I don’t understand why this is a good thing. We are trillions of dollars in debt already.
Dosen’t this just prove that ALLpoliticians suck ?
Politicians have done what the voters elected them to do. Don’t blame them for doing their jobs.
The People want a lot of great stuff and they don’t want to pay for it. How to reconcile that without borrowing?
The US has made obligations (promises) of money, to our own people and to other parties. We are an honorable country (I hope!), and we must meet our obligations and keep our promises. The debt limit is not about spending more money, it’s about money already spent. It’s pure political theater- if Congress doesn’t want to increase the debt, then Congress should spend less money.
Look at it this way- the only way we don’t need to have the debt ceiling raised is to have a balanced budget (or a surplus). The last time we had a surplus, the Republicans recoiled in horror, declared that the surplus belonged to us (apparently debts have no ownership) and embarked on a plan of slashing taxes for the rich and starting two unnecessary wars and creating a new Medicare entitlement.
Raising debt limits is not about raising the debt, it’s about paying for the stuff we already spent.
It seems to me that when congress passes (or fails to change) current tax law and passes spending bills, the limit is implied and raising the limit it should be a part of the spending bill. In fact, I heard one (partison commentator) assert that is how the bulk of the debt ceiling increases have been done.
Does any other country have that sort of disconnect between revenue, spending and then an independently decided debt limit?
I know nobody’s a fan of simplifying the economy to a household budget, but pretend you can’t make rent one month. You go to your brother and ask for $200 to cover your budget shortage, and he happily complies. This goes on, month after month, until you’re $14,800 in debt to your brother. To his credit, he doesn’t say a word about it, but you feel sick to your stomach. “That’s it,” you say, “I’m not going over $15,000 in debt to him,” and you pinky-swear with yourself.
But you change nothing about your budget and at the end of the month, you’re left with a choice – break your promise to yourself, or borrow the money and pay what you owe.
It’d be pretty dumb in that situation to get evicted before having your budget sorted out. What you should do is borrow the money, pay your landlord and THEN figure out how to pay off your debt. And yeah, congress sucks at doing that last part, but that’s a separate issue.
What I don’t understand is why so many people cannot understand what the debt limit is. If I use my credit card, I can’t say at the end of the month that I’m not going to pay it. As DigitalC says, the debt limit is about paying for debts already incurred.
It makes me wonder if certain ‘news’ sources are explaining it, or if they are explaining it wrong.
The part that the pinky-swear is with yourself is a key point in this analogy. It’s Congress that sets the debt ceiling, and it’s also Congress that sets spending and tax levels. If they want to reduce the deficit, they can. In fact, they’re the only ones who can. When they proclaim loudly that they want to reduce the deficit, but then they don’t, just what does that mean?
It means the GOP are liars
stosh, as others have already pointed out, raising the debt limit is so that the US can pay debts it has already incurred. To not pay those debts would be catastrophic. In the 90s, Argentina defaulted on its debt and they experienced 100% inflation within a week. Entire families saw their savings wiped out in no time.
The US economy is much larger and more important to the world economy than Argentina’s was at the time of its default. No one really knows what would happen if the US defaulted because it would be unprecedented, but it would certainly be disruptive to the world’s economy.
I’m not aware of anything similar in the Westminster parliamentary systems. The government’s annual budget deals with both revenue and spending. If there’s a deficit in the budget, it includes authority to borrow to make up the deficit.
If the government can’t get its budget passed by Parliament, that’s a clear sign of non-confidence, resulting in immediate elections.
So to review, the action to raise the debt limit didn’t incur any debt at all but merely affirmed our intent to pay the national debt. The effects of refusing to pay our debt would have been catastrophic since the world financial system is based upon the belief that money lent to the US Treasury is perfectly and absolutely safe. So the choice this week for Congresscritters was pretty simple: take responsibility for our spending or wreck financial havoc upon the world. Most Republicans in Congress voted for chaos. (Though it should be noted that the 18 Senate Republicans who voted against could have used procedural tactics to stall the bill until at least today and thus push the country into default but refrained from doing so.)