The Long Way Home 6.9.2023
Politicians need to stir up enough outrage among half plus one of voters to win the next election. They’ve gotten quite good at it.
We’ve just witnessed one of the more effective, yet silly ways, in the recent brouhaha over raising the federal debt ceiling. A complicit media has a field day reporting on all the machinations surrounding the issue. But like everything in politics they report more about who is winning or losing than they do about the substance.
Congress first passed a debt ceiling in 1917, setting a limit on how much money the government could borrow to pay its debts (money it has previously borrowed). Prior to that, members needed to approve each borrowing and, looking for Congressional efficiency, they told the Treasury Department it had an allowance and said, “don’t come back until you’ve used it all.”
Since 1960, Congress has acted 78 times to raise, extend, or redefine the debt limit.
The national debt has increased under every presidential administration since Hoover’s, almost a century ago, and you know how his tenure turned out.
We lackeys of the politicians, bureaucrats, and plutocrats like to be outraged about the debt. Sitting at the bar, coffee shop, or boat landing we express that outrage. “The government should live within its means, like I have to,” is a favorite quote.
But is that true?
According to Ben Sprague, a bank officer in Maine who writes a weekly newsletter on all things real estate and finance, we the people now hold almost $1 Trillion in credit card debt. That's almost $8,000 per household according to an April 13 article in USA Today. Per household.
Average interest on credit card debt is 20%, significantly higher than the low single digit rate the federal government pays to borrow. Added to mortgages, car loans and student loans (not to mention loans for the toys we cherish), we the people look a lot more like the federal government than we care to admit. Heavily in debt but the interest rate we pay is higher.
For most of American history there has been a federal debt. But unlike its citizens, the government can and does just print more money to make its payments.
If the government misses a payment on its credit card, a crisis of confidence takes hold and the overall economy, and real people, suffer. In 2011 a Republican Congress held the debt ceiling hostage in negotiations to get deficit reduction from the other side. Failing to raise the debt limit in time led to a drop of 2,000 points in the Dow Jones Industrial Average, a downgrade of the government's credit rating, and likely the re-election of a Democratic President the following year.
Politicians, bureaucrats, and plutocrats make debt ceiling negotiations a weeks long Kabuki theater, almost always just to reach a compromise they know they will reach all along.
Since debt ceiling rage has a shelf life, politicians use immigration, Critical Race Theory, drag queens, wokeness, and Disney to keep people up in arms. They need outrage to make sure all the money that is spent by the plutocrats for their elections keeps flowing.
Friedrich Nietzsche, a 19th century German philosopher once said, “They muddy the water, to make it seem deep.” The phrase “muddy the waters” means to cause an issue to be unclear and harder to understand. Especially for we lackeys.
That’s exactly what happened this Spring over the debt ceiling issue.