Non-political political question

It is worth noting that only one other country in the world … Denmark … has a debt ceiling like ours.

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You will have to correct NPR.

The debt ceiling may or may not be in with other measures but it is spent money already.

Let’s put it this way so that it is clearer. We just hit the debt limit. Now the idea is to lower the debt limit which is the debt ceiling by definition. Meaning we do not finance part of the debt. Money already spent. This means defaulting on our debt.

The other problem is if the debt limit/ceiling is not placed high enough this is revisited over and over again in quicker succession.

Again, that’s not really accurate.

First, no one is talking about lowering the debt ceiling. Rather, there’s a threatened stalemate over raising the debt ceiling. If the debt ceiling isn’t raised, then the Treasury will not be able to resume borrowing money.

This does not automatically mean defaulting on our debt. Instead, Congress has authorized a certain amount of spending for FY 2023 (about $6 trillion). We’re only expected to bring in a certain amount of revenue for FY 2023 (about $4 trillion). If Congress doesn’t act, then the government will not be able to spend as much money in FY 2023 as Congress had appropriated - they’ll only be able to spend about 2/3 of it. Government outlays will have to fall to match government inflows.

That’s not “spent money already.” It’s all the future spending on salaries and Medicare payments and bullet purchases and all the other spending that’s programmed for the back half of FY 2023 that the government won’t have enough money to actually spend. That spending just won’t be able to happen - there won’t be enough money in the government’s bank accounts to make the payments.

Now, that future spending also includes servicing the debt. But servicing the debt is only about 8-9% of the budget. The government brings in enough money every day (it doesn’t all come in on April 15) that if it could spend 100% of that money first on debt service, it theoretically could make those payments.

There are two reasons, though, that folks talk about failing to raise the debt ceiling leading to default on the debt. One is that the federal government doesn’t really have any accounting or administrative systems in place to prioritize debt service over other types of spending - they just pay their bills when they come due, and there’s nothing that lets them “check” before paying the monthly electric bill at the Dirksen Building that there’s enough money to pay interest on T-bills. The second is the claim that the Executive lacks the legal authority to prioritize payments like that. I think the first claim has a lot of merit, the second a little less so.

Either way, the debt ceiling isn’t about “spent money,” but money that is yet to be spent. That doesn’t make it any less catastrophic an issue if we run out of money in the federal treasury - but it’s probably worth keeping things accurate in talking about it.

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That is not reality based. You are speaking economics where you admit you have little to no education in econ.

The reason for the spending is an industrial policy. The only reason against raising the debt ceiling is to sabotage the US economy.

The industrial policy will pay for itself handsomely. Not this year but in many coming years. It has happened before in the 1950 to 1969 period.

In the 2016 to 2020 period the debt ceiling was raised three times with no arguments. Everyone fully supported it.

The only argument here is who gets the credit for making the US a global success. The last attempt with supply side econ no one wants the credit. Again people who refuse to know anything about economics.

I’ve never said anything of the sort - my degree is in economics, actually.

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Cool

Then do you want a capital policy for the US or an industrial policy?

Do you see the capital policy as failed for the last 30 out of 40 years with slow GDP growth for the entire period? Or do you think growing our industrial base is a good or bad idea?

Do you think being cheap is the policy that will grow our industrial base?

Or is being cheap an act of sabotage?

The debt limit is on already passed legislation stating it more accurately. We understand sabotage is wanted. It is hateful. It is in there always with white males first instead of all of us being American citizens. It is repugnant to most of us and it is sabotage.

Or do you see an outcome that is better? Is spending less money going to have a better outcomes? And specifically how in growing our industrial base?

Not how because idiots watch fox news.

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I do not agree with the economic policy of the Freedom Caucus. But I also want to respect the “No Politics on METAR” rule, which is why I directed my comments to the mechanics of the debt ceiling, rather than the merits of austerity policy generally.

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Just got through saying there can be smart debt building out our industrial base. There has been some $27 trillion of dumb debt with supply side econ outsourcing our industrial base. The remainder is Covid give or take $4 trillion.

We need smart debt and we are getting just that with the IRA.