You see the debt limit is just how much debt the US government is allowed to get into, it seems simple on the surface but gets deeper. Because the debt limit is the most dangerous political tool in the world.
To understand the debt limit you need to know about American taxes as a whole and the way they spend those are decided by the president and congress and each has their specific jobs.
The president’s job when it comes to money is to collect taxes and spend them on the government in whatever the country needs. But this does not mean he has full control over the money in the country.
And congresses job is to set taxes and decide how much to spend and they order the president around like a puppet because they decide how much the president must spend that year no matter what.
This happens because Congress makes the budget and decides what the country needs then they write the budget give it to the president and by law he must follow it and can’t save a dollar.
But if more taxes come in than money spent everything should be fine, but congress intestinally puts more money in the budget than taxes collected which means the president must borrow the difference.
This scares many people like Mark Zandi who said this “We need to get rid of the debt ceiling law. It’s anachronistic and it’s a problem.” This isn’t a problem for any county but the USA.
because if the congress in the Uk, for example, needs more money congress will fund it themselves but, in the USA, congress limits the about the president can borrow too which is what the debt limit is at its most basic level.
And it seems good until you see the real-world consequences of these two conflicting forces because as the president gets close to the debt limit congress acts shocked at the president’s reckless spending.
And the president did indeed borrow that money but it’s because congress forced the president to so it’s a game of stop hitting yourself but more deadly for everybody watching. After all, it’s not about future spending.
The limit is about paying bills they already have. So, if they’re at the debt limit the government would shut down because if they can’t spend money, they can’t do anything, and this is a global issue.
As stated in this quote by Michele Bachmann “I think it’s important that people know what raising the debt ceiling is. It’s Congress giving permission to the federal government to borrow more money that we don’t have, and we borrow it to spend it.”
Because the U.S. dollar is used globally, and many countries rely on it being stable but there is a way out because if approved Congress can raise the debt limit so that congress can force the president into more debt.
But why do this? Well, leverage for congress the debt limit is amazing because it’s a problem they create, and they can just blame the president and the president can only solve the issue with congress.
And many are afraid of the future of the country if this is how the debt problem is solved. Like Bob Corker that said, “If it took multiple debt ceiling hikes, I’d rather achieve the savings.”