Ron Paul says not raise the debt ceiling will force us to get ‘our house in order’. As a result, he says, we won’t be able to pay our bills until we get a hold of some revenue:
There are two problems here, one short-term and one long-term. The national debt will rise above the limit increased last year by Democrats at the end of their spending spree in short order, and the question of defaulting on debt service becomes real and could create a lot of economic damage. However, increasing the debt limit essentially puts off the inevitable, and it also allows Congress to procrastinate on the only long-term solution, which is to cut spending. Refusing to raise the debt limit would force the federal government to stop spending or create a default, but much of that spending occurs through entitlements — which means that the only real way to meet the current debt limit in the short term would be to severely cut non-entitlement areas, which would probably require significant cuts at the Pentagon.
In the long term, we need entitlement reform to reduce government spending, a reduction in the regulatory regimes at the federal level, and a massive scaling back of jurisdiction in relation to that as well. Not only would that reduce spending to rational levels, the economic boom it would create would raise revenues at the same time. In the short term, it might take one more bump on the debt limit to get through the process of restructuring the federal government to avoid default. Long term, conservatives all agree on the real solution.
We have to make the tough decision at some point. Republicans have said over and over that they want to reform entitlement spending but not jeopardize those who are receiving funds now. This decision to raise the debt ceiling comes pretty early and keeping it at its current level may cause them to balk on that promise. It will be an interesting debate over the next few weeks.