U.S. Hits Debt Ceiling, but Default Is Completely Avoidable

Romina Boccia /

Now that the U.S. hit its $14.3 trillion debt ceiling on May 16 and the doomsday predictions of the financial apocalypse that was going to tank the economy failed to materialize, the question remains: How should Congress respond?

Congress has until August 2 to respond. It could raise the debt ceiling without any other policy changes or keep the existing debt limit and force the Treasury Department to make substantial reductions in non-interest spending. It could also raise the debt limit but make substantial, immediate spending reductions accompanied by tough budget reforms. No matter what course Congress decides on, it is vital that Congress and the President acknowledge that the root of our debt problem lies in out-of-control government spending and take the steps necessary to get the budget under control. (more…)