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It's worth noting that the debt ceiling is not a brake on spending, which continues apace. It is a brake on paying back debt. The analogy to personal finance th
by astazangasta 7y ago
It's worth noting that the debt ceiling is not a brake on spending, which continues apace. It is a brake on paying back debt. The analogy to personal finance that debt hawks love would be to rack up a bunch of debt on your credit card, and then balk when the bill comes due.
- User23 7y agoIt's actually even more ridiculous than that. All the expenditures debt issuance "funds" have already been appropriated by congress, which is to say the agreement to pay has already been made. The debt ceiling is just an accounting gimmick based on the legal theory that the US Treasury's demand account at the Federal Reserve can't overdraw. Treasury could very much just write the checks (and probably is legally obligated to!) and then it would be up to the Fed to clear or bounce them. I don't see any Federal Reserve Chairman personally signing off on forcing a government default.