We now have a new bogeyman on the horizon – the debt ceiling.
If you thought the “cliff” was a mess, we are now about to really see some hot air blowing out of Washington. Many people don’t even understand what the debt ceiling is.
Simply put, it is the amount Congress will allow the government to spend over and above what the taxes pay for.
Now here is the kicker; it is not for the new bills, they are going to be added to the budget, it is to pay for bills that have already been incurred and if the bills are not paid on time, the country will be in default.
So it might seem like the crisis is a once in a lifetime problem, but that would be a major miscalculation. Since 1917, the first time the ceiling was raised to $11.5 billion, until 2011, when it was increased to more than $14 trillion, it has been raised more than 80 times. In the past 50 years the ceiling has been raised 74 times and 10 of those have occurred in the past 11 years.
That is the bad news; the county is running out of capital. The good news is that nothing will happen.
That is correct, nothing is going to happen.
Here is how it will all shake out.
The Republicans will lash out at the Democrats for their overspending and entitlement programs. The Democrats will claim that the Republicans have put the country in this hole because they are not sharing the wealth. Over a billion tons of hot air will fly out of their mouths in the next couple of months. Both sides will claim ‘this time is different’ and in order to save the American people they will not give in.
At the last second a deal will be cut and both sides will shake hands and tell everyone the American citizens are safe once again due to their tireless efforts.
And they will be, until the ceiling needs to be raised again in two years!
Keep those stops tight.
Todd “Bubba” Horwitz