A Curious Bystander

Megan Chrisler, Staff Writer

A former administration economist for President Barack Obama, Jared Bernstein, reported to NPR that in reality, the U.S.’s deficit is shrinking. Instead of looking at it as trillions of dollars in debt, he says, people should see it as a percentage of the GDP. Once approached this way, the budget deficit was actually four percent of the GDP last year, compared to ten percent in 2009. If this trend continues, eventually the debt crisis should solve itself. However, this is eclipsed by the fact that if the debt ceiling isn’t raised by the end of the month, the U.S. could default for the first time in history.

Feb. 7 was when the government hit the debt ceiling, forcing the Treasury Department to take measures to save as much as possible, such as ceasing the issue of securities to state and local governments. Feb. 27 is the projected date when the government will run out of borrowed money, leaving it with only $50 billion of cash on hand with a debt of over $15 trillion—that is, unless Congress can agree on raising the debt ceiling.

And Congress has been really good at dealing with the debt crisis in the past couple years, right?

In their defense, they have been good at raising the debt ceiling; they have voted to do so three times since 2011, according to USA Today. Both Democrats and Republicans are eager to avoid a default, since that would ruin our credit rating and cause economic chaos. However, all three votes have been past deadline. So, although they agree they don’t want to default, they don’t agree on how to avoid it.

Republicans, for instance, have consistently asked for spending cuts. The Obama administration has done so, but not as much as Republicans would like. According to The Washington Post, they have discussed trading a one-year extension on the debt ceiling for either approval of the Keystone XL pipeline—helped by a recent State Department report that claimed it did not significantly harm the environment—or a repeal of the parts of Obamacare that allow the government to benefit or fail from the risks and gains of the market. Conversely, Democrats would probably not mind a clean debt ceiling increase. In fact, income inequality is a much bigger issue for the party than the debt ceiling is.

The good news is that this situation probably won’t end in a default—both parties are too aware of the serious consequences a default would create. They’ll come up with some solution, even if it’s last minute and with contempt. But there will be fights along the way, and that is just as serious an issue as the debt ceiling is. Congress’s inability to work with itself has led to this problem in the first place, and it will continue to worsen if they can’t compromise, shrinking deficit or no. Even though NPR reports that the fight may not be as bitter as in the past, the contention between the two parties will still be there.

Whatever Congress does, just remember one reassuring fact: elections are in November.