Congress now has to tackle the debt ceiling

7:34 PM, Jan 2, 2013   |    comments
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MINNEAPOLIS -  The cushion of the fiscal cliff might feel a little prickly, especially considering the glass ceiling we are about to crash through.

"If we don't approve our debt ceiling it automatically means some of the checks of the government would have to bounce, some people getting payroll, vendors to the government, people might actually not be paid," University of St. Thomas Finance professor Dr. David Vang said Wednesday.

Looming over the heads of lawmakers is the debt ceiling.

Its limit of 16.4 trillion dollars is near and congress needs to act to raise it, which it has dozens of times, but in the last two years this issue has become predictably political with House republicans saying no to the raise unless democrats enact spending cuts.

President Obama spoke to that Tuesday night saying it's not up to just his party, it's up to all.

"We have got to do this in a balanced and responsible way and if we are going to be serious about deficit reduction and debt reduction then it's going to have to be a matter of shared sacrifice," the President said.

Spending cuts are popular to talk about but darn near political suicide to enact.

But they have to happen.

If we wait too much longer, Dr. Vang says, say five years, our nation's debt reaches the breaking point.

"That would get us to debt GDP ratios that are so high they put us in a range where Greece is right now," Dr. Vang said.

Right now, America collects 17 percent of GDP in taxes; we spend 25 percent on government services.

It's a negative sum game that sooner, rather than later has to end.

Because right now, and for the better part of the last 60 years we've operated at a deficit.

Now it's time, to find a better way.

The question is, can our lawmakers, come together, to do it.

"We are now to the point we have to decide what we are actually going to cut, and that is a much more difficult political discussion that just saying let's negotiate growth rates," Dr. Vang said.

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