Once upon a time, the deficit spending was thought to be constrained by something called the “debt ceiling”…
Once upon a time, the deficit spending of the U.S. government was thought to be constrained by something called the “debt ceiling”. That this notion still holds in the mainstream media is the subject of this post.
Again, there was a time when there was at least the appearance of a “debt ceiling”. The U.S. Congress, with presidential approval, would pass budgets with a fiscal deficit. This ongoing deficit would annually increase the total outstanding government debt. In an attempt to slow the growth of the total debt, a “debt ceiling” was put into place.
This “debt ceiling” notion created a dollar limit beyond which the government could not borrow. In the days prior to the Great Financial Crisis, the debates surrounding an increase of this borrowing and “debt ceiling” were largely ignored. Again, though, that was BEFORE The Great Financial Crisis.
Then, with the economic collapse that followed and the installation of Barack Obama as president, the public concern over the debt soared nearly as quickly as the absolute size of it. Do you recall the era of the “Tea Party” and the Gadsden flag? Well, this got the attention of the politicians, and they were quick to make a VERY important change to the entire debt ceiling issue.
Here’s how it went down…
In the months following the Great Financial Crisis, the massive U.S. fiscal deficit was rising fast. Faced with a hard number debt ceiling, the politicians in Washington soon found themselves having to raise the ceiling every six months or so. They’d raise it by $500,000,000,000 in April and then have to come back and raise it by another $500,000,000,000 as soon as October. Well, the American people soon took notice of the ongoing debacle and began asking questions… questions like:
“Wait a minute. Hold on just a second. Didn’t you clowns in DC just raise the ceiling by half a billion dollars six months ago? And now you already need to raise it again? What the heck is going on down there? This spending is out of control!”
So, just as the American people were waking up to the magnitude of the fiscal and monetary disaster that their politicians had created, these same politicians simply changed the definition of the purported “debt ceiling”. And so now, in 2019, what’s touted as a hard “debt ceiling” is not a dollar-based limit by any stretch of the imagination. Instead, the U.S. “debt ceiling” is now simply a date on the calendar beyond which the U.S. treasury can no longer borrow money. (This is a scam too, of course, as the Secretary of the Treasury has all sorts of emergency powers to use in order to avoid any sort of potential default.)
So, when you see links such as this…
…you must understand that the only “bi-partisan solution” that was reached was an extension of the date through which the U.S. can freely borrow and head deeper into debt. There is no “you can only ago another $500,000,000,000 deeper into debt” anymore. There is now only “spend all you want through 2021”.
And why does this matter? Because it reveals the complete lack of any fiscal restraint in Washington, DC. The American politicians will NEVER allow themselves to be constrained by fiscal responsibility, and in fact, the madness of what’s called “Modern Monetary Theory” is what awaits us all in years to come. Human history shows that ALL unbacked paper currency regimes eventually devalue to zero. Political lust to provide both “guns and butter” to the willing dupes of their constituency seals the issuing government’s fate.
The chart below bears this out as well. As the price of gold in dollars now heads to new all-time highs, the unlimited growth of the accumulated U.S. debt will be a driving factor.
And so, please don’t allow yourself to be fooled by the politicians and their willing accomplices in the mainstream media. There is no “debt ceiling”, and the lack of any fiscal restraint—not just in the United States, but globally—speeds the demise of the current monetary structure.
Your best protection against this madness continues to be the accumulation of physical precious metal. Do not delay in creating, or adding to, your personal stack.