News outlets in the US have been inundated recently with talk of the so-called “debt ceiling crisis”. With the August 3rd deadline fast approaching, US lawmakers have been hotly debating whether or not to increase the US government’s maximum allowable debt of 14.3 trillion dollars. Democrats and Republicans are staunchly holding their ground while President Obama is trying to broker a deal that will allow the US government to keep operating at full capacity.
Inaction could spell disaster just as much as a wrong move. Without a resolution, large parts of the US federal government, such as the justice, prison, and defense departments, would have to operate without funding or large federal programs, such as Social Security, would not be funded.
At the moment, talks between the various parties have stalled. Everyone is hoping for a resolution, but no one wants to pay the price that such a resolution might mean. Why here, why now? What is so unique about this point in history that such a impasse is being reached? It is not just the fact of raising the debt ceiling. The US government has already raised the ceiling ten times in the last 10 years. It seems that lawmakers are finally seeing that just raising the debt ceiling is not going to solve the problem. There has to be a larger solution than just borrowing more money.
The “crisis” is more than just a petty squabble between politicians. The implications are vast and far-reaching for the American populace as well as the worldwide economy. If the US government does not reach a sustainable solution in time, it is in danger of losing its AAA credit rating and with that the confidence of investors worldwide. The US dollar, which is currently the standard for worldwide trade, could be devalued at an alarming rate.
The bottom line is that the US government is spending more than they are taking in…a lot more. To fix this, Republicans want to cut government spending; Democrats want to raise taxes. Neither side wants to give any ground to the other.
Solutions for this situation are difficult to come by, but it seems that no one will get everything that they want. All sides will have to give a little. The government can’t keep spending money they don’t have. The financially viable way forward would seem to be a combination of the two views: spend less and bring in more money.
But most significantly, I believe that this issue raises a more fundamental question for those of us who live in the US: where is our trust? What do we truly depend on? The question remains relevant for all of us no matter where we live in this ever more connected global economy.
The world as we know it can change so rapidly. There is no guarantee of what tomorrow will hold. The US government, as every other government in this world, is fallible and will not last forever. Where does my hope lie? That Social Security will be around when I retire? That the stock market will continue to grow my investments so I can live comfortably? That I will wake up and have a job tomorrow? The current situation brings these questions close to home.
This “crisis”, much more than just a financial crisis, may become a crisis of faith and a chance to see where our hearts’ true allegiance lies. It may be a wake up call to us who are so lulled to sleep by the comforts of life that we cannot hear the call of eternity. Put simply, this crisis may be an enormous opportunity. It all depends on our vantage point.