July 30th, 2008The United States National Debt Limit Has Become A Joke
The recently passed housing rescue bill, along with hundreds of pages related to the massive housing bailout, also included a provision to increase the cap on the National Debt. It was certainly not the only random pork barrel provision completely unrelated to housing, but it is one that deserves special attention.
SEC. 3083. INCREASE IN STATUTORY LIMIT ON THE PUBLIC DEBT. Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $10,615,000,000,000.
The provision in section 3083 raises the ceiling on the United States national debt to $10.615 trillion by $800 billion dollars. The debt ceiling was previously set at $9.8 trillion dollars. The current national debt, as of July 30, is $9.54 trillion dollars, which stands under the limit of both the $9.8 trillion mark and the newly increased $10.6 trillion mark. To understand what the national debt ceiling is requires a brief look into history.
The United States first went into debt in 1790 as a result of Revolutionary War debts. And prior to World War I, the United States needed approval from congress every time it wanted to borrow money from the public. Because of the frequent overspending beyond tax revenues, and the resultant borrowing, it was thought impractical to require approval for every bond sale. So in 1917 the second liberty bond act placed a ceiling on the national debt. Any treasury operations that required increasing the debt could be performed without congressional approval, as long as the total outstanding national debt remained underneath the legally binding debt ceiling. The initial debt ceiling went in place at only $7.5 billion dollars, and has been increased countless times since.
The entire use of the term debt ceiling has been reduced to an anachronism. Our government continually spends more then it takes in from taxes, and when they get close to the preset maximum debt, they just increase the ceiling. But they are so embarrassed by the insanity of the ceiling, they are forced to hide the ceiling increase in unrelated housing bailout bills.
For related reading:
- The United States has not had a balanced budget since 1957
- CNN continues to report on budgets it does not understand
- Zimbabwe news overshadows U.S. fiscal problems