Get the REAL Facts about Raising the Debt Limit

By Zach Foster

A recent press announcement from the Federal Reserve would lead Americans to believe that failing to raise the debt limit “would have catastrophic economic consequences.”  Despite the glossiness that the economists hired by the Federal Reserve Board of Governors that might make a “slight increase” seem like a sensible thing to do, and even downright responsible, IT IS NOT TRUE.  Failing to raise the debt limit would not have catastrophic consequences at all.  Any “catastrophe” appearing to result from suspension of payments by the federal government for salaries or operations that would occur, if Congress took the high road and enforced it this time, would NOT be a consequence of enforcing the debt limit; any and all catastrophe would be consequences of the last seventy-eight times the debt limit was raised.

The federal government cannot continue to incur debt any longer, especially at the rate of eleven trillion dollars of debt incurred under the Obama administration.  If things aren’t going to be paid for, then it is up to Congress to cut federal expenditures and to do so immediately.  Congressman Ron Paul (R-TX) has repeatedly recommended across-the-board cuts so that all expenditures are affected equally.  Yes, it will be painful, but it has to be done.  Someday large portions of the national debt may be called in by the loaners (foreign banks and foreign governments), and America’s inability to pay will make hundred dollar bills useful only as fuel for fires and toilet paper for private-area hygiene.

Congressman Paul has also repeatedly called for the abolition of the Federal Reserve, because the existence of that entity is parasitic to the national economy and only grows the federal debt.  The Fed wants the federal government debt to grow.  Some might ask why anyone would want this.  The answer they seek is that the Federal Reserve is a bank that loans money out, even to the federal government, and the Fed is running quite a racket.  Every dollar that the federal government speaks into existence and is printed or minted by the Treasury Department is actually being loaned to the federal government by the Federal Reserve, and the Fed charges interest.  Therefore, not only is it bad enough that the constant printing of money makes the dollar worth even less, but the government is already in debt to a bank before it even gets to print its own money.  The amount owed is ever increasing, since interest rates accumulate and compound the balance owed.

The debt limit has been raised seventy-eight times since the year 1960, which means this willful self-impoverishment has only gone on for sixty-one years.  If the country managed to survive 184 years without greatly raising the debt ceiling, then it can manage going more time without allowing greater debt.