The following letter was received before Congress and President Joe Biden approved an agreement to increase the debt ceiling.
Janet Yellen advised that unless the debt limit is increased, the federal government will begin running out of money as early as June 1. This action is not unlike refusing to pay our private credit card bills, except it affects virtually every citizen and the entire world economy.
If the federal government is allowed to default on its debts, the result will be failure to pay Social Security payments, veterans benefits, medical payments, and other critical items that will be felt by those who depend upon these services. Jobs will be lost. Interest rates will be increased well beyond our control. A recession will result. The lasting effects on the economy will increase the deficit, which is exactly opposite to what the Republicans who oppose increasing the debt limit have intended.
The dysfunctional House, under Speaker Kevin McCarthy, has passed a Republican-only-supported bill to increase the debt limit, but mandates a 22% reduction of spending on everything other than the military. While Social Security is seemingly protected, the reality is if a default happens, one effect will be failure to pay Social Security benefits on time. However, support for ethanol businesses in the Republican Midwest states will be protected. Whew! I was worried about that.
Sheldon Whitehouse, chair of the Senate Budget Committee, held a hearing. The disastrous effects of failure to pay our bills was reinforced by all of the financial experts who testified. Whitehouse concluded his remarks by noting that 275 of 315 pages of the Republican House bill were devoted to protecting the fossil fuel industry. Huh? Is that what this is all about?