New Poll: 47 Percent of Americans Don’t Get It

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Imagine owning a million-dollar home with a $100,000 mortgage. You’ve got $900,000 of equity, so you’re pretty well off. But well off or not, you’re still required to pay the mortgage.

Now imagine that you don’t have the cash on hand to make a monthly payment. In fact, the only way you can scrape it up is to either forgo paying other bills or charge it on your Visa. Are either great options? No, but your only other out is much worse: not paying your mortgage at all. Miss the payment entirely, and your delinquency will be printed on the front page of your home-town newspaper. Your bank will raise your rates; or perhaps, stop lending to you altogether.

In short, your inability to borrow could plunge your household into a severe financial crisis.

What would you do? What most people would do – or at least should do – is two things…

  1. Use their Visa to make the mortgage payment
  2. Take immediate steps to deal with their financial issues.

This is the problem America now faces. We’re one of the wealthiest nations on earth, but for years we’ve been spending more than we’re taking in. It’s a problem for which there are ultimately only three solutions: spend less, take in more taxes, or a combination of the two.

Democrats want to spend less and take in more taxes. Republicans want to simply spend less. But while they quibble over which approach is better, the mortgage is coming due.

Two days ago the United States reached its debt limit. Without congressional approval, the U.S. can’t “pull out the Visa” to pay it’s bills. The Treasury Secretary shuffled some expenditures and bought Uncle Sam a little more time – we now have until Aug. 2 before some group will go unpaid, but the deadline is looming.

It’s too late now to meet our obligations by either slashing spending or raising taxes, because either approach will take years to solve the problem. In the meantime, the only way to pay the bills is to borrow more.

So what should we do? According to a recent poll, most Americans think we should simply not pay our bills.

On May 13, Gallup released the results of a poll suggesting 47 percent of Americans want their representatives in Congress to vote against raising the debt ceiling – to effectively not allow the government to borrow more. Among Republican voters, that number was 70 percent. Only 19 percent of Americans (8 percent of Republicans) want the debt ceiling raised, with 34 percent saying they don’t know enough to offer an opinion.

Only an idiot would think it’s a great idea to pull out the Visa to pay the mortgage without first working on a solution to the cash-flow problem. But to not pull out the Visa at all? That’s only going to make the situation worse – a lot worse.

Here’s what the President said at a recent town hall meeting, as quoted in this recent Yahoo News article:

“If investors around the world thought that the full faith and credit of the United States was not being backed up, if they thought that we might renege on our IOUs, it could unravel the entire financial system.”

Here’s another quote, from Matthew Zames, JP Morgan managing director and chairman of the Treasury Borrowing Advisory Committee. It’s from this New York Times article.

“Given the magnitude of the adverse consequences a default would have on Treasury borrowing costs and the health of the broader economy, action is urgently needed to increase the statutory debt limit.”

There are, of course, lots of people who disagree. Here’s Sen. Pat Toomey from this article on Real Clear Politics

‘This administration has resorted to repeatedly mischaracterizing and exaggerating the consequences of a delay in raising the debt limit. Apparently, they hope to intimidate Republicans into capitulating to their wishes to continue unconstrained deficit spending. This is a dangerously irresponsible tactic. It needs to end”

Despite these strong words, however, keep in mind that even Republican leaders like John Boehner want the debt ceiling raised. Their fight is about attaching budget cuts to the legislation that will raise it.

So here’s what I don’t understand: Why do so many Americans not want the ceiling to be raised at all?

Community members, what do you think? Is my analogy above off-base? Is the President exaggerating the problem? Should our congressional leaders refuse to raise the debt ceiling? Forward this story to your friends, then leave a comment below, or join the discussion on our Facebook page.

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  • http://www.facebook.com/people/Alison-Valery/100002004825555 Alison Valery

    Tea Party solution.  Let’s destroy the country with senseless policies and demands because it wasn’t  working right anyway. So what if our armed forces don’t get paid, and the sick, old and infirmed , well some will live some will die by the time this crisis is over, and?  Markets and financial institutions might crash, higher unemployment and reversal of recovery where we spent 2.6 trillion to try and rebuild economy from falling into a depression at the beginning of 2008, so what an end to a means we have defended our  ideaology,demands and the constitution (which by the way spills no human blood like the casualties of their folly).  The problem is people voted for the Tea Party even though they were part of the Bush and Chaney administration who rang  up  a 6 trillion dollar deficit, and they did it to stop Obama from helping them out of the diasterous, economic financial ditch the previous adminsitration left, so go figure!

