Thoughts on the Debt Limit

The United States treasury reached the national debt limit last week. The Trearury Secretary says she can get by till June with accounting tricks, but after that, it will be default. Everyone agrees thaat a default would be financially catastrophic.

There are several issues in play here. First, there is no reason to require Congress to approve an increase in the debt limit. It is a complete historical anomoly. The U.S. Treasury is spending money that Congress has already appropriated. If Congress thinks the debt is getting too high, it can adjust its spending and taxing priorities.

Then there is the gross Republican hypocrisy when it comes to fiscal issues. Whenever there is a Democrat in the White House, all of a sudden the GOP pretends to be SO concerned about the budget deficit. But the facts show that the deficit has increased much more under GOP presidents since Reagan took office in 1981. The deficit doubled under Reagan (and the national debt tripled), it increased 67% under Bush I, then Clinton actually eliminated the deficit and produced a healthy surplus, then Bush II left with a deficit of $1.4 trillion, cut in half by Obama, and then tripled by Trump. Details here: https://amarkfoundation.org/us-federal-deficits/

The conservative clique which opposed McCarthy for Speaker are the same folks who would rather default on our federal debt obligations than actually see the U.S. economy survive and thrive. They are akin to terrorists, people who have gone to Washington not to govern, but to blow up the government. And McCarthy is beholden to this group because they stepped aside to allow his election as Speaker on the 15th ballot. Consequently, it is unclear whether the House will be able to take any responsible action on raising the debt ceiling. Stay tuned.