The Real Issue With The Debt Ceiling

Much of the media attention surrounding the debate going on in Washington is about the issue of increasing the debt ceiling. If one reads Standard & Poor's recent report that placed U.S. government debt on "Negative Credit Watch", the primary issue cited in S&P's report was not simply an increase in the debt ceiling. A bigger issue cited in the report was Washington's lack of any credible plan on reducing the actual level of debt. In Standard & Poor’s Negative Credit Watch report S&P concluded,

“Congress and the Administration have not achieved a credible solution to the rising U.S. government debt burden [emphasis added] and are not likely to achieve one in the foreseeable future.”

The below video provides a clear summary of the current debate.

Lastly, Karl Denninger of The Market Ticker, provides a detailed summary of the debt issues facing the U.S. in a post titled, The Truth About Budgets, For Both Left and Right. It is an article that should be read in order to better understand the debt issue debate.