Wowwwwww. This is just an amazing feat no one saw coming, I mean they have only raised the debt ceiling how many times??????? I believe this is actually the first time ever...wait who the fuxkkkl are we kidding. Of course they were going to raise the debt ceiling, they always do and always will because that's how pathetic we are......we just keep raising the debt ceiling with absolutely no worry. We will never stop raising the debt ceiling that's why I find it completely idiotic and foolish that it's even debated each and every time we come to this apex.
House passes bill to avoid government shutdown, suspend debt limit — but it faces Senate roadblocks with deadlines near
https://www.cnbc.com/2021/09/21/government-shutdown-house-passes-funding-debt-ceiling-bill.html
Let me give you my take on this ridiculous debt ceiling business.
Deficits created by spending > revenue increase the amount of base money in the private sector economy*, and the subsequent and linked issue of government bonds then provides a tool of the Central Bank used to regulate the ratio of readily available base money in the form of bank reserves to temporarily non-circulating, or "sidetracked", money in the form of bonds. To prevent deflation -- which no nation that runs on fractional reserve banking and credit can tolerate -- the government must supply additional base money, also called "outside money," to an economy that is growing.
The critical question then is not whether the government must run deficits from time to time, that it must do !, but how big should those deficits be? Because the U.S. matches it's issuance of new base money with subsequent bond issuance, the appearance is that of "borrowing money." But actually the new money is created and spent into the economy
before it is later "borrowed" by issuing Bonds. Or said another way, there is no actual borrowing going on in anything like the traditional meaning of the word "borrowing."
The Constitution requires that the nation pay its debts. The so called "debt" will
always rise over time as long as the economy grows, or emergency spending or investment needs arise.. The government
always money funds its expenditures that exceed its revenue, i.e., it "prints" the money it needs, and only later matches what it has printed to bonds that it sells to the private sector. If the nation's economy grows, its expenditures must exceed its revenues to some extent to prevent the economy from becoming starved of base money.
The "debt ceiling" concept is a purely political one. It's used by politicians to convince their constituents that they are doing what they can to prevent ruinous debt from being visited on them and their progeny. When politicians oppose this program or that, they will fall back on the "can't afford it ruse" to justify their political opposition to often otherwise popular programs. This is effective with their constituents who naturally equate their personal finances to government finances, though in realty the constraints acting on personal versus government finances are very different.
What those same politicians should be doing instead is worrying about either inflation, that may be caused by too rapid an expansion of base money, or the loss of budget flexibility in discretionary spending that could result from bond servicing, which is non-discretionary, becoming too large a fraction of total government expenditure. Of course the so-called debt could be paid off in short order by converting outstanding bonds to base money**, but that would likely occasion the first problem mentioned, inflation. There is some debate among economists on this point however.
Politicians understand that it would violate our U.S. Constitution for our Treasury not to pay it's bills. This debt ceiling game of chicken they play is a ridiculous charade for the benefit of misinformed but well-meaning constituents.
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*In the opposite case, where revenues exceed expenditures, base money is net removed from the private sector economy and surpluses are produced. If this is done to any significant extent it will result in too little money for savings and investment. Recession, deflation and depression, more or less in that order, is likely to follow.
**This is similar to what happens in Q.E., but the amount of bonds converted
so far in 21st Century Q.E. has been small compared to the total outstanding. Japan may serve as the test Canary here. They not long ago converted roughly 50% of their JGBs.
