News Talk 94.1/AM 1600 Where The Upper Cumberland Talks
The United States officially reached its borrowing limit Thursday does not necessarily mean the United States is facing a fiscal emergency.
That’s according to Tennessee Tech’s College of Business Dean Dr. Thomas Payne. Payne said the $31.4 trillion debt limit was reached by the country’s yearly deficit continuing to add up. He said the government has had a deficit every year since the 70s with just a few exceptions, but there are options to help the debt ceiling issue.
“The Department of Treasury and Janet Yellen, they could sell off investments they could not invest some of the federal government retirement plans into additional treasury issues thereby keeping us below the debt ceiling,” Payne said. “There are things we can do for a little while.”
Payne said we will have to watch Congress decide what to cut spending on and what to invest in as conversations continue into the summer.
Payne said the immediate effects of reaching the debt limit can be seen in government offices closing, namely parks. He said when that occurs, people should expect to see some inefficiencies.
“As we add to the debt, more and more debt, it’s just going to pay interest,” Payne said. “It’s not going to feed people or build roads and bridges it’s just going to pay interest (…) How we spend our money matters because if we are spending it on infrastructure, then that’s something that our kids and grandkids can use in the future, that’s something that has value that even though they’re having to pay back the debt, they’re getting good use–schools, roads. But if we are just spending it, then sure, we’re getting benefit from it now, but we’ll have to pay it back later. Really that’s a tax.”
