Within weeks, the US Treasury will reach its legal limit of government borrowing, and stalemate in Washington could cause the US to default on its current loans, precipitating a global collapse worse than 2008.

 

The president demands a “clean” increase on borrowing, with no conditions or compromises, but Republicans insist on major restrictions on spending, insuring we won’t keep raising the limit in the future. This battle clearly damages Obama, since it automatically highlights his record-breaking spending. And why wouldn’t he agree to budget cutting mechanisms like spending caps, or automatic trims if deficits continue? Federal spending is approaching 25% of GDP, sharply higher than the 60-year-norm of 18%, and what significant new services could possibly justify this burden? If the economy crashes on Obama’s watch, the public will rightly blame the president for failing to foresee or avert the catastrophe.