It’s that time again for Congress to kick the can down the road and stick the American people and generations to come with crimpling debt—It’s time to raise the debt ceiling.
It’s been raised 78 times. The first time was in 1960, and it’s been raised yearly ever since.
The debt limit/ceiling is the amount of Federal debt (public debt) or securities investors hold on the money they lent to the Federal government.
Every time the government borrows money, they have to pay it back with interest, and since we, the people, are the government. Our taxes fund the government (not including what they borrowed), we all are on the hook to pay back the money—that means you, your children, and your grandchildren and generations to come will be saddled with paying back the debt—That means higher inflation and higher taxes.
So put in simpler terms, imagine you max out all of your credit cards and you borrowed money from your family and friends to pay it back, but you only raised enough money to pay the interest on the credit cards…
So you call the credit card company and you ask them to raise your credit limit from, say $5,000 to $15,000. Then you max out the $15k and ask your family and friends to give you the money to pay the interest on the $15k… then you call the credit card company and ask them to raise your credit limit to $30 thousand, and so on and so on. You keep borrowing money and spending, each time maxing out your credit limit…
That’s what the government does.
It spends more than it takes in in taxes, then borrows money from the Federal Reserve and other countries like China and spends money it doesn’t have. Then when they can’t afford to pay the interest payments on the money they borrowed, they hold a vote to raise the debt limit, which allows them to borrow more money just to cover their obligations.
The debt limit is a legally established maximum on how much the government can borrow to pay the government’s bills– everything from social welfare programs to salaries for the military.
It’s a vicious cycle that never seems to end.
Of course, Congress wouldn’t have to raise the debt ceiling if they just cut their spending, ended borrowing, balanced their yearly budgets, and only spent money that they took in from taxes.
If only… But they won’t cut their profligate spending.
Currently, The United States hit its borrowing cap of $31.4 trillion, prompting some in Congress to call for a raise in the debt ceiling.
Like death and taxes, it’s a sure bet that Congress will raise the debt ceiling again.
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