Why You Should Ignore the Coming Debt Ceiling Debate

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Under the guise of yet another debt ceiling debate, Republicans and Democrats will spend much of the week demonizing each other on the Washington stage.

But don't be fooled. This so-called debate will be nothing more than a planned-in-advance sideshow to supply each side with 2012 election campaign fodder.

The deal put in place on Aug. 2 essentially guaranteed that the limit on the U.S. national debt would be raised to $16.4 trillion in January. That means any sound and fury that emanates from Washington this week over raising the debt limit will signify nothing.

"It's pro-forma. They already made a deal to raise the debt ceiling last time around," said Shah Gilani, Money Morning Capital Waves Strategist and author of the Wall Street Insights & Indictments newsletter. "The President has to ask for the increase — which makes it look like he caused it — and the Republicans get to display anger that "here we are again.' But it's a game they agreed to earlier."

The deal in August intentionally split the debt ceiling increase into three separate requests to set up these faux debates for public consumption.

U.S. President Barack Obama did his part on Thursday by making a formal request for the $1.2 trillion increase in the debt limit.

That was the cue for Republicans in the House of Representatives to draft a "resolution of disapproval" which they will debate and vote on this week. And given that the GOP has a majority in the House, the resolution is guaranteed to pass.

In this play's next scene, the Democratic-controlled Senate rejects the resolution, which allows President Obama's requested debt ceiling increase to take effect by default – just as all sides envisioned back in August.

And even if a few rebellious Democratic Senators vote with their Republican colleagues, President Obama can veto the resolution. With the odds of Congress overriding a veto near zero, the debt ceiling increase is pretty much a lock.

But the show must go on.

Expect both parties will recycle liberally from the script written during last summer's bitter debt ceiling debate as they play out the charade. The Republicans will again decry the Democrats' fiscal irresponsibility while the Democrats tag the Republicans as extremists unwilling to compromise – talking points that will come in handy on the campaign trail.

The hypocrisy of it all is so blatant even some lawmakers are pointing it out.

"Anyone who supported this deal back in August but then votes to oppose the debt limit increase this upcoming week should take no credit for standing against reckless spending," Rep. Tim Huelskamp, R-KS, grumbled to Fox News.com. "The real opportunity to stand for fiscal responsibility was in August."

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  1. Thokozani | January 16, 2012

    How can i have an account i was to open an account .
    I need your assistance to benefit .

    Regards
    Thokozani

  2. Werner | January 16, 2012

    Looking at the political theater in Washington, how do you want the world abroad to have respect of the US? It is not laughably but highly disquietening!

  3. Wayne | January 16, 2012

    To say that the debate will have no significant consequence is laughable. There will be significant affect on the perception of the American public and the World public on the actions of Congress as it affects the economy (or even the perception of our economy) and how it affects the world economies.The games played out in Congress in August and the games being played out now in our government have significant affects on both our and world economies. We can no longer depend on our leaders to put the interests of the American people at the top of their agenda. Their only agenda is to line their pockets and to keep themselves in power. And the only recourse "we the people" have is to join the movement to remove them from power. With the knowledge that "they" don't represent us, we MUST vote them out. Not one or two of them, but all of them. The message MUST be that YOU work for US, not for Wall Street or the lobbies or to line your own pockets. Congress must be brought back under the control of the people. It makes no difference which party controls the House or Senate if they realize that "we the people" control the ballet box.

    With this in mind, "we the people" have to push for reforms such as Congressional term limits, Congressional pay and "perks", pensions and health care, and making Congress abide by the same rules as the average citizen. No more insider trading, no more selling influence or votes, no more under the table deals. And we need to limit the amount of money any one candidate is allowed to spend to gain office and where that money can come from. It will take time, but "we the people" can with diligence a determination take back our government.

  4. Benton H Marder | January 16, 2012

    Does anyone really think that Congress (both parties) or the Administration were ever serious about the debt and the deficits? Anyone that cherishes such illusions will buy a bridge to nowhere. The USA is headed for the stone wall at flank speed. There is no other course on the charts.

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