America’s debt ceiling maxed out on Monday, May 17 at $14.3 trillion dollars. The National Minority Business Council (www.nmbc.org) reluctantly endorses raising the debt ceiling and the United States government’s dependence on foreign creditors, China in particular. NMBC recommends that the debt ceiling be raised by 50 percent, to $21 trillion, in order to give the Federal government a financial cushion to get through these extraordinary times, as well as to give our foreign creditors reassurance in America’s confidence in its ability to meet its financial obligations, long-term.
But, at the same time, NMBC urges members of Congress and the White House to come together to institute stringent budget cuts, income tax restructuring, and more job creation programs.
“Unfortunately, in order for the United States to keep paying its bills the debt ceiling has to be raised. If the US Congress refuses to increase the debt limit, the country will default on its current debt repayments and possibly fail to meet its fixed obligations, including on-time mailing of Social Security and Medicare checks and even meeting the national defense payroll. These are financial risks our country cannot afford to take,” said John F. Robinson, president and CEO of the 39-year-old NMBC that represents largely entrepreneurial enterprises owned by people of color, women and veterans. .
Robinson noted that when Standard & Poor’s put U.S. Government bonds on a “negative watch” in April, the markets dropped sharply. “Such action weighs heavily on economic growth prospects, particularly for privately-held small business owners. If the government starts defaulting on its financial obligations, foreign investors will increase interest rates on future American debt. The consequences of these macroeconomic decisions will trickle down to America’s small businesses making microeconomic decisions about meeting payroll and other overhead expenses in order to keep their doors open,” warned Robinson.
NMBC Chairman Ben Jones acknowledged Treasury Secretary Timothy Geithner’s letter to Congress on Monday, informing it that the federal government would now begin a “debt issuance suspension period” including reducing government investments in two federal employee pension funds, as part of a series of “extraordinary measures” to keep the government from defaulting on its loans through August 2.
“But America’s small business owners and their customers can’t wait until August for our national leaders to take non-partisan action,” said Jones, the owner of Lightning Supplies, Inc., a Teaneck, NJ-based distributor of industrial safety products, chemicals and janitorial supplies. “Furthermore, the electorate should not wait until November 2012 to send its national representatives the message that we do not like the way they have been allocating our tax dollars. Putting off unpopular policy making decisions and legislation about government spending and borrowing, in order to assure their reelection, will further weaken the American economy and any measurable recovery.”
Robinson noted that every American with a credit card has received correspondence from their card issuer with attention-grabbing messages printed on the outside of the envelope about “important information about your credit card inside.”
“These messages work and most people will open such correspondence. Now imagine sending members of Congress letters with a similar “important message about your credit card” printed on the outside envelope, but in Mandarin Chinese. Would the envelope get opened? After all, the Chinese government is the largest holder of American debt. If it and other creditors demanded re-payment tomorrow, every man, woman and child in America would currently owe $45,000!
“Raise the debt limit, reduce spending and dependence on foreign creditors, and restore the world’s faith in the American economy.”
The National Minority Business Council, Inc. (NMBC), a not-for-profit 501 (c)(3) corporation, was founded in December 1972. The primary purpose of the organization is to enhance the success and profitability of the small business community through the provision of high-quality services, programs, advocacy and networking support. The secondary purpose is to act as an information clearinghouse for the women- and minority-owned business enterprise (MWBE) community.