  • Anonymous

    I’m all done with the politicians and talking heads telling us that we, the people, are wrong for insisting on no debt limit increase.  As soon as they get to DC they forget what they were sent there for.  They are the ones who are wrong!  The basic principle negates all of their “spin”…  “You can NOT borrow your way out of debt.”

    No more borrowing! Therefore, no need to raise the debt ceiling.  If you cannot make your payments on previous irresponsible loans, it is not the answer to borrow more to make the payment… that is stupid!  The answer is to renegotiate the debt or restructure the current debt so it can be serviced under current fiscal conditions.

    Cut spending drastically. That doesn’t mean cutting the planned rate of increase and calling that a spending cut.  It means cutting today’s spending… get it?  That means cutting entire departments, which are probably unconstitutional anyway.  

    Abandon big government ideology… bring government back under the constraints of the constitution. 

     It means attacking waste and graft in all areas with a chain saw not a nail clipper.  Send some people to jail.  It means my pension is going to take a hit… so be it.  It means finally abandoning political correctness and acting like we have some common sense.

    Enforce the laws on the books now.  If we find a law that is not working… repeal it.  Now.

    If the politicians who were sent to Washington to make big changes can’t get the job done, we’ll send someone who will.

    Again, politicians, WE are not stupid or ignorant.  You are… your brains have been besotted with Kool-Aid. Didn’t take long, did it?

    We obviously have more wisdom about what is going on than any politician who has been in DC for more than 20 minutes.  Stop ignoring the wisdom of your constituency.

    Don’t try to borrow our way out of debt.  Do not raise the debt ceiling.  Slash spending (today, remember?)  Eliminate regulations and regulators.  Take an honest look at the Fair Tax.

    Do this now.

  • Anonymous

    I disagree entirely.  Prorate the federal budget so that we don’t have to borrow any more money.  Give each department 3-5% less money next month than what they are expected to get.  If that means government checks are 2-3% lighter than normal or we have to cut the amount of money doctors get paid by Medicare or we have to lay off 20,000 federal workers and institute a hiring freeze, just DO IT and stop with all the hysterics.

  • Anonymous

    Everything I have read says that there is enough tax revenue to pay for SS, military, and debt service.  Just like at home, hard decisions need to be made, and there will be pain with a tough solution.  There is no pain free solution, so suck it up and deal with it.  It may be that we will eventually have to raise the debt ceiling a little some time in the near future until all the cuts kick in, but if we don’t do it, the moochers will demand more and the spending spree will continue.  

    Is there some correlation here?  47% want to “default,” and 47% of citizens pay no taxes (many of which also receive government assistance.)  Maybe those who are saying they want to “default” are really saying that everyone should contribute something instead of being a drain on the taxpayers.

  • http://www.facebook.com/people/Georgie-Porridgey/100000896313856 Georgie Porridgey

    If we deport Obama and the Democrat Party to a distant planet, there will be more money to spend on the rest of us than we know what to do with.  That is why they should never have ended the space shuttle program.  We need them!  How else are we ever going to get rid of the Democrats?

  • http://www.facebook.com/people/Georgie-Porridgey/100000896313856 Georgie Porridgey

    We wouldn’t have this problem if Obama wasn’t in the White House.  Get rid of Obama and our problems are solved.  If you ask me, 2012 can’t come fast enough,  Obama is unelectable for a second term.  I won’t vote for him again.  Donald Duck could run against Obama in 2012 and win.  Anybody want to be president?

    • http://pulse.yahoo.com/_JFSAFKSQMFQAZUIEF43HCU3SLQ Left Hook

      Like Republican presidents have a track record of cutting deficits?  Please, dude, read a history book.  The only time the deficit has been cut in the last 30 years, is during the terms of Democratic Presidents.  All the Republican administrations? You guessed it, exploded to deficit – even your savior, Reagan.

