Debt ceiling: will they or won’t they?

“The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” — The U.S. Constitution’s 14th Amendment. (Emphasis added)

Too often, the debate over raising the debt limit (the maximum amount the United States is allowed to borrow to pay its debts) turns into a political football when it isn’t political at all. Some argue the 14th Amendment doesn’t say what it does, but you read it and decide.

This year may be the most political it’s become in history, though, as Senate Minority Leader Mitch McConnell has pronounced Republicans will not support an extension of the debt limit. Since to overcome a filibuster the Democrats would need to get 60 votes to overcome a filibuster (they only have 50) the likelihood at the moment is the debt limit will not be extended.

Not raising the debt limit is like you not paying your bills. In the U.S. Government’s case, the “bills” include things like Social Security payments, aid to folks hit hardest by the pandemic or hurricanes, the military wouldn’t be paid nor would federal employees. Anything paid by the federal government could not be paid and we, as you would in your financial life, default.

There are those would say, “Great! Those federal employees don’t do anything anyway.” But those employees, among other things, pay our bills. If, as is looking more likely than in past years, McConnell maintains control of Senate Republicans. All that is going to happen.

The debt ceiling was raised 72 times from March 1961 to May 2011, including 18 times under Ronald Reagan, eight times under Bill Clinton, seven times under George W. Bush, and five times under Barack Obama.

You really have no choice but to raise it. The ceiling is raised so the U.S. can pay the money it’s already spent. It has nothing to do with future spending. It forces no control on future spending. Republican and Democratic presidents have contributed to the debt and the Congress has approved every dollar spent that led to us owing trillions of dollars.

Treasury Secretary Janet Yellen, who also has served as head of the Federal Reserve, wrote in a Wall Street Journal piece last weekend: “Default could trigger a spike in interest rates, a steep drop in stock market prices and other financial turmoil. Our current economic…