Sunday, October 13, 2013

Poll: Most Americans Don't Understand Debt Ceiling

A United Technologies/National Journal Congressional Connection Poll found that most Americans don't understand that the debt ceiling is raised to authorize paying for government debt already incurred, not to authorize borrowing for future federal expenses. The poll also found that a majority of Republicans, unlike a majority of Democrats, dismiss economists' concerns that defaulting on the debt would be catastrophic:

More than twice as many Americans believe lifting the limit means authorizing more borrowing "for future expenditures" than believe it means "paying off the debts [the federal government] has already accumulated"—62 percent to 28 percent, respectively.

The reality is that lifting the debt limit allows the Treasury Department to borrow money to pay for bills that Congress has already rung up.

...Treasury Secretary Jacob Lew has said the country will run out of borrowing capacity on Oct. 17. But a majority of Republicans, 54 percent, basically shrug at the deadline, saying it can pass without major economic consequences. Meanwhile, most Democrats, 62 percent, and a narrower plurality of independents, 45 percent to 38 percent, say it is "absolutely essential" to lift the debt limit.

...Most economists say that failing to allow the federal government to borrow more money, which would eventually lead to defaulting on bills, would seriously harm the economy. In the summer of 2011, when Congress last flirted with allowing the nation to breach the debt limit, the stock market took a dive and the economy slowed. The nation also lost its AAA credit rating from Standard & Poors for the first time.

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