I know I've written about this endlessly in the five years I've been blogging, but I'm pretty sure I have a lot of new readers and I have to assume they haven't read the many posts I've done on this. (Example from four years ago) Let me recap a little.
First, although they're going to make a big deal about the debt ceiling, I believe that the US effectively doesn't have a ceiling at all. I say that because there isn't one time in history that we've held the debt ceiling in place. Whenever it comes up, our
- This is all theater
- They're going to raise the ceiling because they don't have the restraint of a drunken sailor, who, after all, stops drinking when he's broke.
- The government is not really going to shut down and it absolutely isn't going to get smaller in any meaningful sense because to do that would hurt the ruling class.
- Corollary: the only way the government shuts down is if one side or other believes they get a lot of political points by doing so. I actually think the president wants a shutdown so that he can shame and blame the Stupid party. The Stupid party is actually so stupid they think they can make points in the press that it's the president shutting it down.
- The president says that these discussions may lead to another 2008 economic crisis: find me someone who says debt ceiling discussions had anything to do with it. As you can see from the above graph, the debt ceiling ratcheted up without interruption throughout that time period.
- This only ends when the world decides to stop putting up with our stupidity and stops using dollars. This is not just theoretically possible, all the major players are moving in that direction now. That could happen this year or not for a few years to come.