In the United States, the debt ceiling or debt limit is a legislative limit on the amount of national debt that can be incurred by the U.S. Treasury, thus limiting how much money the federal government may pay on the debt it already borrowed by borrowing more money. Wikipedia
I am started to get worried about the debt ceiling. The US reached the debt ceiling of 31.4 trillion dollars earlier this year. Treasury is taking extraordinary measures to save cash.
Two articles of note:
House Republicans walk the plank – Dana Milbank at the Washington Post
https://wapo.st/3AEeFsE (it’s a gift link)
Why the GOP May Actually Want a Second Great Depression – Thom Hartmann, writing a community post on Daily Kos
Dana analyzes the latest bill, a dirty debt ceiling hike passed by House Republicans 217 to 215, courtesy of notorious liar George Santos casting the last vote. Under Trump, Republicans raised the debt ceiling three times without blinking an eye or any conditions.
According to an administration analysis of what the 22 percent cuts translate to, Kiggans (R-VA) is now on record supporting:
Shutting down at least two air traffic control towers in Virginia.
Jeopardizing outpatient medical care for 162,300 Virginia veterans.
Throwing up to 175,000 Virginians off food stamps and ending food assistance for another 25,000 through the Special Supplemental Nutrition Program for Women, Infants and Children.
Cutting or ending Pell Grants for 162,900 Virginia college students.
Eliminating Head Start for 3,600 Virginia children and child care for another 1,300 children.
Adding at least two months to wait times for Virginia seniors seeking assistance with Social Security and Medicare.
Denying opioid treatment for more than 600 Virginians.
Ending 180 days of rail inspections per year and 1,350 fewer miles of track inspected.Dana Milbank @WaPo
Kicking 13,400 Virginia families off rental assistance.
That’s a heck of a list and brutal damage done to safety, the vulnerable, education, food, housing, veterans, medical care, Social Security and Medicare in the dirty debt ceiling bill. Why would any sane Representative vote for such an atrocity? Multiply that by 30 other vulnerable House Republicans who did the same.
The reason? Republicans serve the rich, not their constituents. Thom Hartmann makes a convincing case that economic and market smashes help the rich and damage the middle class and poor. Examples (the author’s):
- Just during that one single terrible pandemic year of 2020, the Institute for Policy Studies documents, the world’s 2,365 billionaires saw their wealth increase by a full 54%, as U.S. billionaires saw their net worth surge 62 percent by $1.8 trillion. Average billionaire wealth worldwide increased 27% in that one year alone.
- But the average American can be forgiven for thinking that Republicans would be reluctant to crash the economy. Their lived experience is very different from that of Elon Musk (532% increase in wealth during the single year of 2020), Mark Zuckerberg (86% increase), or Jeff Bezos (65% increase).
- The Bush and Trump crashes, in other words, did the work the morbidly rich have been demanding for years. Wages fell, unions struggled, corporate profits hit highs literally never before seen in America, and hedge funds bought up millions of distressed single-family homes to flip into high-priced rentals.
But surely, the rich, who have earned so much, pay back their fair share in taxes? Nope. Hartmann writes:
“And with Trump’s massive tax cut for his fellow billionaires, they could keep most all of it: by that time the average American billionaire was paying less than 3 percent in income taxes (a situation that persists to this day).”
Find me any working person that pays 3% in taxes. They will be earning very little. We don’t expect such a low rate from rich people, who have all the advantages.
But, if Republicans crash the economy and get kicked out, don’t they lose their jobs? Sure. But the rich will hire them as lobbyists (Krysten Sinema is angling for one), give them board positions (Paul Ryan is a board member of Fox News), or generally get bailed out. Some gerrymandered districts may send these folks back again until they collect a federal pension.
The bonus for Republicans? An economy that has decades low unemployment, decades low unemployment for African Americans, falling inflation, investing in jobs of the future, strong interest in unions, switching to renewable energy, will crash, destroying President Biden’s chances for re-election. Such chaos are exactly the conditions allowing a strongman like Trump to become a dictator, a classic story seen in many countries and histories around the world.
Until the Republican maniacs in the House are voted out, and the debt ceiling raised past the election, I’ll remain worried. President Biden and Democrats are standing firm, and not negotiating. Biden learned as Vice President for President Obama that negotiating on the debt ceiling hobbled President Obama’s agenda and the economy, and gave the Republicans the idea that blowing up the world economy was a profitable endeavor. The 14th Amendment, clause 4 may come into play if Treasury runs out of room for maneuver.
“The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
I’d like to see President Biden do that if no clean debt increase is possible, simply for Republicans to whine to the Supreme Court that they weren’t able to blow up stock markets and economies like they wanted. Given the Supreme Court’s blackened reputation over corruption, that would be fun to see how they contort themselves.
Raise cash and liquid assets is my recommendation. Mail your Representatives and fill their phones and emails. The extreme wealth inequality is not sustainable or ethical capitalism. Ordinary people will suffer, again.
Dana’s recommendation? “If the week’s chaos is the House GOP leadership’s idea of thoughtful, this would be an excellent time to unload your Treasury bonds.”
Stay safe out there, financially, physically, emotionally.
Sincere yours,
smilingdad
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