America was once the world’s model democracy. Now it’s a global laughingstock with a government that can’t keep the lights on and is threatening to renege on its debts. How did this happen?
A lot of voters blame whichever political party they hate the most for the government shutdown and the looming debt-ceiling battle. But the seeds of the latest fiscal smackdown were sown almost a century ago, when Washington needed to raise a lot of money fast to finance World War I. In 1917, when Congress enacted new limits on the amount of debt the U.S. government could issue – a “debt ceiling” – it made federal spending easier, not harder, because it eliminated the need for Congress to approve every debt issuance one by one. Today, by contrast, the routine need to extend the debt ceiling has become a negotiating ploy, with politicians disrupting federal spending as a way to gain leverage on other policy issues.
The Treasury Department says it will run out of money around Oct. 17 if the federalRead More »from Here’s Why We Have a Debt Ceiling in the First Place