So apparently 44% of Americans or some such number, are opposed to raising the debt ceiling and as always this just means on any given topic 44% of Americans don't get it (cough ios 7)
(Editor’s Note : We would appreciate it greatly if no cheesy credit card analogies were used )
So here is what is hilarious though. I’ve spoken to a few people in the last week or so, people who otherwise can be thought of as reasonably well informed, and each and every one of them suffers from a misunderstanding of the debt ceiling, essentially variations on how “the debt ceiling” is the same as “the debt” and raising the debt ceiling means you are taking on more debt (this at a time when the deficit is falling like a rock)
So let me see if I can explain how this works without using a credit card or dumbing it down.
So every time congress passes a law, it is possible, that it will cost the Govt. Money (from Medicare benefits to appropriations that allow the NSA to read this as I type it) many, many laws have the effect of driving up spending from govt.
Now when the govt needs to spend money to meet its legislative obligations (this is the key part though IT IS NOT OPTIONAL, TREASURY HAS TO MEET THE OBLIGATIONS THAT LAWS PASSED BY CONGRESS CAUSE) it asks the treasury to “make it so”
Now this is where the fun( Editor’s Note: we apologize for this particular usage of the word fun , the author does not get out much) starts, because treasury you see needs to borrow money to pay for the laws passed, and in just about every other country on the planet this is not an issue, if the legislative branch of govt passes a law requiring govt. to spend 100 bucks Treasury can just borrow a 100 bucks to pay for it; since passing the law is TANTAMOUNT TO SAYING YOU FRIGGIN HAVE TO (repeat after me) HAVE TO PAY FOR IT!!!!
But this America land of the exceptional home of the dysfunctional and so naturally we do things differently here (yes that’s right the switch turns on the other way too).
Here we have a limit of how much treasury can borrow to pay for laws already passed and this limit is called (thank you, thank you) “The Debt Ceiling”.
So every time this limit is reached , treasury has zero interest in borrowing more money, however congress just keeps plugging away and working hard (well not this congress obviously but you know in the past) and the bills keep piling up , which of course means treasury now needs to borrow more money but it can’t … BY LAW !!
Therefore from time to time treasury will ask congress to pass a law saying something along the lines of
“you know how we said you could only borrow 1000 dollars, just kidding you can borrow up to 2000 now, since you know we passed laws requiring the additional money”.
This clever piece of legislation is known as “Raising the debt ceiling” (pay attention now, it’s not raising the debt, that already happened)
In the past, prior to the tea party metastasizing into the cancer that it has become, congress would always raise the debt ceiling (once again if you are upset about govt spending then the correct time to have that argument is when laws are being passed that incur spending) without too much fuss because everyone understood how the debt ceiling actually works.
But all that of course was before the stupid wing of the stupid party suddenly decided that “debt ceiling” was two words, and that was just too hard, one word at a time as Jesus always said (or would have if he thought about it) so let’s just stick with “Debt” and why on earth would we want to “Raise the Debt” (ceiling omitted™ )
Hopefully you now understand this little piece of governmental trivia (explanation via analogy pending)
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