      • http://pulse.yahoo.com/_TO7QYY2L37D36RZNXC4BL5WUSM Roberta

        Daa! Reagan made a bad deal with the Dems. They are agreed to cutting $3.00 pf spending for every $1.00 Reagan agreed to raise in taxes. Reagan honored his part. The Dems in the House of Reps kept on spending. Reagan said
        several times it was one of the worse mistakes he made. The media will not tell you this.

  • http://twitter.com/MrkPrk MarkPirkl

    This is the stupidest comparison ever. Unlike a mortgage balance payment, the federal government can increase or decrease spending (e.g. the mortgage payment). Politicians need to stop buying votes by spending taxpayer money, or in the case of the current status, ruining our country for our children and grandchildren. The whole situation is sickening.

  • Anonymous

    Hi, I do think your analogy is off in a couple key areas.  Pulling out the VISA might be a good way to pay the mortgage … if the VISA were not already maxed out.  But it is, and now you’re suggesting trying to get the bank you raise your limit … yet again. What responsible bank would say yes?  Also, you neglect another option – sell the house and get a cheaper one.  Unpleasant, yes .. but we are out of pleasant options!  Sen Pat Toomey’s quote is right on the money – the President IS exaggerating the threat of default, in an attempt to intimidate Republicans.  I would guess that a lot of Americans don’t understand the consequences of failing the raise the limit.  It would be bad, for sure.  But I’d also guess that even fewer understand the consequences of ever-mounting debt, which will be worse yet.

  • David Sudekum

    Actually Stacy if you really want a good comparison try this one.  You are a family of 6 – Mother, Dad and 4 kids.  You have a 30 yr mortgage that you are paying on, you have the normal utilities and other monthly expenses.  Your take home pay after taxes barely cover your monthly expenses then along comes a major expense.  You borrow against the equity of your home to pay this expense.  Now things get interesting because you have more bills than you have money coming in per month.  

    If you are the federal government no problem we can just print more money, that is as long as the USD is the International Monetary Reserve Currency.  It is on it’s way out by the way, give it 5 – 10 years maximum and we will no longer be able to print money to cover our debts with out crashing our economy with hyper-deflation.

    Along comes another major expense so you borrow against the equity of the home again only this time the banker was not so eager to loan you the money.  Everything is good to go but now you are juggling your payments to your creditors.  In the real world this family would be flirting with bankruptcy. 

    The payments to our debts and outstanding obligations such as loans and coming due treasury notes are about 10% of the money we take in taxes and these are all ready paid for.  What!  The bills are paid for?  Some of them are, by the Constitution those bills are paid 1st then all the rest.  It is all the rest that the politicians are squabbling about.  Social Security and Medicare and Medicaide are sacred cows to the Obama Administration and the Democrats and will not be touched since doing so would set the senior citizen voters against the Democrats and Obama.  So what is left… The Military. By law that is paid for all ready.  I know … pet social programs that are scheduled to go into effect soon….nope those are not paid for.  Social programs for the undocumented…..nope not paid for……pet projects in different states….. nope not paid for.  Basically Stacy not raising the debt limit is the ONLY way to go.  Will it be painless…. nope not in the slightest. It will be incredibly painful for some.  It will mean for the Democrats and Some Republicans that they need to adjust how they think of the US.  We need to revamp the economy in such a way as business want to come back to the US instead of leaving.  Lower the corporate income tax and remove the restrictive laws that are driving out business right and left as well as jobs.  Time to make some difficult choices.

  • Anonymous

    Notice there wasn’t all this theater when the debt limit was raised 7 times under Bush. And the tea party types also never made a peep when Bush doubled the debt and expanded government.

    Our most urgent problem now (which is also greatly adding to the debt) is a crashed economy brought about by conservative “voodoo” economics — which have been great for enriching giant corporations and Wall St. execs. But it’s always the same nonsense: forcing austerity on working people (e.g. cuts in SS and medicare) is labeled “fiscal responsibility, while tax cuts for the wealthy and bloated and unaccountable military spending are held sacrosanct. The smokescreen used is as always “big liberal spending” on social programs.

