Okay ladies grab your bloomers…..the debt theater is set to begin…we will hear all about spending, debt ceiling and anything else they care to throw at the cameras…….we will hear person after person on the Tube tell us all about how crappy the other side’s position is……and we will pick our sides by what our fav commentator has to say on the subject…….

But before we do that…..do you know what the debt ceiling is?

Once a little-known aspect of the U.S. government’s fiscal management process, the debt ceiling exploded into the public consciousness following the intense debate that took place in the summer of 2011. As its name would suggest, the debt limit is simply the maximum amount that the U.S. government can borrow at any given time. Currently, the limit is set at $16.394 trillion. Each year, the government spends more than it takes in, and this gap must be funded with debt, or more specifically, bonds issued by the Treasury. By law, however, the Treasury can’t issue new debt once the country is at its borrowing limit – and this limit, or ceiling, needs to be agreed to by Congress.

The debt limit doesn’t authorize new spending; instead, it provides the funding to pay for spending commitments that Congress has already made. Since the Treasury can’t issue new debt once the limit has been reached, the government would be forced to slash spending if it exceeds the borrowing limit. The result would be a partial government “shutdown” and a debt default (or the failure to make interest and/or principal payments on time).

Let me emphasize one point…….

The debt limit doesn’t authorize new spending; instead, it provides the funding to pay for spending commitments that Congress has already made….have you got this?

Just thought I would help you understand the debt ceiling issue before it becomes an endless stream of one liners, and sound bites…….

Personally, I do not see the need for the debt ceiling…..I mean since it has been around it has NOT done anything to curb spending….and that is a whole other post……but to tie debt ceiling to spending talks is just a political game…….and all it will do is give the media something to fixate over for a couple of months and in the end…….after all the drama they will kick it down the road (damn…I hate that term….but in this case sums up the antics really well)……and we will await the next round of total lack of seriousness by our politicians…….makes me proud.