Earlier this week, the United States national debt spiked $339 billion. Usually, this takes the government accomplish this type of feat over a period of few months. Not this time, however. The federal government was able to increase the national debt by $339 billion. How could that even happen?
Let’s take a look at the context.
On Monday, the U.S. president signed a bill that would suspend the debt ceiling limit until Mar. 15, 2017. This means the nation’s esteemed elected officials can borrow without any constraints and zero apprehension (of course!).
Moreover, the federal budget was set for fiscal years 2016 and 2017.
What does this mean for politics as usual? Well, President Obama and the Republican leadership will not have to have a tense showdown that is really just political theatrics. The way these showdowns go down, each politician from both sides of the aisle proves they should have been thespians.
As Reagan budget director David Stockman told CNBC:
“We’re going to have a shutdown sooner or later. We’re on the fiscal Titanic, and we’re going to hit something hard and immovable one of these days. We’re in month 75 of this so-called recovery. Congress has squandered the entire time, done nothing about the long-run fiscal outlook. If anything, they’ve basically been trying to find ways to get out from under the caps they put on themselves in 2011.”
Kicking the can down the road is political expedience and fiscal insanity. Debt servicing payments are already a major facet of the budget. When the Fed inevitably raises interest rates those payments on the debt will skyrocket (SEE: Chart: Net interest will surpass defense, non-defense spending by 2022).
But with Yellen already talking about negative interest rates in the event of an economic crisis (SEE: Yikes! Janet Yellen would consider negative interest rates if economy collapses). So who knows if rates will ever be increased?
This isn’t a D or an R thing. It’s just politics as usual. Whether it’s Donald Trump or Hillary Clinton sitting in the Oval Office beginning in 2017, the national debt will still be an astronomical $20 trillion. Nothing will change. It’s the system that needs changing, not the occupant in the White House.
The reality of deficit spending and the actual current debt are bad. Bad enough to provide scary headlines in and of themselves. But when you slap up a teaser headline ‘increases debt by $339B in one day’ you lose credibility. They increased the ceiling, not the debt.
The deficit must reach 0 – a balanced budged, before tax breaks are given to the wealthy.
I knew in 2011 that BHO BOZO and the Clowns in congress would weasel out of the cuts. If they do nothing by 2025 we will be paying more in interest payments on debt than we spend on Defense. What a bunch of idiots we have running our country, I mean RUINING our country.