President Obama Addresses the Nation on the Debt Ceiling **
** This mythical address, of course, never occurred. But something like it should have happened a long time ago.
(As Prepared But Never Delivered, July 1, 2011.)
My fellow Americans,
I want to speak to you today about a matter of the greatest national urgency. We face a crisis unique in our history. This threat comes not from a foreign foe or bloodthirsty terrorists, but is no less dangerous and insidious. No, this challenge to the American way of life comes entirely from within. And the damage it could cause is as catastrophic as it is unnecessary.
I am speaking about the looming deadline to raise the debt ceiling of the United States.
On or about August 2nd, the government of the United States will hit the $14.3 trillion limit on its debt. Never in our 235 year history has the United States of America defaulted on its financial obligations. Never has Congress failed to raise the debt ceiling in a timely manner. Never has Congress put the full faith and credit of the United States in jeopardy.
In an act of reckless and unprecedented partisanship, Republican leaders in both houses of Congress have promised to block the needed increase in the debt ceiling unless an ever-shifting - and escalating - series of demands are met. At a time when this nation is fighting two wars and slowly emerging from its deepest economic downturn since the Great Depression, only now are Republicans demanding trillions in spending cuts which would slow our recovery, cost hundreds of thousands of jobs, and undermine our social safety net. Republicans insist that any new revenue from any source, even by closing tax loopholes for the wealthiest individuals and most profitable corporation in America, is "off the table."
If those demands are unmet, the same Republican Party which drove this economy into a ditch will drive it off a cliff. That is irresponsible and unacceptable. Congress should pass the $2 trillion increase in the debt limit right now and with no preconditions.
You don't have to take my word for it or even Treasury Secretary Geithner's warning that that default by the U.S. "would have a catastrophic economic impact that would be felt by every American." Back in January, Speaker Boehner himself explained, and I quote:
"That would be a financial disaster, not only for our country but for the worldwide economy. Remember, the American people on Election Day said, 'we want to cut spending and we want to create jobs.' And you can't create jobs if you default on the federal debt."
Economists, business leaders, think tanks and international financial bodies are in agreement regarding the dire consequences which would ensue. Mark Zandi, an economic adviser in 2008 to John McCain warned this week that failure to raise the debt ceiling by August 2nd would mean "I think we go into recession and my forecast would be blown out of the water." Bruce Josten of the U.S. Chamber of Commerce agreed that failure to pass legislation authorizing an increase in borrowing by Aug. 4 "would create uncertainty and fear, and threaten the credit rating of the United States." This week, 235 economists - including six Nobel Prize winners - signed an open letter to Congressional leaders urging them to raise the ceiling, and to do so "without attaching drastic and potentially dangerous reductions in federal spending." And the Standard & Poor's rating agency joined Moody's in warning that "the United States would immediately have its top-notch credit rating slashed to 'selective default' if it misses a debt payment on August 4."
Again, you don't have to take my word for it. Instead, listen to President Ronald Reagan from 1983:
This country now possesses the strongest credit in the world. The full consequences of a default -- or even the serious prospect of default -- by the United States are impossible and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets. The Nation can ill afford to allow such a result. The risks, the costs, the disruptions, and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns.
Ronald Reagan knew what he was talking about. After all, the national debt of the United States tripled during his tenure in the White House. And it would have been even worse had Reagan not raised taxes in seven of his eight years in office. As Alan Simpson, the co-chairman of my Commission on Fiscal Responsibility put it, "Ronald Reagan raised taxes 11 times in his administration -- I was here."
Now, some, like Speaker Boehner, have said that the early August deadline to increase the debt ceiling is "artificial." There are Republican members of both houses and GOP presidential candidates who have accused Treasury Secretary Geithner and this administration of "doomsday predictions that could only materialize at his own hand," of "scare tactics", and of "outright blatant lies." To those who claim that the debt limit need not be lifted and that the U.S simply "prioritize" interest payments on the debt, Secretary Geithner has been clear that "such uncertainty could cause the markets to doubt the full faith and credit of the United States." And the Republican opposition, or at least most of them, knows this to be true. To pretend otherwise, as Senator Jon Kyl is fond of saying, is "not intended to be a factual statement."
That is as unforgiveable as it is cynical.