Confusions About the "Debt Ceiling"... Help Me!

OK, I’m not a Nobel Prize-winning economist like Paul Krugman (thank you, God) but I don’t get the current arguments about raising the U.S. debt ceiling.

For one, when I’m on a ladder, fixing a light socket, and my head hits the ceiling – it hurts. It goes “bump.” I have to pick pieces of popcorn ceiling out of my thinning hair. But when the U.S. government’s head gets close to the debt ceiling, nothing happens. They just tear out the existing ceiling, and add another foot or two to provide more clearance. Of course, this eventually eliminates the second story of their house… unless, of course, they tear off the roof and add a third story to the structure. And so on, and so on… until the house eventually tips over and crashes to the ground because it’s too tall for its foundation.

But I digress..

My #1 Confusion: Haven’t We Already Crossed the Rubicon? My biggest confusion is about the talking point – coming even from so-called “conservative” Congresspeople – that “We can’t NOT raise the ceiling. We need to do it because this money has already been spent, and we owe it to someone!”

Huh? If it’s already been spent, then for all practical purposes, hasn’t the ceiling ALREADY been raised? Hasn’t some Congress, at some time in the recent past, said “We don’t care if we can only borrow $1000 from our creditors… we’re going to spend $2000!” By doing so, didn’t the spendthrifts take the action that actually RAISE our debt? Didn’t they say “screw the ceiling – we’re breaking through it!”

So, we’re not REALLY talking about the “debt ceiling.” By this logic, we already owe the money. What we’re debating is really the “What We’ll Pay Ceiling.”

Confusion #2: Didn’t Something Illegal Happen Along the Way? If a legally binding ceiling was in place when Congress voted to overspend it, wouldn’t their action necessarily be illegal?

Think of a debt ceiling as an “protection order” from a judge, prohibiting a stalker from coming within 500 feet of the stalkee. Can the stalker say “oh, to hell with the 500 feet… I’m getting within 400 feet, because I want to. The judge will just have to amend his order to make my encroachment legal.” Would a judge allow that? Or would crossing the 500-foot line remain illegal?

So then how are actions by Congress which leap over a legally enacted “debt ceiling” legal? Are we meant to expect that “oh well, the judge will just amend his order to make my illegal activity legal?”

Confusion #3: Why Isn’t the Government’s Credit Card Ever Declined? I’ve also heard the following explanation, from opponents of raising the ceiling: “It’s like you have a spending limit on your credit card, and you overspend it, and then call the credit card company and ask them to raise the limit.” That partially explains things.

I don’t know about you, but I remember my younger days when my ability to spend outstripped my ability to pay. If I had a “debt ceiling” of $1000 on a credit card, and I was maxed out but then tried to buy a new stereo or some other unneeded gadget, my credit card was declined by the merchant. I didn’t get the stereo until I paid down the card. It was an enforcement of an existing “debt ceiling.”

So where is the enforcement of our government’s “ceiling?” Who says “no?” to the Washington gadget-buyers? Nobody – and that’s the problem.

Confusion #4: Why would not raising the ceiling necessarily cause us to default. Can’t we spend less on current things? If the problem comes in our ability to pay on debt already purchased, then let’s cut back on things we HAVEN’T YET purchased! You know… like if you’re having trouble making your house payment, your first thought is to reduce your OTHER expenses, right? You cut HBO, or dinners out, or something else. Why can’t the government do this? You cut current expenses so that you can afford your mortage… you don’t raise the amount you can borrow.

So you see I’m confused. And apparently, so are a lot of people in Washington, D.C.