It is, I suppose, good news that a deal has been reached in Washington to extend the US "debt ceiling" and so eliminate, for now, the risk of a US debt default. It's only a temporary reprieve, however -- the ceiling is now set to expire in December, meaning that all this nonsense will start all over again in just a few weeks.
The debt ceiling has been in place since 1917, and only one country other than the US has such a thing: Denmark, of all places. The whole concept makes no sense, and in a way means that the US budget system is mathematically over-determined.
Think it through. Congress gets to vote on the US budget each year -- spending and revenues. If spending exceeds revenue -- that is, there is a deficit -- the Treasury borrows to fund the gap. (Note to any MMT-loving readers: I know this isn't actually necessary, but it's how things work right now)! The debt is simply the accumulated budget deficits resulting from those yearly spending and taxation decisions of the Congress.
Setting a separate "ceiling" for that debt is unnecessary and illogical, and only serves to create the kind of shenanigans we have witnessed over the past few weeks. The Republicans are much more ruthless than the Democrats about using the ceiling for short-term political advantage, so you'd think the Dems might have used their wafer-thin majority in both Houses to abolish the stupid thing altogether, but here we are. One unfortunate aspect of today's deal: we've been robbed of the chance to hear the howls of anguish that would have come from the GOP if the much-mooted trillion-dollar platinum coin had made an appearance!
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