As anyone who has read this blog on a regular basis knows, I am in no way a “Chicken Little” liberal. I tend to be what Stephanie Miller refers to as a. “Happy Clappy” liberal because I tend to take a bit of an optimistic outlook on most things and I have no regard for those who believe cynicism is a sign of intelligence because it’s not. Pronouncements of gloom and doom are not my style.
There is one exception, however, and that is the full faith and credit of the United States Treasury. that is why one thing I may seem a bit gloomy about is the debt ceiling. First of all, the fact that we have a debt ceiling is kind of stupid. However, the fact that we’ve had one for many years and it’s only become a political football under modern Republican rule points to a serious problem. You see, the prospect of failing to raise the debt ceiling is one of the most dangerous things the Republican Party keeps doing to us. And now, for what has to be at least the tenth time in the last decade or so, the GOP is threatening to refuse to raise it. What that would mean would be a default on our national debt. If you imagine that’s no big deal, then you are in for a bit of a shock at the end of the fiscal year, which is September 30.
The man-child in the White House has already suggested not raising the debt ceiling. Yesterday, he actually suggested attaching it to a “popular” VA bill so as to get around the Democrats “holding it up.”
I requested that Mitch M & Paul R tie the Debt Ceiling legislation into the popular V.A. Bill (which just passed) for easy approval. They…
— Donald J. Trump (@realDonaldTrump) August 24, 2017
…didn't do it so now we have a big deal with Dems holding them up (as usual) on Debt Ceiling approval. Could have been so easy-now a mess!
— Donald J. Trump (@realDonaldTrump) August 24, 2017
Not only has there never been a time on record when Democrats held up a debt ceiling increase, but every single debt ceiling hostage situation and every government shutdown ha been carefully crafted by Republicans, based on a series of lies about what the debt ceiling means in the first place. This is something that has been going on for a while now and these cynical attempts by Republicans to make their brain-dead minions believe the debt ceiling has something to do with the budget and current government spending have had the effect of making people panic over something that should simply be common sense. Worse, however, it has made many others not realize that the full faith and credit of the United States was important enough to protect in the Constitution. The fact that Republicans who should know better, like the goddamn “president” think this is something that is optional, is truly frightening.
A couple years ago, I wrote about Ben Carson, as he was running for president. He was asked about the debt ceiling on Marketplace, in an interview by Kari Ryssdal, and it was truly frightening. What was more frightening than the answers was the fact that what he said was and still is Republican orthodoxy. Here is the Interview in full. Listen to this and tell me how this shouldn’t disqualify him from any government office. Then consider, as dumb as Carson is, Lord Donny is actually dumber. Here is the key exchange in this interview:
Ryssdal: All right, so let’s talk about debt then and the budget. As you know, Treasury Secretary Lew has come out in the last couple of days and said, “We’re gonna run out of money, we’re gonna run out of borrowing authority, on the fifth of November.” Should the Congress then and the president not raise the debt limit? Should we default on our debt?
Carson: Let me put it this way: if I were the president, I would not sign an increased budget. Absolutely would not do it. They would have to find a place to cut.
Ryssdal: To be clear, it’s increasing the debt limit, not the budget, but I want to make sure I understand you. You’d let the United States default rather than raise the debt limit.
Carson: No, I would provide the kind of leadership that says, “Get on the stick guys, and stop messing around, and cut where you need to cut, because we’re not raising any spending limits, period.”
Ryssdal: I’m gonna try one more time, sir. This is debt that’s already obligated. Would you not favor increasing the debt limit to pay the debts already incurred?
Carson: What I’m saying is what we have to do is restructure the way that we create debt. I mean if we continue along this, where does it stop? It never stops. You’re always gonna ask the same question every year. And we’re just gonna keep going down that pathway. That’s one of the things I think that the people are tired of.
Remember when we used to only elect the best and the brightest? That notion seems relatively quaint, honestly. Now, we have an idiot in the White House who thinks he can convince us he’s the greatest president ever and the genius above is now in his Cabinet, as HUD Secretary. If that’s not bad enough, the “Freedom Caucus” (a more polite name teabagger in Congress gave themselves a few years back because they hated that we called them teabaggers) make up about half of the Republican Caucus in Congress and they are still too stupid to even read up on the debt ceiling and what it means. It means we could very well be doomed by the current incarnation of the Republican Party in charge.
