I think they could have kept it where it was. The people saying we would default on our debts if it wasn't raised (taxes too), were either wrong or using scare tactics. If nothing was done, we would have had a short shut down as they figured a new budget. One thing that wouldn't have stopped is the debt payments. I think cuts could have been made to balance the budget and pay debts without raising taxes. Like a lot of people say, the government needs to learn to live off what it takes in.
Could you clarify the italicized part, please? From what I presently know (which is admittedly not extensive, and might not be accurate), not having a working budget implies that all payments, including debt payments, cease until a new budget is agreed upon (as without a budget, the available money, if any, is not allocated). What makes debt payments distinct from other governmental expenses in this respect? Or is there something else that I'm missing?
(*just confirmed his assumption on what a debt ceiling was from a Google search...*)
The U.S. government will never pay back its debt, but that's okay, because nobody expects it to. The government gets into debt by selling bonds to people to raise money. It pays back its bonds by selling more bonds to other people. As long as people keep buying bonds, it all works out perfectly.
That description makes US bonds sound disturbingly like a
Ponzi scheme. I could see the possible argument, though, that a (fiscally responsible) government with more working capital at the present could benefit the country's economy (and thus tax revenue) enough to pay back more than the borrowed amount through the extra revenue, even without accounting for inflation.
When I got my first credit card, my "debt ceiling" was $5000; then they rose to $7000 then $10,000the up to $19000 at the same time I sent and spent above my means. I was making $22.00 an hour. This job was going to go permanent, so I can always pay it back. When I got laid off and found a 17.00 temp job then more layoffs. My debt is in default now I have $22,000 in debt. I had to cut back and stop spending more I made. I am going the Dave Ramey route and slowly recovering my life.
The moral of the story is deficit spending was not good for me, then how is good for our nation?
Dave Ramsey's videos were actually a required Senior level class in my high school, and I particularly enjoyed his lessons. I hope they're working out reasonably well for you.