Nick Gillespie, editor in chief of Reason.tv and Reason.com, has a great column that spells out five facts we all need to know about the debt limit and that we should keep in mind when talking about the issue.
* August 2 is an arbitrary date.
* Reaching the debt limit is not the same as defaulting on the federal debt.
* Both sides are using the August 2 deadline to negotiate terms; the plain fact is that both sides are trying to get something out of the current moment.
* This is no way to run a country. A February 2011 Government Accountability Office (GAO) report on the debt limit has sparked a lot scrutiny because it found that in some (though not all) recent cases where debt-issuance auctions were delayed, markets responded by increasing the government's borrowing costs. The real takeaway, however, is that procedural changes adopted from other countries might help to actually link spending to its effect on national debt.
* This is no way to run a country, part two. The debt-limit debate has to be properly understood in its larger context of a country whose spending has effectively run amok for at least the past 10 years, during which time federal spending has increased by over 60 percent in inflation-adjusted dollars.
For complete article go here.