Debt Ceiling Raise Good or Bad?

Should I be happy that congress may have reached an agreement on raising the debt ceiling?

The case for Yes:

• The Tea Party stood their ground and was successfully able to get the talk of "increased revenue" (aka tax increases) off the board.
• US will not default on loans which would send our economy into a tailspin.
• There will be spending cuts equal to the amount the debt ceiling is raised.
• Our credit rating may not be downgraded.

The case for No:

• We have just allowed even more spending to happen and not improved our debt position in anyway.
• Congress has essentially kicked the can beyond the end of their terms and no action (besides spending) will happen before then.
• There is still a very good chance our debt rating will be decreased.

It is my belief, and many others, that a downgrade in our credit rating would have a disastrous effect on our economy. So what would cause a downgrade in our credit? Sure a default would certainly cause it. I don't think there is any question there. I also feel that a lack of a real solution to lower our total debt would also cause a downgrade. Our credit rating is determined by our ability to repay our creditors and they are not stupid. It couldn't be more clear that we have a serious debt problem with no proposal to fix it. Kicking the can further down the road and allowing us to borrow more is not a solution!

So do I support the agreement that has been made. Absolutely not... Do I support doing nothing at all? Of course not. It is my belief that what is required is a much smaller debt ceiling increase, an IMMEDIATE decrease in spending, and a balanced budget amendment going forward. I also have no problem letting this happen well past August 2nd with the passage of a bill that prioritizes what we WILL pay first. The first of those is the interest on our debt followed by liabilities such as social security, military wages, medicare, etc... The bill would require each and every expense to be prioritized with the "saving turtles in CA fund" and similar being at the bottom.

Finally, the ever popular question, why can't we just "enhance our revenue"? First, studies show that increasing taxes on the rich does not generate additional revenues. The richest Americans will simply invest their money elsewhere. When they invest elsewhere they move the jobs from the US to other countries. When jobs get moved elsewhere unemployment increases and thus the base of tax payers is further depleted while the base of those who receive benefits increases. That is why tax increases are not reasonable...

This issue is one that I have gone back and forth on. On one hand I know that the 2012 elections are going to be critical to the future of the this country. If CONSERVATIVE republicans hold out and there is a credit downgrade they would be blamed. If conservatives come to an agreement and the debt it downgraded they will also be blamed. We have already seen the media saying the tea party is responsible for the agreement and that couldn't be further from the truth. If you look at the members of congress that are supporting it, the TRUE tea party members are holding strong. I believe that if they continue to stand their ground and be honest with the public, that is the best outcome they can have at this point. Because our debt it likely to be downgraded regardless of what happens at this point, the best fiscal and political move is to stand their ground and have faith that Americans will see through the blame game and support them in the 2012 elections.