America’s national debt hit $8.27 trillion in March 2006 when then-Sen. Barack Obama, D-Ill., called the national debt “a sign of leadership failure” and promised to vote against raising the debt ceiling. Fast-forward to today with the national debt at $14 trillion, a 70 percent increase in just four years. What Obama has mostly done on this issue is make the problem worse. His 2010 budget deficit of $1.3 trillion accounted for a third of the nearly $4 trillion he and the Democratic Congress have added to the national debt in the two years he’s been president. Obama’s view on this issue has certainly changed since 2006. He now sends out Austan Goolsbee, his chief economic adviser, to predict an economic calamity if the national debt ceiling is not raised: “If we hit the debt ceiling, that’s essentially defaulting on our obligations, which is totally unprecedented in American history.” Similarly, Obama’s Treasury Secretary, Timothy Geithner, warned of “catastrophic damage to the economy” if the debt ceiling is not raised. We suspect that what these worthies really see as catastrophic is having to junk their current spending plan, which projects the national debt to explode to $26 trillion by the end of this decade.
Contrary to these Cassandra prophesies, refusing to lift the debt ceiling would not be a disaster. The Republican Congress refused to do it in 1995, insisting instead that President Clinton agree to reduce federal outlays. Clinton saw the light and the government survived just fine until the GOP relented and raised the ceiling in March 1996. The moral of that story is Obama, Goolsbee and Geithner should stop fear-mongering and get serious about working with the Republican House to reduce federal spending.
