Every few years, the United States rubs up against its mythical “debt ceiling,” a number which must be approved by the Congress to enable the Treasury to use debt to pay our national bills and conducts a ritualistic charade of acting like fiscally responsible adults — a bloody Kabuki dance.
Speaker of the House Nancy Pelosi and Majority Leader Chuck Schumer discussing the debt ceiling in costume of Japanese Kabuki dancers.
The debt ceiling is the maximum amount of money the US Treasury has authority to borrow in the form of bond sales.
As you know, the US government runs at a horrific deficit to its revenue (funded by bond sales), a deficit exacerbated by the China Virus extraordinary costs, the ailing economy, the impact of inflation, and a spate of give away programs approved under that same coloration.
In other times, we would call this “bad policy.”
It, the debt ceiling, is exactly like a credit card limit taken to its simplest derivation.
History of the debt ceiling
The mythical debt ceiling was first enacted in 1917. It came into play about 1960 and has been increased or suspended by Presidents and Congresses of both parties 78 times. Yawn. Sorry.
President Roosevelt spent a lot of $$$ on World War II and the Great Depression — huge percentage, small dollars.
Woodrow Wilson had World War I — same song, second verse.
Ronald Reagan turned the tap on defense, lowered tax revenues through tax cuts, and waited for it to trickle down.
George W Bush had the helm during the War on Terror and invaded two countries which is always expensive. Two of the stupidest individual decisions ever made by a President in US history. I used to like the guy.
Barack Obama had the faux Great Recession fight, the Great Porkulus, and increased the national debt by the most dollars in absolute terms — meaning he increased the national debt by $8,600,000,000,000. He also raised taxes by almost $1,000,000,000,000.
That’s TRILLIONS, dear reader.
Donald Trump is the 10th largest debt increaser (in percentage terms, mind you) at 33% and $6,700,000,000,000. More than $3,000,000,000,000 of Don’s deficit came in his last year of governance whilst dealing with the China Virus.
To put this into perspective, our current POTUS Joe Biden (a scrappy, not overly bright kid from Scranton) is already on tap for a first year deficit of $3,000,000,000,000 (now, now — China Virus, y’all) and is proposing legislation that will add $6,000,000,000,000 more plus he has a baseline deficit of about $3,000,000,000,000. We could be looking at as much as $18,000,000,000 in deficit spending in four years of Scrappy Joe. Hello, America!
Right now, Cool Hand Joe is on pace to dwarf the whole bunch of prior Presidents.
What, Big Red Car?
Technically, the debt ceiling is currently “suspended” as we engage in an orgy of irresponsible debt funded spending that began in the Trump admin — China Virus — and has continued unabated since.
When asked, “Why does the US have a debt ceiling, Big Red Car?” the response is, with a chuckle, “To restrain profligate Federal spending and to force the government to operate within its means.”
Please stop laughing. Get a cup of coffee and make an appointment for a deep tissue massage.
Are we going to default, Big Red Car?
No, of course not. That’s why I call it a Kabuki dance, a stylized depiction of real life danced in a dramatic fashion whilst wearing elaborate costumes, hair styles, and makeup. Sort of like a Debutante Party?
So, will we have a default? No. Not a bloody chance in the world.
But, why do we have a debt ceiling?
Good question. Honestly, there is no reason why we go through this nonsense. See the prior answer to this question.
Each party uses it as a bludgeon to create perceived election advantages, to embarrass the other party, and to generally piss on the leg of their opponents.
What does everybody say about the debt ceiling?
Well, dear reader, the Dems plead that they are simply paying for programs committed to by prior administrations and the evil Donald Trump.
It’s Trump’s fault?
The Dems ignore their own level of spending — more than $6,000,000,000,000 in two impending infrastructure spending bills — come on, Dems. Own it.
Look, a well known Dem, Barack Obama, added more to the national debt than any other President in history. Come on, man.
The Reps say they are just innocently watching from the sidelines as the Dems control the House, the Senate, and the White House.
Evil Mitch says, “Hey, we’re not in the game. This is the Dems.”
“Hey, who farted? Wasn’t us. That’s a Pelosi boomer if ever I smelt one. I can recognize gourmet ice cream when I smell it.”
Janet Yellen, Sec of Treasury and manager of spending, says the world will end, the stock market will crash, the birds will not migrate, and the rivers will reverse their flow if she doesn’t get carte blanche debt ceiling relief pretty damn lickety split.
[Haha, she will. Calm the Hell down Janet.]
Bottom line it, Big Red Car
Dear reader, enjoy the dance, the drama, the hairdos, the makeup, the costumes — it is a freaking Kabuki dance.
The debt ceiling will be raised (or, alternatively, eliminated) and all will be fine.
Be well and don’t fret. We have seen this series episode before on Billions.
Post debt ceiling relief party at Joe Biden’s beach house in Rehoboth Beach, Maryland, after Nancy and Chuck deliver the literally miraculous win. Notice — no masks.