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Deadline to raise debt ceiling today
A clock on top of a $100 dollar bill represents keeping track of your money and watching your debt.
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STEVE CHIOTAKIS: The U.S. Treasury Department says today's the day the federal government will hit its $14.3 trillion debt limit even though Treasury's buying some time to delay a full-on default. There's still no deal among haggling lawmakers to raise the debt ceiling.
Fortune magazine's Allan Sloan says the Washington games are of course nothing new. Good morning Allan.
ALLAN SLOAN: Good morning Steve.
CHIOTAKIS: Why is it such a concern that we're having this debt ceiling debate?
SLOAN: Well, to those of us who are into financial markets, it's like watching little children running around in a dynamite factory with incendiary devices having no idea what they're doing.
CHIOTAKIS: Yeah that would be a problem. Would it have any -- I don't know -- any trickle down to us regular folks if we ended up not pushing up the debt ceiling?
SLOAN: I don't think it's going to happen, but I suspect it would get really ugly. There would be real problems. The United States could run out of money, could not make payments to people in the United States it owes money to like Social Security. I could throw you scenarios of the end of the world, and melt down that might or might not be realistic. It's just concerning to see this happen when in the end, no matter what happens, if the government runs deficits you've got to pay for it somehow.
CHIOTAKIS: Well, Allan, this whole debate though is not new. I mean the kids have been playing around in the dynamite factory for a long time right?
SLOAN: Right. The debate is not new. I think they're pushing it farther than they did the last time a couple of years ago when George Bush was president. People like then-Senator Obama said this is terrible. We can't increase the debt limit and the democrats at that point were the party of fiscal restraint, and the republicans were saying, "Be grown up and raise the debt limit." And now that the democrats are sort of in power, the republicans are pretending to care about the government's financial situation. It does get old, but an endless source of copy for people in the news business.
CHIOTAKIS: Fortune Magazine's Allan Sloan with us from New York. Allan thanks.
SLOAN: You're welcome Steve.
The US treasury brings in plenty of money to cover it's debt payments and Social Security. Anyone talking about the US defaulting on it's debts is echoing a political scare tactic. To think Mr. Sloan is talking about politicians being irresponsible.
Instead of stealing from what little Social Security has left in it's account, the treasury needs to start the government shutdown threatened last month. That will be the intervention we need to wake America and congress up to the fact we have a severe debt addiction. Only structural budget and policy fixes which start solving this problem within 5 years will fix America's already flagging credit rating.
Or we could wait for a more painful intervention from further credit downgrades. I wish Mr. Sloan had been responsible and covered the real danger here.
