After a bruising fight in Congress, it was finally decided to raise the Federal Debt ceiling until 2012 and then figure out how to cut more out of the debt later on. This fight where there were no clear winners and held the country and world financial markets hostage till the last moment was not the finest hour of democracy. If we had to raise it, why did we not do it earlier? Anyway as they say better late than never. But putting more debt over a debt which we have not paid down any principal is not a good idea if you ask a common person. But I guess there was no other way, since theoretically the U.S. government is broke and does not have the money to pay for its day to day finances.
Although some economists were saying that it is not right to cut the debt since we are in a recession and more spending cuts will further hurt a wobbly economy, but the economists does not seem to see that if not right now then when it is the right time. If they are expecting growth to ride out of this recession and spending more of the other people (read nation’s money) then the economists are wrong. Because the economy may take a long time to recover. Since economics is not an exact science and the economists have tended to be wrong on other occasions, why we should think they will be right this time too.