October 16, 2013
If you’re listening to the news lately, you could be forgiven for thinking that America “needs” to extend its line of credit by raising the debt ceiling again. This is an absolute mockery of economic planning. Does anyone still think it will actually improve our situation?
The most astonishing part is the fact that pundits are talking about raising the debt ceiling in units of time! It used to be described as an increase of however many billions of dollars. This latest plan will raise the ceiling until “February” or thereabouts, whatever that is supposed to mean. Do you realize the dollar figure isn’t mentioned anymore because it has become so embarrassing that people don’t want to acknowledge it?
I can’t get over how ridiculous the whole thing has become. It’s like if a drug addict was asking me to borrow money and saying, “With this I should be good until Tuesday.” How can a person not conclude that they will in fact be wasting it on more drugs? Yet we keep handing over cash for the next fix like a bunch of ashamed tourists.
Unfortunately, the only rational thing to do is to go cold turkey as soon as possible. Banks are now basically being paid to sit on over $1.8 trillion in “excess reserves” provided by our national borrowing binge. However many more fixes these junkies can score, when equilibrium is finally restored the withdrawal is going to be pretty intense.
What a stupid, pointless debate.
UPDATE: It turns out that the “February” language is not just a media euphemism, it’s actually the letter of the law! America has effectively deemed itself worthy of unlimited credit until the provision expires early next year.