To review, the debt ceiling is a legal mechanism dating from 1917 that says the government can only borrow a certain amount. So when Congress passes a budget requiring some borrowing (which is almost every time), if the resulting debt would go beyond the ceiling, Congress has to pass an additional measure to raise it. It’s as if you had a credit card with a borrowing limit that you could set yourself.
If this sounds weird and stupid, that’s because it is. The debt ceiling is a completely pointless legal archaism. The only other country that has one is Denmark, but its government rendered it inoperative years ago by raising it far above where its debt is ever likely to reach. (It’s a sad demonstration of America’s political dysfunction that we can’t even manage this kind of elementary national housekeeping.)
Political dysfunction is defined as limiting the debt, rather than managing the tax/spend interface that leads to the debt.
It’s the snooze function on the national alarm clock. Wake up, people! Oh, all right then.
it is actually quite difficult to expalin just how stupid this idea actually is. But then I live in a country that still has to vote in income tax each year, because clearly there is still the remote possibility that we might have to fund an army to stand up to Napoleon
If you’re never even going to balance the budget in any meaningful sense (so huge deficits every year), then the national debt which is the year-on-year roll + interest is never going to go down.
Might as well say “The US Debt ceiling is 600 Trillion Gorillion”. When hyperinflation kicks in where that becomes a problem (a la Zimbabwe) then raising it another notch won’t make a damn either.
The US is basically monetizing the fact that it has the world’s reserve currency. Given how utterly fucked they would be if that changed, a war would not be out of the question.
Wonko: It’s a bit older than that. I’m just reading a biography/history of Edward I, and he had all sorts of problems raising funds for his wars. He had to keep calling parliaments to agree taxes, and that’s how it should be. If governments want money to blow on stupid stuff and even important stuff, they should ask nicely, and we should have the option of saying ‘piss off’. Sadly we have the pols in the way, rather than it being a plebiscite.
I remember a Bill Bryson article twenty odd years ago discussing ‘the $4 Trillion US National Debt – do you realise how much a trillion really is?’ To paraphrase his example: “If you moved a dollar bill from one pile to another at the rate of one per second, how long would it take you to get to $1 Trillion dollars?”
Answer was something < 32,000 years. "And you would just be one quarter of the way through the national debt"
It now stands at $30.93 Trillion…….
“the tax/spend interface”?!!!
What an idiot.
“It’s as if you had a credit card with a borrowing limit that you could set yourself.”
No it isn’t. Congress isn’t an individual. If the ruling faction wishes to borrow above the limit, then it has to ask the entire Congress for permission. It’s more like a credit card with a borrowing limit set by your family.
Of course, the entire “family” doesn’t seem to give a shit about getting even further into debt, but isn’t quite the same problem.