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SALT LAKE CITY -- A retired Republican senator from Utah is saying Congress should vote to raise the federal debt ceiling, echoing the sentiments of key Obama Administration Democrats.
Bob Bennett, Utah's former U.S. Senator, tells KSL's Doug Wright that failing to raise the debt ceiling will send a message to the rest of the world that the U.S. is unable to meet its obligations.
It will mean that the United States for the first time in its history will have defaulted on its debt, when it has the capacity to borrow the money by selling new bonds to pay the debt.
–Bob Bennett
"It will mean that the United States for the first time in its history will have defaulted on its debt, when it has the capacity to borrow the money by selling new bonds to pay the debt," Bennett said.
He asserts this would set up a domino effect of bad economic news.
"That means people who have bought previous bonds will not get their money," Bennett explained, going on to add services like Social Security would also be hit. "The benefits will not be paid because the money won't be there."
Bennett says the debt ceiling isn't a limit on future borrowing, but a limit on current borrowing needed to meet current obligations.
"The debt ceiling is not a device to control future expenditures. It is a record of past expenditures," Bennett said.
If the U.S. were found to have trouble paying back its debt, Bennett says that would result in higher interest rates -- meaning even more debt in the long run.
"The impact of that would be catastrophic," Bennett said. "It will be artificially saying, 'We have the capacity to pay the debt but we choose not to.'"
Email: bbruce@ksl.com
