# Debt Ceiling: Please Explain **URL:** \ **Category:** Factual Questions\ **Created:** [July 14, 2011, 2:52pm UTC](https://boards.straightdope.com/t/debt-ceiling-please-explain/589017 "2011-07-14T14:52:31Z")\ **Posts on this page:** 12\ **Page:** 3
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [July 15, 2011, 4:32pm UTC](https://boards.straightdope.com/t/debt-ceiling-please-explain/589017/41 "2011-07-15T16:32:25Z")
> [@USCDiver](#): > > FYI: I’m pretty sure that graph has the Senate party in control colors reversed Actually, I think the Senate is right (still controlled by the Dems and has been since 2006). It’s the House that is backwards. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [July 15, 2011, 4:47pm UTC](https://boards.straightdope.com/t/debt-ceiling-please-explain/589017/42 "2011-07-15T16:47:13Z")
> [@Exapno\_Mapcase](#): > > Why Congress doesn’t raise the debt ceiling by $100 trillion at one time so that they never have to vote on it again in their lifetimes is a different question that I’ve never seen answered. [It just did!](http://unconfirmedsources.com/?itemid=6143) Don’t you guys keep up with the latest news? ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [July 15, 2011, 4:57pm UTC](https://boards.straightdope.com/t/debt-ceiling-please-explain/589017/43 "2011-07-15T16:57:27Z")
> [@septimus](#): > > [It just did!](http://unconfirmedsources.com/?itemid=6143) Don’t you guys keep up with the latest news? To save everybody time, that’s a humor site. ---
**Author:** ![furt](https://avatars.discourse-cdn.com/v4/letter/f/439d5e/32.png) [@furt](https://boards.straightdope.com/u/furt)\ **Post date:** [July 15, 2011, 6:15pm UTC](https://boards.straightdope.com/t/debt-ceiling-please-explain/589017/44 "2011-07-15T18:15:29Z")
> [@Sunspace](#): > > [This Globe and Mail opinion piece](http://www.theglobeandmail.com/news/politics/second-reading/andrew-steele/the-united-states-and-obama-hit-the-ceiling/article2097325/) says that a failure to raise the debt ceiling would essentially result in an erosion of trust in the US’ financial securities, causing higher interest costs. I’m not sure what point you’re making here. Yes, failing to raise the debt ceiling in this immediate moment would lead to many bad things. That’s not in dispute. But long-term, we can say our debt ceiling is eleventy quadzillion dollars; that doesn’t mean people will actually lend us the money. Greece’s parliament can set their “debt ceiling” at whatever they like, but it’s irrelevant – people won’t lend to them, or only at very high rates. That’s the _real_ debt limit. We don’t want to wind up like that. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [July 15, 2011, 7:36pm UTC](https://boards.straightdope.com/t/debt-ceiling-please-explain/589017/45 "2011-07-15T19:36:09Z")
The way a government, or most organizations work, moneywise: The people authorized to allow expenditures (for the USA, congress. For a club or company, the board.) pass a budget. This permits the executive (pres) to spend money. In the case of a government, they also pass laws allowing taxes and other reveneue generation. No money can be raised or spent without this authoriation. Any expenditures/revenues outside these need special bills/laws/taxes passed in addition to the regular budget. Since nobody can predict to the penny what needs to be spent, the budgets may include guidelines. Also, nobody can operate just from year to year, so congress can also authorize multi-year and open-ended financial commitments. Many of these, like Medicare, can also be unpredictably erratic (or just plain keep going up). Revenue, likewise, is just an estimate. Taxes may not come in at what the government predicts. The trouble with anyone allowed to spend whatever they want, and borrow to cover shortfalls, is that the temptation is there to spend more and promise to pay it back later. (“The diet starts tomorrow.”) At this point, the US government spends about 50% more than it takes in. Partly, that’s because since fall 2008 the economy has been in the toilet. Partly, it’s a systemic problem - all the issues above - wars, .com crash, 9/11, mortgages - all cost more than expected and came home to roost in an 8-year time frame (oddly enough). Others hav been decades in the making - Social Security, Medicare, military, infrastructure deficit, etc. The USA has this peculiar added extra, that congress must also approve extra borrowing, even though they have approved the taxes and spending that resulted in the need to borrow. One presumes the ability to borrow is implicit in the right to spend and not tax enough, but nobody has asked the Supreme Court if this is so. (There is a rumbling lately that the constitution allows such borrowing in the clause “the debt of the United States shall bot be questioned”, which suggests that the law cannot restrict the government; if money is owed, the government must pay it back on schedule. ) Think of it this way - it’s like a household that has overcommitted, has more mortgage and car payments (and minimum credit card payments) and such that its income can support. The household has calculated that when their next few annual raises come in, by 4 years from now, they will be able to start paying down all their debt and honest, in 20 years they’ll be debt free. But for now, they need to get yet another credit card and max it out to make their payments and buy groceries. Instead of getting one big line of credit, the wife (Mrs. Congress) limits Papa Obama to one $5,000 new credit card at a time… and makes him beg for it… And won’t let him go to his boss and demand a pay raise… ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [July 15, 2011, 8:28pm UTC](https://boards.straightdope.com/t/debt-ceiling-please-explain/589017/46 "2011-07-15T20:28:44Z")
