As Congress considers raising the debt ceiling again, the nation must realize that, unlike the Biden administration’s swift response to the student debt crisis and Silicon Valley Bank (SVB) failure, American taxpayers will not receive a bailout from a national debt disaster.
Government employees, media pundits, and politicians often note the hardships people will suffer if the federal government does not make taxpayers pay off their student loan debts or cover their financial losses due to a bank failure, but they rarely mention the burden the growing national debt puts on Americans.
Last week, depositors rushed to withdraw their funds from SVB as it swiftly and spectacularly crashed into insolvency. The Federal Deposit Insurance Corporation now controls the bank. SVB fell largely because it sold the low-interest government securities it had held in reserve at a staggering loss. SVB’s collapse is the largest bank failure since 2007.
Now, at the same time SVB has come under FDIC control, the debate about whether Congress should raise the debt ceiling roils in Washington, DC.
Truth be told, the roiling is mild. There is a consensus among most members of Congress, the Biden administration, and the punditocracy that the debt ceiling should and will be raised. The modest debate primarily concerns how much to raise the ceiling and where to cut the budget to appease the deficit hawks. Very few officials, representatives, or talking heads question whether the ceiling should be raised at all.
Budgetary experts in our nation’s capital claim it would
