We hear it everyday now….the “Debt Ceiling”….but what is it?
James Hamilton put it well back in 2006:
One of the peculiar embarrassments of the American political process is the fact that Congress votes separately on the deficit and debt, as if they were two different decisions…
If the government is (a) required by the deficit legislation to spend, and (b) precluded by the debt legislation from borrowing, the Treasury would be forced into default. The greater the likelihood markets attach to such an event, the higher will be the interest rate the government has to pay on Treasury debt. A politician who votes for the spending and tax measures that produced the deficit but against a debt ceiling consistent with these is deliberately wasting taxpayer dollars for no purpose other than to grandstand before voters as a “fiscal conservative”. Anyone playing such a game has complete contempt for the intelligence of their constituents.
We are bombarded every day with this politician or that about the national debt and why we need to raise or ignore the ceiling……some say screw it! Let the government shutdown…..others say we need to protect the nation and our credit rating in the world….and others just do not seem to care……but what is the story behind each of these positions?
From Rep. Michelle Bachmann……darling of the Tea Party….
With the national debt at $14 trillion and counting, Congress’ spending frenzy cannot continue.It’s time to force our elected officials to stop spending cold turkey, and we can start by making sure they do not raise the debt ceiling.
That’s why I’m asking you to personally tell Congress not to increase the amount of money the government can borrow by signing your name to the “Don’t Raise the Debt Ceiling” petition. To date, we’ve collected over 75,000 signatures for this petition. But I know we can collect more. So I’m challenging conservative activists to collect an additional 50,000 signatures in the next week. Will you help me reach this goal?
The President’s front man on this is Austan Goolsbee….
Austan Goolsbee, chairman of the U.S. Council of Economic Advisers, said if Congress fails to raise the debt ceiling, the “impact on the economy would be catastrophic.”
“I don’t see why anybody’s playing chicken with the debt ceiling,” Goolsbee said today on ABC’s “This Week” program. “If we get to the point where we damage the full faith and credit of the United States, that would be the first default in history caused purely by insanity.”
There are two options…..increase it or not…if it is NOT then the government will showdown…is that a good thing to do just to make a point? It was done in the 1990’s when Newt and the boyz were there in the House….a mini revolution if you will……but is it a good idea?
- Shutdowns actually cost the government more money ($800 million last time according to Time) than it would otherwise spend and, therefore, increase the deficit compared to what it otherwise would be. Departments and agencies have to begin to implement shutdown plans within a few days of the possibility that their appropriations might expire. At a minimum, this involves additional communications security, building maintenance needs.
- The last shutdowns taught us the definition of “essential services” because of a ruling by the attorney general that, even if no appropriation had been enacted, the government may continue to do whatever this might be. But there’s no agreed-upon list of what is “essential” and last time the definition seemed to change as the shutdowns continued.
Will the government shut down? Doubtful….sadly all this is just another political game that the mindless twits are playing…..they are trying to intimidate…..the use of threats……Keep in mind that the deficit and the debt are NOT necessarily the same thing, although ALL spending is interconnected…….Nothing about this will create a job….and if memory serves me right……that was the promise of the GOP….to create jobs…not to continue the play these political games…..
Just how many of you, out there, think that this is a good direction for the government to travel?
Yes, well… Good post…
Of course. if they were capable of, or interested in, applying common sense, then there would be some point in all the discussion. As it is, the whole thing is a joke and they make themselves look more stupid by the day to the public and to the world, but that doesn’t seem to bother them.
Arguing about these figures is just plain silly. I know we live in a “live now, pay later” culture, but does America REALLY think that later will never come? You CANNOT go on deficit spending as you do – sooner or later it WILL all come crashing down. However, just cutting randomly will achieve nothing except ultimate rebellion (real, fiscal, or electoral) by ordinary people.
But then again, this is the EXACT result that should be expected when the whole of your political system is ruled by special interests who have (at the very LEAST indirectly) bought and paid for your elected representatives before they even take office.
I’m sorry, Chuq – I really don’t mean to be rude. But the fact is that your political/electoral system is just a joke – to put it nicely…
Quin, no offense taken….I too have been saying that for 30 years……if it were not so tragic it would be humorous…….and yet the people see the stupidity and yet continue to believe it will change……..it seems to be about winning NEVER about ideology or ideals or principles or whatever you would like to call it…..
The only thing this red wave has done is try to look busy. Kinda like a kid that moves his food around on the plate to look like he is eating. The goal is never met, promises never kept, oh but look at all of the good weve been trying to do. Ha! Childish antics from adults and elected officials.
Oh so well put!
to resist an effort to raise the federal debt ceiling calling instead for spending cuts that would keep the budget within the current debt limit. But the Obama administration says exceeding the debt limit — the result of failing to raise the ceiling — would be disastrous. The impact on the economy would be catastrophic Austan Goolsbee the chair of the White House Council of Economic Advisers on ABC News This Week. I mean that would be a worse financial economic crisis than anything we saw in 2008. .
Hi Sally and thanx for the visit…..why is it that NO one wants to talk about the massive give-away to the rich…..no they prefer to blame the nickle and dime programs like NPR or Planned Parenthood or ….well pick one………at what point will ALL be asked to sacrifice….well to answer my own question….NOT IN MY LIFETIME! Why? American stupidity!