Published February 07, 2013
As the battle in Washington continues, I often wonder why there is not more outrage from all Americans over the debt ceiling debate. I am disappointed, but not surprised, because most people don't really understand how to connect the dots -- to understand what increasing the debt ceiling means to them personally and, more specifically, to their purchasing power.
The issue is simple: Your ability to make ends meet is being ambushed by this administration and its policies. In order to pay for this increase in the debt ceiling, the government will continue to print money. When you print money, it lessens the value of the money you already have. This devaluation of your currency means you have lower purchasing power. So you cannot buy what you used to with the same amount of cash. It will be harder to feed your family, pay your mortgage or rent, clothe your family, pay your rising tax bills. It's going to be tougher to pay your water bills, electricity, etc.
Some might say that rising prices aren't a problem -- there are many theorists who claim there isn't any inflation in the economy. That is hogwash. Do not blindly accept the government's assertion that the rising cost of your goods and services -- as measured by the government's Consumer Price Index -- is accurately calculated. It simply isn't. It is a biased and manipulated index that in no way accurately reflects what it costs to maintain a constant standard of living year over year.
Just look at your own bills. Many years ago, I created my own study on the rising costs of living (www.chapwoodindex.com), and I found most Americans have seen their cost of living rise, on average, 10% a year.
That's a far cry from the official CPI. As a result of raising the debt ceiling again, the government will be required to print more and more money to meet the out-of-control spending. This will then increase the amount of money required by you to maintain the same standard of living that you did the prior year.
Additionally, another critical result of raising the debt ceiling will be a slowing of the economy. This will raise unemployment, increase food stamp usage, result in little-to-no wage increases, and will expand the need for entitlement programs.
This all adds up to one thing: your life will get tougher if the debt ceiling is raised without reigning in spending. This will impact every income level, but especially the middle class, because they spend a higher percentage of their income on items that increase in cost the most.
Having read this, you should be outraged and demand that spending cuts be tied to any type of debt ceiling increase. If you aren't beside yourself with anger, then wait until you go to the checkout line in your grocery store. When it hurts to pay that bill, you can thank the rampant spending in this country.
So make no mistake, the money used to raise the debt ceiling will be coming directly out of your wallet or purse.