Dems & GOP Spar Over Debt

House Speaker Kevin McCarthy (R-Calif) rejected President Biden's demand for a "clean" debt ceiling hike, saying "cramming a bloated federal spending package through during the 'lame duck' session showed total disrespect for the American people's concerns about government overspending. The Republican majority in the House intends to give these concerns a fair hearing. Fending off bankruptcy should be a bipartisan effort."

Secretary of the Treasury Janet Yellen called the Republicans' focus on the national debt "naive. The federal government isn't your random seeker of borrowed money. It is the most powerful organization on the planet. It can crush any opposition--foreign or domestic. It can take whatever it needs from anyone it wants to. It can even create new money out of thin air. The debt ceiling is just an arbitrary number. A simpler solution would be to abolish the ceiling."

Senate Majority Leader Charles Schumer (D-NY) called McCarty's resistance "futile. The GOP may hold the majority in the House, but they can't force the Senate or the President to compromise. Sooner or later, the Republicans will have to give in. If they don't, we and the media will blame them for whatever calamities or inconveniences that result from failure to pass a clean debt ceiling increase and the voters will then punish them at the polls."

"The Democrats' insistence on no limits to federal spending has sparked the highest inflation in since the 1980s," McCarthy argued. "Taxpayers are now paying $500 billion in interest on the money borrowed because we don't have a balanced budget. This cannot go on."

Yellen asserted that "what the Republicans don't understand is that the federal government would actually come out ahead if our dollar becomes worthless. As the world's biggest debtor, a collapse of the dollar will let the US government off the hook. All the debt would be wiped out by a flood of newly created worthless dollars. The only losers would be those who foolishly hold dollar-denominated assets like cash and bonds."