If you had a credit card debt limit of $100,000 and you set a maximum debt limit of $1,000, would you be concerned if you exceeded that limit—enough to default on your debt? A self-imposed debt limit of $1,000 is like the problem with House Speaker McCarthy and his attempts to get President Biden to cut government spending or the House will force a default on our national debt.
The debt ceiling “crisis” is a solution looking for a problem. Whether this crisis gets solved by time of publication is unknown as of this writing (deadline was May 26 due to the Labor Day holiday).
First, let’s look at the time between 2017-2019 when both Houses of Congress and the presidency were controlled by the Republicans. The debt limit had to be raised three times. There was no threat of defaulting. The Republicans were in control.
They could have cut spending, but didn’t. Instead, spending increased during this time. Congress actually increased the national debt by about 40%. Why? Because government spending is popular and tends to keep the party in power in power.
At the end of 2017 the Republican Congress increased our national debt by giving major tax cuts to corporations and the wealthy. Less money means less income, which means bigger debt.
Now at the end of May 2023, why is there this economic brinksmanship with the national credit ratings and McCarthy’s threat of defaulting on our debt—potentially sending the U.S. and the world into a recession? The results could mean the loss of thousands of jobs and possibly even the loss of Social Security payments and money for disabled veterans.
Put simply, the reason we are having this debt limit crisis is that the Republicans want to make President Biden look bad and cause him to lose the presidential election in 2024. President Biden said as much in a recent speech (see source above). Republicans know that presidents get the blame or the credit for the economy even though presidents don’t really have much power to control the economy. Congress and the Federal Reserve have that power. McCarthy and his Republican allies are playing on the ignorance of the American people as to how government really works.
The president does have the power to invoke a clause found the in the 14th Amendment which states in Section 4: “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 [the Civil War], shall not be questioned.”
So, why doesn’t President Biden just invoke this provision? The answer is politics and the Supreme Court. There are six conservative justices on the Court, three of whom were appointed by President Trump. Biden must fear that these six justices will ignore the clear text of the 14th Amendment and rule in McCarthy’s favor.
This can’t happen, you say. Then, how do you explain the Court’s decision in the 2010 Citizens’ United vs. The Federal Election Commission, which turned corporations into “individuals”? This decision gave corporations the “right” to donate as much money as they wanted to election campaigns under the “free speech” protections of the First Amendment.
This decision was insane, giving enormous power to corporations over voters. If corporations are viewed as individuals, then corporations, like individuals can be sentenced to prison—which is, of course, ridiculous. If they are individuals, then they should also have the power to vote—which they don’t—at least through the election box.
There are at least two premises here that need to be understood. 1) It’s all about power. Ethics and doing what’s good for the country do not even play a part here. Otherwise, this debt limit “crisis” would not even be an issue. 2) The Republican Party as it now exists does not believe in democracy. In a recent Gallup Poll, 53% of Republicans favor the reelection of Donald Trump as president, the one who tried to overturn the 2020 election and who is still stating the election was stolen.
You’ve got the facts and now you understand what’s going on with the debt crisis talks. If the Republicans get their way, and the Court supports them, then this debt limit crisis will be a big issue during the 2024 presidential election.