📈Raising the Debt Roof
How real is the fight over the debt ceiling?
For a building with such a tall ceiling, Congress seems to spend an awful lot of time arguing about raising it. And while it does lead to some cool, albeit foreboding, pictures in the news, you are probably asking: what in the hell is a “Debt Ceiling”?
The United States debt ceiling is the maximum amount of debt the U.S. government can have at one time. The current level is approximately $28 trillion (with a “T”). The debt ceiling caps the amount the government can borrow to keep the country running and pay its bills.
Ironically, the debt ceiling was created in 1917 to allow the government to spend money more easily (not a typo), specifically to finance World War I. Before this, Congress had to individually approve additional spending which, as you can imagine, is a problem when you’re trying to fight a war (especially when you’re speaking via USPS). Initially created to help the government spend more efficiently, the debt ceiling worked well for decades until recently, where it has mutated into the political $hit show it is today.
We are currently in the middle of the 3rd “Debt Ceiling Crisis” in ten years. Basically, the issue has become a partisan cudgel, with one side using it to win concessions from the other. Last time, former President Trump wanted $5 billion for the wall and shut down the government for 35 days (the longest ever) before relenting. In this third round political game of chicken, Democrats want to pay for the Infrastructure bill while Republicans threaten to vote to default on our debt. Here’s the thing: it’s kabuki theatre. Ultimately, the debt ceiling will be raised because:
IT NEEDS TO (More on this in a minute)
NO ONE ACTUALLY CARES
If the United States defaults on its debt (doesn’t pay it), that’s a huge deal. Like, bigger than the biggest deal you can think of and would be the first time since the founding of our country that it happened. We’re not going to parse the chess moves by Congressional leadership (though GOP minority leader Mitch McConnell signaling his willingness to vote to default is… unsettling, to say the least) because a default won’t happen. Here’s why (even with $28 Trillion in debt) it’s not as big a deal as you might think:
If we break it down the United States to something more understandable, our country is just a high-performing rich dude/gal.
If you buy a $500k home, you typically owe $400k+ on the house, but no one says you’re in debt; you own your own home!
Now you get a big raise and want to buy a lake house for the Fam. You’re going to have more debt (let’s call it $200k), but you can afford the interest payments. So should you do it?
MAYBE! But YES you can afford it! If you pay all your debts on time and continue to earn more than you spend, having debt doesn’t mean you are broke. .
The same thing applies to the United States.
Is it in debt? Yes.
Can it afford it due to its citizens, natural resources, etc? YES!
What's the Upside?
The debt ceiling debate is overplayed, but it IS important. It affects our lives in more ways than we think. In the halls of Congress, mutually assured destruction should ensure we all live in peace, and if it doesn’t, we’ll be closely watching to help you with what to do instead.
In the meantime, enjoy your life, it’s football season.
For Your Weekend
This is where we’ll post a round-up of essays, podcasts, and streaming shows to check out over your weekend. We cast a wide net so you don’t have to.
Read:
“The Largest Autocracy on Earth” by Adrienne LaFrance (The Atlantic)
The hot-takes and think-pieces are coming fast and furious in the wake of the Wall Street Journal’s four-part expose of Facebook’s inner workings. The articles and podcasts are all worth consuming to understand how the largest social media platform in the world wrestles with its obligations to humankind and its bottom line. The Atlantic published one of the most cogent pieces this week.
[Facebook users] are… cogs in an immense social matrix, fleshy morsels of data to satisfy the advertisers that poured $54 billion into Facebook in the first half of 2021 alone—a sum that surpasses the gross domestic products of most nations on Earth.
GDP makes for a telling comparison, not just because it gestures at Facebook’s extraordinary power, but because it helps us see Facebook for what it really is. Facebook is not merely a website, or a platform, or a publisher, or a social network, or an online directory, or a corporation, or a utility. It is all of these things. But Facebook is also, effectively, a hostile foreign power.
Instagram, Facebook, and the Perils of “Sharenting” by Hua Hsu (The New Yorker)
As a follow-up to the story above, and in light of Facebook rolling out ‘Instagram for kids,’ read this 2019 essay by New Yorker contributor Hua Hsu. He discusses the trend of ‘sharenting’ and the potential implications for parents and children down the road.
Watch:
“Nine Perfect Strangers” (Hulu)
All hail Nicole Kidman, reigning Queen of the Prestige-TV Miniseries. Here, she plays a Russian businesswoman-turned-hippie guru with a secret. Her accent comes and goes, but the vibe is real. Over the eight-episode arc, nine people at an upscale rehab clinic go on an increasingly strange trip (literally) to confront their unresolved demons. The outstanding ensemble cast includes Melissa McCarthy, Michael Shannon, Luke Evans, and Bobby Cannavale.
Chuckle:
