The debt ceiling debate is re-emerging in Washington, D.C. as the nation heads toward another showdown over deficit spending. So just what is the debate all about, and what are some of the common misconceptions about what happens if the nation hits the debt ceiling?
The nation’s $16.699 trillion debt ceiling is nothing more than the current limit that is put into law limiting the amount of borrowing that can be done by the U.S. Treasury. In times of deficit spending, the federal government sells bonds or notes to investors with the promise to pay interest in exchange for those investors lending the money to the government to cover the deficits.
The most famous of these Treasury bonds are savings bonds, which grandparents have been giving grandchildren for generations. However, most people have also heard of what is known as the ten year Treasury note. Many common items like many adjustable mortgage loan rates are tied to the rate the government pays to borrow money for a ten year term.
The debt ceiling itself is a creation by Congress and the President that prevents the U.S. Treasury from borrowing more than a specific amount of money, without getting additional approval from elected officials. This “debt limit” is designed to force a national debate on federal government deficit policies, and have Congress and the President take stock of our spending and taxation policies that have led to the need to enable further borrowing.
When the debt ceiling is reached, the effect is that the U.S. Treasury cannot add any additional debt burden to the nation until Congress passes and the President signs legislation raising the limit.
Contrary to what many believe, even in the media, this does not mean that the government shuts down, it only means the government cannot spend more money than it collects in revenues until the debt ceiling is increased.
With federal government revenues projected to top $2.7 trillion this year, the government receives, approximately, $7.4 billion each and every day, and it will spend approximately $3.5 trillion over the year or about $9.7 billion each day.
This approximate $2.3 billion dollar daily deficit is what is paid for through the issuance of new debt that is prohibited once the debt ceiling is reached.
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Rick Manning (@rmanning957) is the Vice President of Public Policy and Communications for Americans for Limited Government.
48 comments
Why there is a silence about a debt ceiling? There will be a default?
??? ??????
Why there is a silence about a debt ceiling? There will be a default?
??? ??????
Is the USA the new Zimbabwe?
Is the USA the new Zimbabwe?
Some fancy numbers there, can we compare realistically to those of the past percentage wise? …….And actions/affiliations of those in power.
Some fancy numbers there, can we compare realistically to those of the past percentage wise? …….And actions/affiliations of those in power.
Rick is right. Now, lets march to Washington and kick Obama in the nuts!
Typical Right Wing hypocrite.Where was he at when Bush was busting the budget?Where was he when Bush led us into two unpaid for wars?
Amusing to watch all there “conservative” kooks become “born again” libertarians.
Send him a few bucks sucka.Itll make you feel better!
You forget your recent history. From 2004 on, Bush could not have spent a penny without the help of Democrats. And from 2006 on, it was ALL Democrats.
Now, I will admit that Bush tried to make it easy for the middle class to afford his war by his removing them from paying income taxes. It would have ended a whole lot faster if we had all been taxed for it. Now, we will not only have to pay for the current Keynesian folly through Obamacare fees, other fees, and inflation, which the administration says isn’t there by publishing phony numbers, we will eventually have to pay for Bush’s folly as well, which, though only half of the current folly, is still a lot.
But to forgive that Asshole in the Whitehouse by somehow saying his folly is equal to Bush’s folly is sophistry, and a sign of your lack of logical acumen.
The debt ceiling is what it is; And pure big “L” Libertarianism with its isolationist idealism is nothing less that monumental stupidity. Little “L” Libertarianism, on the whole as a nagging wife, married to Conservatism, is its best use, however.
Yeah, gotta disagree with that last statement. A warmonger is a warmonger. We shouldn’t be trying to police the world.
I agree. Our coat of arms from France says something like “Don’ mess wif my peeps,” while our Scottish badge reads something like, “Don’t Run Away!” But I also know that the only way the bad guys will leave you alone is if they know you will beat the crap out of them. And, somehow, there are ALWAYS bad guys.
We should NOT be policing the world. But the world should know that we will C.I.L.L. them, if they mess with us, or our allies who support us in kind.
I agree with that. But that’s where Paul and I diverge. You see, I think from space that glass parking lots are lovely no matter what time of year it is. :)
As to the potential typical get them first retort, I tend to lean heavily on the Ron Paul side of this. It’s their country. If they want to kill each other, tough shite. We shouldn’t be trying to create governments.
If 99% of the population disagrees with me on this point, fine. Then roll in and make the danged place a colony. The children of the children are the only ones that would change enough to make the country more like ours. Even then eventually they’ll end up with a bunch of libitards that will try to return it back to its ‘roots’.
Actually on reflection, Sarah is pretty good at turning one subject into another. I think she’s with the NSA. Able to figure out pretty effectively what pushes others buttons. That’s generally why I just don’t respond to it any longer. But mostly it’s like taking candy from a baby. I just hate making it look like a fool so so so very often. ;)
Have a Great Day, Poly:)
No No. Gotta call that one. The only true conservative is mostly libertarian. Conservative has only become about shoving something down another’s throat over the last 75 to 100 years or so. Prior to that it was definitely about minding your own business, building up your family and building up your community. Not tearing it down by making legal issues out of social ones.
Agreed. Read my statement three or four Pytels down..
In Viking Briton, the Men were converted to the religions of the nagging wives who were Saxon and Celts. I had a different vision in my head from the one you read.. Hmm that rhymes..
Pay no attention to Sarah. I’ve repeatedly told it that I agree. Bushy was to blame as well, but it doesn’t care about spreading the wealth of blame. Only the wealth in others pocketses.
“I’ve repeatedly told it…”
I’m tearing up from laughter!!! …. :oD
Why? It’s not Obama who writes and passes the funding bills, it’s Congress.
I just want to kick Obama in the nuts.
