debt ceiling.

debt ceiling.
the u.s. hit its debt ceiling on january 19. the nyt says the effects of hitting the ceiling probably won’t be immediately felt, but will set up a major political battle with potential economic consequences
  • the debt ceiling is the gvt-decided limit on how much the federal gvt can borrow
  • republicans said they wouldn’t raise the debt limit until biden promised to lower federal spending
  • biden said that congress should approve the debt ceiling bc it would allow gvt spending that congress already approved
we’ve seen gvt shutdowns before, says vox, and they’re becoming more common as congress becomes more polarized
  • every year, the gvt decides how to spend their money on october 1. but they don’t always do that. when a budget isn’t passed, the gvt can’t spend money
  • which means people don’t get paid and sometimes still have to go into work
  • with a more polarized gvt, fewer agreements are being made
  • lawmakers use the shutdown as a political bargaining chip
  • so they’re hesitant to approve a 2019 bill that would put an end to gvt shutdowns
hot air said biden’s reckless spending is to blame for the debt ceiling crisis: democrats need to offer concessions to the gop to get the national debt under control
  • mccarthy and biden need to make a deal w/ one another. hitting the debt ceiling makes immediate problems for the nation. but running up the national debt is dangerous in the long term, too
  • mccarthy can’t just give in to biden’s demands. republicans still hold the house, even if it’s by a thin majority
  • democrats’ spending is to blame for the debt ceiling crisis. they should be willing to make concessions to the gop
cnn op: no way! republicans weaponize the debt limit. the radical gop politicians who resist raising the debt limit unfairly push the country into economic turmoil
  • the battle of raising the debt limit is the result of polarized republicans who are willing to put their politics above the health of the nation
  • the longer congress refuses to lift the debt ceiling, the more likely the u.s. will be forced to default on its debt, which would be a complete disaster
  • debating about gvt debt is a part of a healthy democracy. but forcing a disaster in order to get your party’s way is shameful
wsj ed board: well, *someone* has to blink. no one in the government really wants a debt ceiling crisis. the gop needs to share specific goals for how they want government spending to change
  • republicans do have a point. reckless gvt spending has gone too far
  • but the gop doesn’t have much leverage in the debt ceiling standoff bc republicans hold the house by such a slim majority, and maintaining a gop majority stance on debt limit negotiations will be tough
  • the worst-case scenario is that the democrats won’t bend to the gop’s demands months after hitting the debt ceiling, making the standoff a big nothingburger
but fox news says raising the ceiling doesn’t address the root of the problem -- our growing national debt
  • the debt crisis is coming at the same time as senators are trying to pass biden’s infrastructure bill
  • despite mcconnell claiming he wasn’t going to entertain any ideas of raising the debt ceiling, he’s been talking w/ the senate majority leader to avoid a debt crisis
  • even though mcconnell is giving in to the pressure of raising the debt ceiling, he’s doing the nation a disservice by not addressing the rising amount of debt
the new republic still thinks the debt ceiling is stupid and dangerous. most nations don’t even have them, and they just offer politicians a soapbox
  • congressmen often use the debt ceiling as an excuse to make speeches ostracizing the other party for their spending
  • hitting the debt ceiling could cause a global recession
  • but members of the gop just want to use the debt ceiling as a bargaining chip
in fact, writes thewellnews.com, some people think the gvt could get more done without the debt ceiling. 84% of economists surveyed think that the gvt could spur more economic growth without it
  • supporters of the debt ceiling say that it keeps gvt spending in check
  • but some economists don’t agree. they see the ceiling as a needless political roadblock
  • others think congress’ spending is the problem, not the debt ceiling
the new republic also said allowing the gvt to hit the debt ceiling goes against the spirit of the constitution: the framers never intended for a debt ceiling showdown to keep happening
  • in the federalist papers, alexander hamilton wrote that the purpose of giving the gvt the power to borrow is to *prevent* the gvt from defaulting on its debts
  • if congress willingly allows the country to hit the debt ceiling, that would be against the spirit of the federalist papers and the spirit of the constitution itself
  • the u.s.’s ability to hold debt has been a great asset throughout the country’s history. the framers understood the power of debt -- but the gop can’t
national review: yeah, the debt ceiling dance is getting old. instead of setting a limit on the debt the government can take out, the u.s. could adopt a “debt brake” system like the swiss
  • switzerland’s debt brake system limits the rate at which the gvt can spend, depending on the rate at which the country’s economy grows
  • the brake also has exemptions that allow the gvt to fund emergency responses
  • and it worked out great for the swiss. the brake system caused the country’s debt to decline
  • the u.s. needs to get its debt under control, but it’s clear that a debt ceiling isn’t working
a cnbc op offered another solution: the u.s. has wayyy too much debt -- it’s not sustainable. a value-added tax would help the country get its debt under control
  • in early 2023, the u.s. is $31.4t in debt. the interest cost on that debt is raising to alarming levels -- the country can’t maintain that high debt
  • budget cuts wouldn’t be enough to solve the nation’s debt problem. the u.s. should impose a value-added tax
  • to protect low-income families from the higher costs created by a value-added tax, the gvt could award tax rebates
  • the gvt can either implement a solution for the debt crisis now, or wait until the debt crisis matures and the country is forced to respond
a marketwatch op had a diff take: debt ceiling or no, the government still has a legal obligation to spend. plus, the treasury can mint a trillion dollar coin and make the national debt fall below the ceiling. everyone’s being dramatic -- hitting the debt ceiling won’t cause widespread economic fallout
  • the treasury is legally obligated to spend money on pre-existing programs, debt ceiling or no. it can’t stop making social security payments
  • if the treasury did decide to hold off on making payments, it would only be for the short term. people can always take out loans until the gvt can pay them again
  • the trillion dollar coin is another solution to the debt crisis that wouldn’t trigger any economic setbacks
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