Debt Ceiling, Your Finances, and Dumb Politics
by Doyle Ranstrom on May 5, 2023
The House, led by Republicans is holding the country hostage over the debt ceiling.
If you think this does not matter to you, try this. Print out a statement of the current market value of your retirement accounts. Then cross out the current market value and write in zero. Actually big zeros. Seem dramatic, maybe, maybe not. Keep in mind, if the US were to default on its debt, it is the same as if a household does not pay its mortgage, credit card debt, or any other loan. For a household, it can mean bankruptcy and liquidation of assets. What are assets worth during bankruptcy? What are US stocks, bonds and real estate worth if the country goes into the equivalent of bankruptcy?
Raising the Debt Ceiling has been generally routine. It has been raised 78 times since 1960. From 2000-2016 the debt ceiling was raised 14 times as the Federal Deficit went from $5.7 Trillion to $19.5 Trillion. Republicans want to blame Obama Presidency the increases, but the reality is using a total percentage, the deficit increased more under the Bush Presidency than the Obama Presidency. [Think of it this way, if you $5 and you increase it to $10, that's 100% increase. If you then increase $10 to $15, its the same dollar amount but the percentage is only 50%.]
The Debt Ceiling was increased three times during the Trump Presidency and the National Debt went from $19.5 Trillion to $27.8 Trillion or almost $8 Trillion. And note, that was in 4 years.
Republicans say they are trying to be fiscally responsible. But they did not worry about being fiscally responsible during the Bush Presidency when led by the Bush Administration, the US started two wars and cut taxes. Basically, the wars were financed "off the books" and unless and will be paid for by our children and grandchildren for years to come. Neither did Republicans worry about being financially responsible during the Trump Presidency when they cut corporate taxes which allowed corporations to buy my their own stock back which made their already wealthy stock holders wealthier.
- Note: Over 50% of US stocks are owned by the top 1%.
Republicans may have been financial responsible in the past, but they have not done so since the beginning of this century. Republicans who say they are financially responsible are the equivalent of someone who starts a wild fire and then serves coffee to the firefighters afterwards and tells them he/she was part of the solution.
Remembers raising the debt ceiling is simply authorizing the Treasury to pay current debts and/or obligations. It means we are paying our existing bills.
I am not saying the debt did not increase during Democratic Presidents, it has. But for the record, since 1960 the debt ceiling was raised 49 times under Republican presidents and 29 times under Democratic presidents. Anyone who thinks Republicans are more financial responsible then Democrats probably also thinks Fox News is actually a source of news, unicorns exist in the wild, and Sasquatch hangs out in Southern Oregon.
The point is the debt ceiling is not about the future, it is about paying our debts and maintaining our place in the world as the number one economic power. Those that think this is an economic stand are beyond ignorant. Some Republicans are willing to bankrupt the country and its citizens to make a political point which is not even a political point. It is a dumb politician point.
And that brings me to my final point. Normally I do not worry about this type of political stuff. After various politicians get done spreading their tail feathers, the debt ceiling gets raised. But there are enough current Republicans in the House who would bankrupt the country and your retirement because they do not understand the difference between paying current debts and planning fiscally for the future. Not do they understand the damage they could do to the economy including your retirement if the country defaults
- Note to voters, when you elect dumb people to Congress, you get what you pay for. Not their fault, yours. You elected them.
We need to have an intelligent conversation about our National debt, Federal Revenues and Expenditures. But raising the debt ceiling is not the place. Putting the country and your finances at risk makes no political or economic sense.