Well probably sooner than since you have told the truth about anything.
Yes, but he and Bushy signed off on it.
Rick is right. Now, lets march to Washington and kick Obama in the nuts!
Typical Right Wing hypocrite.Where was he at when Bush was busting the budget?Where was he when Bush led us into two unpaid for wars?
Amusing to watch all there “conservative” kooks become “born again” libertarians.
Send him a few bucks sucka.Itll make you feel better!
You forget your recent history. From 2004 on, Bush could not have spent a penny without the help of Democrats. And from 2006 on, it was ALL Democrats.
Now, I will admit that Bush tried to make it easy for the middle class to afford his war by his removing them from paying income taxes. It would have ended a whole lot faster if we had all been taxed for it. Now, we will not only have to pay for the current Keynesian folly through Obamacare fees, other fees, and inflation, which the administration says isn’t there by publishing phony numbers, we will eventually have to pay for Bush’s folly as well, which, though only half of the current President’s folly, is still a lot.
But to forgive that Asshole in the Whitehouse by somehow saying his folly is equal to Bush’s folly is sophistry, and a sign of your lack of logical acumen.
The debt ceiling is what it is; And pure big “L” Libertarianism with its isolationist idealism is nothing less than monumental stupidity. On the whole, little “L” libertarianism, as a nagging wife, married to Conservatism, is its best use. On the other hand, we should be very, very careful when considering going to war – like what do we want to achieve, and when do we come home, and are we going to keep our promises to our fighters.. or.. should we just turn the place into a glass lake.. stuff like that.
See.. that’s why I would be a lousy President. I don’t believe there are such things as non-combatants in a war.
Yeah, gotta disagree with that last statement. A warmonger is a warmonger. We shouldn’t be trying to police the world.
I agree. Our coat of arms from France says something like “Don’ mess wif my peeps,” while our Scottish badge reads something like, “Don’t Run Away!” But I also know that the only way the bad guys will leave you alone is if they know you will beat the crap out of them. And, somehow, there are ALWAYS bad guys.
We should NOT be policing the world. But the world should know that we will C.I.L.L. them, if they mess with us, or our allies who support us in kind.
I agree with that. But that’s where Paul and I diverge. You see, I think from space that glass parking lots are lovely no matter what time of year it is. :)
As to the potential typical get them first retort, I tend to lean heavily on the Ron Paul side of this. It’s their country. If they want to kill each other, tough shite. We shouldn’t be trying to create governments.
If 99% of the population disagrees with me on this point, fine. Then roll in and make the danged place a colony. The children of the children are the only ones that would change enough to make the country more like ours. Even then eventually they’ll end up with a bunch of libitards that will try to return it back to its ‘roots’.
Actually on reflection, Sarah is pretty good at turning one subject into another. I think she’s with the NSA. Able to figure out pretty effectively what pushes others buttons. That’s generally why I just don’t respond to it any longer. But mostly it’s like taking candy from a baby. I just hate making it look like a fool so so so very often. ;)
Have a Great Day, Poly:)
No No. Gotta call that one. The only true conservative is mostly libertarian. Conservative has only become about shoving something down another’s throat over the last 75 to 100 years or so. Prior to that it was definitely about minding your own business, building up your family and building up your community. Not tearing it down by making legal issues out of social ones.
Agreed. Read my statement three or four Pytels down..
In Viking Briton, the Men were converted to the religions of the nagging wives who were Saxon and Celts. I had a different vision in my head from the one you read.. Hmm that rhymes..
Pay no attention to Sarah. I’ve repeatedly told it that I agree. Bushy was to blame as well, but it doesn’t care about spreading the wealth of blame. Only the wealth in others pocketses.
“I’ve repeatedly told it…”
I’m tearing up from laughter!!! …. :oD
Why? It’s not Obama who writes and passes the funding bills, it’s Congress.
I just want to kick Obama in the nuts. If he says,”Oh, that hurts!” it will be the first time he has told the truth in six years.
Well probably sooner than since you have told the truth about anything.
Yes, but he and Bushy signed off on it.
The debt ceiling is to pay for the funds that Congress has already spent in previous budgets. Not raising the debt ceiling is a decision to not pay for the funds and to not pay the interest (or anything else) on the investments in bonds that people and other country’s have made in us.
You do understand what you stated, right? “The debt ceiling is to pay for the funds that Congress has already spent…”.
This is pretty much the liberal mantra on this subject. Are you sure you wouldn’t like to rephrase that a little bit?
There is no need to rephrase. The statement while a bit awkward is correct. We borrow money to pay bills that we have already incurred. Refusing to raise the debt ceiling is like going to the store, buy things on credit, and then refusing to pay bill. You have already consumed the goods or services, you can’t give them back, so you have to pay for them. If you don’t want to pay, don’t buy. Congressional Republicans want to buy but not pay.
Ahhh. I feel so much better now that the queen has spoken.
:P
The debt ceiling is to pay for the funds that Congress has already spent in previous budgets. Not raising the debt ceiling is a decision to not pay for the funds and to not pay the interest (or anything else) on the investments in bonds that people and other country’s have made in us.
You do understand what you stated, right? “The debt ceiling is to pay for the funds that Congress has already spent…”.
This is pretty much the liberal mantra on this subject. Are you sure you wouldn’t like to rephrase that a little bit?
There is no need to rephrase. The statement while a bit awkward is correct. We borrow money to pay bills that we have already incurred. Refusing to raise the debt ceiling is like going to the store, buy things on credit, and then refusing to pay bill. You have already consumed the goods or services, you can’t give them back, so you have to pay for them. If you don’t want to pay, don’t buy. Congressional Republicans want to buy but not pay.
Ahhh. I feel so much better now that the queen has spoken.
:P