Some people are concerned about how the U.S. national debt will affect their children. Or their grandchildren. True, it’s a bad thought; but things are worse than you might think.
Because it’s about to get very ugly. According to Treasury Secretary Janet Yellen, the nation will be flat broke in October.
October! As in next month.
If Congress does not increase the debt ceiling, the country will not be able to service its debt, Yellen said Wednesday in a letter to Congress. The secretary noted there’s a severe threat to the economy.
“Once all available measures and cash on hand are fully exhausted, the United States of America would be unable to meet its obligations for the first time in our history,” Yellen wrote.
When the treasury secretary fully writes out “United States of America” in a letter to Congress, it’s like your mother sharply addressing you by your first, middle and last name.
As is the secretary in her letter: “Based on our best and most recent information, the most likely outcome is that cash and extraordinary measures will be exhausted during the month of October.”
Earlier instances of the congressional raising of the debt ceiling have taken time, Yellen said, and delaying now could “cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.
“A delay that calls into question the federal government’s ability to meet all its obligations would likely cause irreparable damage to the U.S. economy and global financial markets,” she said.
“At a time when American families, communities, and businesses are still suffering from the effects of the ongoing global pandemic, it would be particularly irresponsible to put the full faith and credit of the United States at risk.”
Republicans won’t approve a debt ceiling increase, according to Axios, arguing that raising the ceiling will only encourage more wasteful government spending. Senate Minority Leader Mitch McConnell said Democrats can fold it into their $3.5 trillion budget reconciliation bill.
Reconciliations only require majority votes in both the House and Senate, meaning Republicans can’t filibuster the bill in the Senate. Axios noted including the debt ceiling increase in the reconciliation package would allow McConnell to point to Democrats as having taken on the debt, however, Yellen wants no part of that. The treasury secretary instead advocated for raising the ceiling “through regular order, with broad bipartisan support.”
While McConnell may get the optics of Democrats underwriting debt-driven spending, who ultimately pays the bill? (Hint: See the first line of this commentary).
Another Axios report noted the White House wants the federal debt limit raised or suspended until a later time. Oh, and the White House is also trying to say this whole debt problem is … wait for it … former President Donald Trump’s fault.
After all, wasn’t 97 percent of the national debt in place before President Joe Biden took office?
Newsflash: Spending and debt have been ways of life for a long time — long before Trump came on the scene. It would be easy to blame Congress for spending like drunken sailors but that would be libeling drunken sailors.
Presumably, there will be some tap-dancing, maneuvering, horse-trading and other dark things going on in Washington so that somehow in October there will be a way to keep the lights on and service the debt.
With the government’s craziness in its handling of COVID-19, growing inflation, employers begging for workers and the obscenity that is the abandonment of Americans and allies in Afghanistan, one more problem joins the list of national misery: no more money in October.
It brings to mind a quote by Casey Stengel, colorful manager of the legendary 1950s New York Yankees: “Can’t anybody here play this game?”
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