Understanding the Inane ‘Debt Ceiling’ System

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September 28, 2021 3:39 p.m.

I’ve made this point a few times. I think most Editors’ Blog readers fully get this. But it’s so important I thought I’d make the point again. People continually claim that the debt ceiling vote adds to the national debt or somehow runs up spending. That is not true. In most cases we can’t make useful analogies between macro-economics and government spending and the household and personal spending most of us are familiar with. This is the rare exception.

When we talk about raising the debt ceiling limit we are talking about paying for things we already bought. It’s like a credit card. You bought the clothes or paid for the movie tickets with your credit card. Now you’re deciding whether to pay your credit card bill. In the real world these two things are not two things. They’re one. Unless you plan to declare bankruptcy or least kill your credit score or go on the lam charging something to your credit card obligates you to pay your credit card bill.

In a formal government sense Congress passes budgets making it literally the law to do certain things, spend certain money, etc. It’s literally the law. You can’t not do it. We’ve just tacked on this additional step about making sure we have the money on hand to pay for the things we already literally made it the law to do.

There is a complex and fairly stupid history of how we ended up with this system. Suffice it to say we’re one of the only countries in the world with such a ridiculous system – one ripe for parliamentary terrorism. But we’ve had it for a long time. And it was only in the last decade that Republicans got the idea to take the country hostage every few years by threatening to drive the country in default. But here we are.

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