Debt Ceiling: Tax the Rich

President Barack Obama attacked Republicans then House Speaker John Boehner attacked Obama during their Monday night back to back prime time speeches. I guess you can call it “just another day” in Washington but with Aug. 2 fast approaching perhaps we’re better off just calling it “end of days”.

The current debt limit is $14.3 trillion but the U.S. reached that back in May. There is still reason to believe that a deal can be agreed to but if partisan politics trumps compromise instead, the consequences could get ugly. Medicare payments, social security payments and even student loans could go unpaid. A lower credit rating is also likely. Since 1917 the U.S. has maintained a AAA rating. Without a plan to close the gap between debt and income, the financial community won’t look at America as a prudent borrower.  If investors are cautious and refuse to lend the money, then that could cause panic on the markets. The International Monetary Fund has already warned that there would be a severe shock to the world economy if the U.S. runs out of cash to pay its bills. If the U.S. were to default, it would be the first time in the nation’s history that this has happened.

During the latest round of talks Obama brought to the table a solution to cut spending by $3 trillion while raising taxes by $1 trillion over the next 10 years through tax hikes on higher income earners. Republicans agree with the president’s plan to cut entitlement programs but have been passionate in their opposition to the tax hikes for the wealthy.  

So there it is, tax the rich, and stop the default. That's where the president has drawn his line in the sand.