The idea may seem silly or gimmicky – but it’s a serious solution to a serious problem
The United States is again hurtling towards default on its “national debt”. While a two-month extension has emerged, the fundamental dynamic remains – and the risk. This is not happening because there is any danger of the Treasury being unable to find buyers for treasury securities. Nor is it happening because of any presumed “burden” from interest payments. Instead, it is happening because the United States Congress has placed an arbitrary limit on how much “national debt” the US government can incur. Congress has authorized and required a certain amount of spending – but is blocking the treasury’s preferred tool for financing that spending.
Given how often politicians have invoked “the deficit” and “the debt”, it’s natural for the public to think that the debt ceiling represents a deeper “lack of money”. When news outlets like CNN publish contextless headlines claiming the “US government” will “run out of money” by a certain date, this impression is reinforced.
