You may hear it called the ‘debt limit' or ‘debt ceiling' or ‘debt cap,' but usually you don't hear about it at all because most people in Washington don't like to talk about it. It's the maximum amount of money the United States can borrow. And that maximum is set by Congress.
Until Congress votes another rise, that maximum is set at $8.184 trillion. The White House wants to raise the limit to $8.961 trillion. Are you still reading? These are numbers so big they defy imagination. On seeing them, the mind stops. Eyes glaze over. We're talking about a sum of money that's almost 90 percent of America's entire gross domestic product this year.
The White House wants Congress to raise the limit because the nation is going deeper into debt. We're going deeper into debt because the government continues to spend more than it's receiving back in taxes. If Congress doesn't raise the debt limit, the United States can't borrow more money, the Treasury can't auction off the next batch of ten-year notes, and the U.S. would default on its obligations. This would not be a pretty picture. A default by the United States would be the end of financial civilization as we know it.
So of course Congress will raise the debt limit. But it's embarrassing to members of Congress. They like to talk about being fiscally responsible yet the budget is so obviously out of control. It would be especially embarrassing if they had to record their votes. A mid-term election is coming up in seven months, and who wants to be on record in favor of raising the national debt?
There's also the inconvenient historic fact that a little more than a decade ago, when a Democrat was in the White House, Republican congressional leaders refused to raise the debt limit until they got an iron-clad promise that the budget would be balanced. And it was. But this time nobody expects the budget to get anywhere near balance for years to come, if ever.
It's another Washington song and dance. Sing the song of fiscal responsibility. Dance in the other direction.
The irony is that a larger national debt would not be bad if the extra money we borrowed was spent on making Americans more productive. If we were healthier and better educated and better prepared, in future years we could repay the debt and also enjoy a higher standard of living.
The real tragedy is the extra borrowing isn't for any of this. In fact, the federal government is cutting back on education and skimping on child health.
The extra money is for a bloated military budget, a badly-thought out Medicare drug benefit, an engorged subsidy to big agriculture, and a slag heap of pork and corporate welfare such as was doled out in last summer's energy and highway bills.
And on top of all this, the White House wants to extend forever those 2001 and 2003 tax cuts, mainly for the wealthy, that still haven't boosted investment or trickled downward, and never will.
The debt limit will be raised as quietly as possible because almost no one in Washington wants to talk about how much we as a nation owe, how badly we're spending what we're borrowing, and how much of our future we're squandering as a result.
Robert B. Reich is co-founder of The American Prospect. A version of this column originally appeared on Marketplace.
