Trump's tax cuts are rocketing us into the debt ceiling
WASHINGTON -- The financial doomsday clock is ticking, and, thanks to the massive tax cuts passed by Congress in December, the ticks just sped up.
Unless Congress gets its act together, the federal government will default on its debt in a few short weeks. This event would set off a constitutional crisis and a global financial crisis. And it would be not some inevitable catastrophe but wholly man-made, created by an inept White House and a Congress too distracted, disorganized or greedy to act in the nation's best interest.
For the past century, Congress has imposed a statutory limit on how much the United States can borrow. In theory, this limit is supposed to impose fiscal discipline upon spendthrift politicians.
In practice, it does no such thing.
The debt ceiling doesn't actually restrict how much Congress can spend. It merely restricts the Treasury Department's ability to pay bills Congress has already incurred. Year after year, Congress has passed budgets that authorize spending well beyond expected revenue, then raised the debt ceiling so that Treasury can borrow to make up the shortfall.
As a result, the main role of the debt ceiling in recent years has been as political hostage. Every year or so, when it comes time to raise the debt limit, attention-seeking politicians demand concessions in exchange for their precious votes.
This strategy is attractive because everyone (well, almost everyone) knows that defaulting on our debt would be disastrous.
It would make the United States a deadbeat, jeopardizing our ability to continue paying basic obligations such as Social Security checks, military salaries and interest payments.
Not to mention that it would violate the Constitution, which says, "The validity of the public debt of the United States … shall not be questioned."
It would also send the global financial system into a tailspin.