  • Anonymous

    Stacy calling 47% of Americans “idiots” says a lot about you. Instead of thinking, wow maybe I’m looking at this the wrong way, you take the liberal view that everybody is below you, can’t think as well as you, and need to be taken care of. Get over your smug self and actually learn something by reading the responses here but I imagine you think they are all “idiots” and don’t really understand the inner-workings like you.  

  • http://www.facebook.com/people/Bill-Kirby/100000074424312 Bill Kirby

    I’ll use your Visa card analogy to explain why so many of us oppose raising the debt ceiling.  Let’s say your Visa card has a credit limit of $10,000 on it.  But you have already exceeded your limit and you now owe $11,000.  Raising the debt ceiling is the equivalent of going down to the bank and saying, “I can’t live within my present credit limit, so I want you to raise my limit to $15,000.  Do you think those money grubbers at BoA are going to do something that stupid?  I don’t think so.

  • http://www.facebook.com/profile.php?id=1565826276 Anonymous

    The part of the analogy you missed is that Congress is the stereotypical spend-crazy wife and the President is the husband forced to pay the bills and maligned for somehow not making enough, made worse by the fact that his wife also happens to be his boss, who decides what money will be available to him.

    This crisis continues to be characterized as the President being out of control on spending and the Congress being hapless victims to his whimsy, when the reality is that the vast majority of the President’s spending is for things that Congress ordered him (through legislation) to buy.

    To switch analogies: when the car is about to hit the brick wall is not the time to suggest we swing past Meineke for new brake shoes. Let’s avoid the brick wall first. Perhaps–hopefully–one thing that comes out of this crisis is a sincere, renewed conviction from both parties to get our spending under control. Simply rubber-stamping debt ceiling increases renders the entire concept of a “debt ceiling” moot… if VISA will raise my credit limit without question every time I ask, why would they establish a credit limit in the first place? So having pushback and public debate about the debt ceiling as a very good thing. Refusing to increase it at all, though, and causing the US to default or short-sell assets (another suggestion that’s been made) is not a good thing at all.

  • gradywhitefish

    You and Congress are the one that do not GET IT.  You don’t give an alcholic another bottle, no case, of liquor, and tell HIM to figure out a plan to stop.  That would be stupid, righ?  Our elected officials have no clue how to properly manage, budget and spend money.  I am willing to suffer the consequences of a default.  IT IS THE ONLY WAY to get their attention.  Yes, it will be tough, but we cannot put this problem off until we die and then stick our kids and grand kids with the bill.  How selfish, how uncaring, how mean, how evil to do so such a thing.

  • Anonymous

    I’ve been trying to wrap my head around this for awhile.  It never made sense to me that some people wouldn’t want the debt limit increased at all.  I understand people don’t like the current situation.  I don’t either.  But not paying the bills isn’t a very good option in my mind.

    However, what nobody has said–and it ought to be–is that the time for this argument should not have been now, but back when the budget was passed.  Remember that?  We nearly had a government shutdown, until the republicans flinched at the last second.  Well, if there was a time to stand on their principles, it was then, when they were committing the money to be spent, not now, when the piper has to be paid.  I’m still angry with the whole lot of them for not fixing it back when it made sense to do so:  when raising taxes and cutting spending may have made a difference.

    But now, we’re committed to raising the debt ceiling.  Come budget time next year, yell at your congressman until he remembers that, oh yeah, we ought to try living within our means.

  • Anonymous

    I’m not entirely surprised. They are probably the same 47% of Americans who believe in creationism. They think magic fairy dust got us here, and they think magic fairy dust will get us out of our financial and technological problems. It’s time we stopped believing in magic fairy dust.

  • Anonymous

    Peter way to bring your religious hatred into the discussion — that really proved your point. The 47% are the ones who actually have at least a rudimentary understanding of economics. Contrary to what the lies our media and president told we would not default on our loans. Cuts would have been made but that would be a good thing. Our system is broken. When you spend more than you take in the answer should not be to borrow more to pay off what you owe. It’s a sick and twisted way of running anything akin to a ponzi scheme and should scare anyone paying attention.