First of all, the debt ceiling has nothing to do with the debt. However, the way the GOP frames it, it feeds into the false narrative that the United States is somehow “broke.” This is the ridiculous notion that has energized the Republican “base” for almost 40 years. This is the richest nation on the planet; we’re not even close to broke. As a nation, there is plenty of wealth; enough to build out every road and fully finance every school. There is enough to feed and shelter every single person in this country and more than enough to guarantee quality healthcare for everyone within our borders. The problem we have is a major political party that is trying to push the narrative that the government is spending too much money and the only way to solve that problem is to “starve the beast.” Look more closely; the only part of this society that seems “broke” is the government, and that is by purposeful design. The Republican Party has to sell lower taxes and the only way to do that is to be misers and skinflints. Never mind that the poor pay more of their income in taxes than the rich these days, which is truly deplorable; the reason we have to keep raising the debt ceiling is because Republicans refuse to increase taxes on those who can afford to pay. Perhaps ironically, it’s the Republicans’ fault we have to borrow so much just to operate as a skinflint nation.
The debt limit is a self-imposed limit on the authority of Congress and the Treasury to pay our bills. Failing to raise the debt ceiling would have a massively negative effect on all of us, even on the short term. In part, this is because our economic system is not based on cash, it’s based on confidence that cash will flow. Think about it; if you make $50,000 a year, you don’t get that in one lump sum on January 1. The money coms in throughout the year. The same is true of tax revenue. In order to pay our bills as we go, the government has to borrow money in April in anticipation of the revenue they won’t see until December. It’s the same reason most people use credit. Republicans are like the person who buys a Mercedes when he’s laid off. Think about it.
The debt ceiling has nothing to do with the current debt or deficits. It is about paying interest to those who lend us money and it has to do with paying the bills we have already run up. Failing to raise the debt ceiling would create a default, which has the potential to cause a depression, which, for the record, is far worse than the recession we went through in 2008, the last time Republicans lied to us on economic matters.
For the record, the debt ceiling is NOT a “credit limit,” which implies there’s a limit on how much people are willing to lend us. Such a limit is not apparent at all. Most people want to buy Treasury bills, and our debt to income ratio, as a country, is rather good; in fact, it’s probably better than most families, if you want to compare them. That means, there is no credit limit, and won’t be for some time. The debt limit is entirely self-imposed, whereas a credit limit is imposed by others. If our government decides to not pay our bills, even for an hour, that choice will create uncertainty. In turn, that uncertainty will have a devastating effect on the world economy. Worse, it will have a negative effect on your personal economy, especially in the wake of having elected a lunatic to lead this country and having caused the last major recession in the world. Right now, most of the world’s bills are paid in dollars because ours is the most stable currency, but failure to pay our bills will shrink the value of the dollar overnight, and several other currencies could be in peril.
Most of the world’s wealth is in the form of promises, and the value is based on confidence. You buy a home on a 30-year mortgage based on a promise that the value of the home will not crash during that 30-year period. The bank lends you that money, based on a promise that you’ll pay that money back, plus interest. The bank is able to make that loan to you because there is a mortgage aftermarket, and that aftermarket can only be trusted if it is regulated. Likewise, banks can only afford to make loans because the federal government has set up insurance that guarantees most deposits. The entire economic process is dependent on governments setting up systems that reduce investment risk and create confidence. The mortgage meltdown was devastating to the world economy not because it was a loss of cash, but because of the lost confidence. Economies around the world depend on the power of the US dollar to keep them afloat, and we let them down.
We still aren’t all the way back from that, thanks to the Obstructionist Republicans, who stopped virtually every piece of legislation needed to create a solid recovery. To compound that by repeatedly bringing us to the brink of default is as irresponsible as it gets. When Standard & Poor’s reduced our credit rating a few years ago, they didn’t blame President Obama, they placed the blame squarely on Republicans in Congress, because the debt ceiling is their responsibility.
It’s not a big deal that the average idiot in the Republican “base” doesn’t understand the concept of a debt ceiling — I’m surprised many of them can feed themselves — but for Republican politicians who want to run the government to not understand the debt ceiling is inexcusable. There should be no debt ceiling at all, but since it does exist, it has to be used responsibly.
Stop electing Republicans, and our economic stress level will be reduced significantly.
Also published on Medium.