long term financial health of America) and then can spend the rest in a fiscally responsible manner (we hope).

Makes sense--you know like real people sense.

No comments: