Sometimes bad news can be good news.
For example, maybe you’ve heard that our country is likely to smash through another debt ceiling this autumn. “Partially due to lower than expected tax receipts, the nation could reach the $16.4 trillion debt limit as early as late November, according to an analysis from the Bipartisan Policy Center,” The Hill reports.
That’s bad news for sure. It was just last summer that the U.S. government owed only $15.4 trillion (give or take a few billion). That extra trillion sure added up quickly. As an aside, if you counted one dollar per second, it would take you some 31,000 years to reach a trillion. Luckily, our federal government can spend money much faster than that, or else we probably wouldn’t even know what a trillion was.
Still, this bad news could have a bright side. As Andrew Malcolm reports at IBD, last year political leaders in both parties thought they’d, “bought enough time for the country to get through this fall’s presidential election before the next big debt-spending confrontation over raising the national limit.”
If the debt limit comes up in, say, September or October, that’s good news. Our political leaders would have to explain what, if anything, they intend to do to reduce debt. Then Americans would have the opportunity to vote based on that information. And that should be the entire point of having elected political representatives. They should, on the big issues of the day, pay attention to the will of the people.
Of course, that raises its own problems. What if what the people want is for the government to keep borrowing and borrowing to “give” them more stuff? That becomes a big problem, and it explains why the government can ring up trillions in debt so quickly.
“When you borrow a lot of money to create a false prosperity, you import the future into the present,” journalist Michael Lewis wrote in 2009. “It isn’t the actual future so much as some grotesque silicon version of it. Leverage buys you a glimpse of a prosperity you haven’t really earned.” He was writing about Iceland’s fiscal collapse. But it seems like an apt description of the U.S. government as well. Except our federal debt is exponentially larger than Iceland’s debt was.
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