Reagan on Defaults

The fierce debate over the nation's debt ceiling is one that has been raging for many decades now.

Over that time, the debt ceiling in the United States has been raised dozens and dozens of times. Both Republican and Democratic Presidents have been occupying the White House when increases to the debt ceiling have been signed into law.

A number of prominent politicians in Washington have publicly stated that the debt ceiling should not be raised - no exceptions. Others say that an increase in the debt ceiling should be accompanied by massive cuts in spending.

As mentioned, the debt ceiling has been a hot topic of debate for a number of decades now. As a matter of fact, Ronald Reagan (who left the White House with an approval rating of 63%) spoke out a number of times regarding the debt ceiling and the possibility of a default if the ceiling wasn't raised.

Here is what Reagan said about the subject in 1983:

"The full consequences of a default — or even the serious prospect of default — by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar in exchange markets. The Nation can ill afford to allow such a result. The risks, the costs, the disruptions, and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns."

Here is Reagan in a radio address from 1987:

"Congress consistently brings the government to the edge of default before facing its responsibility. This brinksmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets, and the Federal deficit would soar."


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