Warning for readers: there are several glaring inaccuracies in the post above… so many that it isn’t worth responding to point-by-point. Take that post with a large grain of salt. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [July 15, 2011, 11:49pm UTC](https://boards.straightdope.com/t/debt-ceiling-please-explain/589017/47 "2011-07-15T23:49:22Z")
> [@Ravenman](#): > > Warning for readers: there are several glaring inaccuracies in the post above… so many that it isn’t worth responding to point-by-point. Take that post with a large grain of salt. Generally true for any and all posts by that poster, BTW. ---
**Author:** ![Gary\_Robson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gary_robson/32/3448_2.png) [@Gary\_Robson](https://boards.straightdope.com/u/Gary_Robson)\ **Post date:** [July 16, 2011, 1:04am UTC](https://boards.straightdope.com/t/debt-ceiling-please-explain/589017/48 "2011-07-16T01:04:07Z")
> [@Exapno\_Mapcase](#): > > Generally true for any and all posts by that poster, BTW. [mod note] Don’t do this in GQ, **Exapno Mapcase**. You know the rules: attack the post, not the poster. [/mod note] ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [July 16, 2011, 4:19pm UTC](https://boards.straightdope.com/t/debt-ceiling-please-explain/589017/49 "2011-07-16T16:19:29Z")
> [@Wheelz](#): > > Can someone please tell me how this makes any sense at all? If I’m about to default on a bank loan, can I raise my debt ceiling so that I can put off paying the bank back, and in fact borrow even more? I didn’t think so. How can a country do it? Unlike Greece, the USA is not defaulting because of not being able to pay their loans as they come due. The finances of the US government are such that it will take many years of what the government does right now, before they reach the point where tax revenues do not cover government “living expenses” and debt payments. Plus, ultimately the government, unlike the Greeks in the Euro Zone or unlike the states in the USA, can print money. It can simply say “there are X trillion dollars more in the bank”. Now, if civil servants could show up in stores with piles of dollar bills and we didn’t have to pay any taxes, what value would a dollar bill have within a few months? Congress and Obama are in a tiff over whether congress will let Obama borow more money; since in the last dozen years the government has spent substantially more than it has taken in, and so need to actually borrow more money from time to time to cover this. The world is happy to lend the USA more money despite their overspending. It’s a game of chicken. The government cannot run without the money. See [File:Fy2010 spending by category.jpg - Wikipedia](http://en.wikipedia.org/wiki/File:Fy2010_spending_by_category.jpg) and consider to balance the budget today, you cut out 1/3 of that pie. Cannot be done without destroying the economy. The republicans (or the radical ones) would like to make Obama look bad, by saying “see - we saved the citizenry from Obama’s overspending”. Obama is trying to do what Clinton did, and if the congress does not back down, they will (he hopes) be blamed when every social security cheque is late and every civil servant, soldier, and Medicare doctor does not get paid, passports don’t get issued, various licenses and inspections don’t get done, etc. Eventually, one side or the other will back down or compromise, the permission to borrow will pass, and the government will carry on and if necessary, spend even more to clean up the damage done. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [July 16, 2011, 4:22pm UTC](https://boards.straightdope.com/t/debt-ceiling-please-explain/589017/50 "2011-07-16T16:22:03Z")
> [@Ravenman](#): > > Warning for readers: there are several glaring inaccuracies in the post above… so many that it isn’t worth responding to point-by-point. Take that post with a large grain of salt. Ya. I’ve grossly oversimplified. Whole books can be written (and have) on the details of economics, constitutional law, the authority to borrow and spend, long term government committments, the deficit, and any other topic touched upon in this thread. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [July 16, 2011, 6:36pm UTC](https://boards.straightdope.com/t/debt-ceiling-please-explain/589017/51 "2011-07-16T18:36:14Z")
> [@md2000](#): > > Ya. I’ve grossly oversimplified. Simplification is one thing. Fundamentally getting facts wrong and not even being in the ballpark is another. For example, the US cannot “print more money” in order to finance government spending. You aren’t even close to relating a fact here. I know you’re trying to be helpful, but you are posting things that are simply wrong. ---
**Author:** ![YogSothoth](https://avatars.discourse-cdn.com/v4/letter/y/8edcca/32.png) [@YogSothoth](https://boards.straightdope.com/u/YogSothoth)\ **Post date:** [July 16, 2011, 6:39pm UTC](https://boards.straightdope.com/t/debt-ceiling-please-explain/589017/52 "2011-07-16T18:39:08Z")
I’ve always thought of questions like this in a very simple way: Countries are not people [Previous page](https://boards.straightdope.com/t/debt-ceiling-please-explain/589017.md?page=2)