What is a Debt Ceiling?

The Debt Ceiling deal was announced yesterday by a very tired looking Obama. Somewhere in the back rooms of Washington D.C. there was high fiving and back slapping. Nancy Pelosi’s face moved… slightly. Dick Durbin belched. But what exactly does the debt ceiling deal accomplish?

Well if you listen to the politicians with the deal we can now pay our bills, the treasury department can start printing money again!

But underneath it all what does it really do?

                "In reaching this agreement, each political party yielded to the other party's highest-priority political and ideological interest," and fails to resolve the country's long-term budget problems, Sen. Joe Lieberman (I-Conn.) said Monday.

So this was about political parties digging in? What about us, the American people? You know us, those who control (supposedly) the government by electoral process? What does it do for us?

Well… um… that’s the thing… not much. This country has a budget of around 3.7 Trillion Dollars. The cuts to that budget amount to somewhere in the neighborhood of $21 Billion dollars for this year, or less than 1%. In 2010, according to U.S. Federal Receipts the Government took in approximately $2.16 Trillion in Tax Revenues. That’s all the money they get, they spent approximately $3.46 Trillion using my handy dandy math skills beaten into meat by Sister Ann Lucille that makes for $1.3 Trillion in debt added to the already growing national debt… in one year!

In the year I was born our national debt was $ 370 Billion, total so in one year we put approximately 4 times that number on our national debt!

Now do not think that I am above letting both sides of the political spectrum get away without fault being throw their way. I think Ronald Reagan was one of the strongest presidents of all time, however under his watch the national debt climbed alarmingly from around $900 Billion dollars to around $2.6 Trillion dollars, and this was from a president that demanded a smaller government and was “conservative”. Yes he made our country stronger, yes he was instrumental in tearing down the Berlin Wall, mostly by funding a covert action in Afghanistan to help mire the Soviets in a endless war, by sending weapons into Pakistan and having the CIA and Pakistani people work with Afghani rebels to arm them, and yes that does cost money, it essentially crippled the Soviets, but it also heap a huge burden on the next generations of Americans.

Bush the senior was not any better taking over a national debt of $2.6 and growing it in only 4 years to around 4 Trillion. Yes there was the first Gulf War. I’m starting to see that war is costly! Imagine the debt in 1976, the 200^th anniversary of our country was $620 Billion, so in 200 years our country was in debt by $620 Billion in the next 16 years through the presidencies of Carter, Reagan and Bush we succeeded in overspending another $3.38 Trillion dollars! The first 200 years we over spent an average of 3.1 Billion dollars per year, the next 16 we overspent by an average of $211 Billion dollars per year! That’s an enormous jump folks! I will admit that the Clinton years our national debt did not rise much, a balanced budget does that, it only rose slightly and I would assume that is due to interest. Bush the Junior left office with our Country in debt around $10 Trillion and now Obama has raised that debt to over $13.5 Trillion. Yes, again I understand we are in wars, we have been attacked and we must be vigilant against terrorism. Economic downfalls also have had a major role in the debt. But what exactly does raising the debt ceiling have to do with economic prosperity? It doesn’t.

What is the debt ceiling? It’s a cloudy number that the government can’t spend past what it takes in. This law took effect in 1917 and the number has been raised many, many times. If our government didn’t raise the debt ceiling it couldn’t spend more money. It would have to wait until more money was in their coffers before they could write checks. This sound familiar to me… kind of like when I have to wait for my check to pay my bills. If I spend more than my check I have to go into debt, how much I wish to go into debt is my own personal debt ceiling.

I think it is time to look to electing brave, fiscally responsible politicians who are going to balance our budget and even start paying down our debt, just what is the interest accrued on $13.5 Trillion?

Sources for this came from FoxNews, CNN Money, Los Angeles Times, NPR, and several government agencies.