35
votes
What is the theory behind using the 14th Amendment to ignore the debt ceiling?
The debt ceiling fight is about funding and permitting the government to pay for costs and debts that have already been incurred by prior duly passed legislation. It is not, intrinsically, a fight ...
- 16.5k
30
votes
Why is it considered controversial to reduce budget deficits instead of raising the debt ceiling?
The debt ceiling is an accounting technicality that is being hijacked by the Republicans to gridlock the political process.
First, Congress authorizes a budget with spending programs and tax laws for ...
- 106k
26
votes
Accepted
Why all the warnings about failure to raise the U.S. debt ceiling when some argue that Biden could just ignore it?
Most people understand that the President can't "just ignore it".
We would be legally uncharted territory if the President ignored the debt ceiling. (Informal) precedent is against ...
- 115k
24
votes
Does Japan have any reason to ever repay its debt?
You can't go into debt when there is nobody who is willing to lend you money.
When a country doesn't repay its debts, then the bag-holders are the organizations and private people who lent money to ...
- 74.8k
23
votes
Why is it considered controversial to reduce budget deficits instead of raising the debt ceiling?
Complaining about budget deficits, by the Reps, seems to be height of hypocrisy.
How the 2017 Tax Act Affects CBO’s Projections (note those are Trump 2017 tax cuts):
What Are the Act’s Projected ...
20
votes
Why didn't Democrats get rid of the debt ceiling while they were in power?
Because they had 50 senators, not 52.
Senators Manchin and Sinema opposed large parts of the Democrats’ agenda, despite being members of the party (at the time, in the case of Sinema). That starkly ...
- 3,359
18
votes
Accepted
Why didn't Democrats get rid of the debt ceiling while they were in power?
Q: Why didn't Democrats get rid of the debt ceiling while they were in power?
In the latest round (2022), some House Democrats floated the idea, but it didn't get much traction. More to the point, ...
- 34.4k
16
votes
Why all the warnings about failure to raise the U.S. debt ceiling when some argue that Biden could just ignore it?
To clarify what Prof. Hockett is talking about, we're looking at this subchapter of Title 2, specifically sections 682-684. Summarizing, these sections essentially say that the President cannot ...
- 9,056
15
votes
Accepted
What is the theory behind using the 14th Amendment to ignore the debt ceiling?
zibadawa timmy's answer is basically correct, that is the theory. To add some quotes from someone detailing it (in NYT):
The theory builds on Section 4 of the 14th Amendment to argue that Congress, ...
- 146k
14
votes
Why all the warnings about failure to raise the U.S. debt ceiling when some argue that Biden could just ignore it?
This is one of those things where the executive branch does not want a battle with the legislative branch, with the ultimate answer inevitably coming from the Supreme Court. Nobody sane wants the ...
- 12.6k
12
votes
Does Japan have any reason to ever repay its debt?
A small detail, not repaying debts means a default. But Japan can try to repay old debts by taking new debts.
There is a widespread consensus that having some government bonds on the market is a good ...
- 106k
10
votes
Why is it considered controversial to reduce budget deficits instead of raising the debt ceiling?
It is considered controversial because we are talking about debt that the United States already owes and there should not be any debates over paying the what we owe. Spending does need to be addressed ...
- 15.4k
10
votes
Why is it considered controversial to reduce budget deficits instead of raising the debt ceiling?
Why is raising the debt ceiling the only option to solve this issue?
The money has already been allocated. If we don't pay it, then we would be defaulting on our debts. If your question is then "...
- 7,903
8
votes
How is China's municipal debt problem different from that of the U.S.?
How is China's municipal debt problem different from that of the U.S.?
I heard that most of the local government debt is off-the-book. Is
this the case for the U.S. also, which also somewhat has a ...
- 73.8k
8
votes
Does Japan have any reason to ever repay its debt?
Does Japan have any reason to ever repay its debt?
I would distinguish between ever repaying any particular debt, which it does on a routine basis, and ever becoming completely government debt free, ...
- 73.8k
6
votes
Accepted
How can central government intervene when a council declares itself bankrupt?
Section 114 is often described as "bankruptcy", but legally it is different.
It is a notice that the Finance Officer of the council makes (without requiring the consent of the councillors). ...
- 115k
6
votes
Why is it considered controversial to reduce budget deficits instead of raising the debt ceiling?
Why is it seen as controversial to reduce expenses to the point where the debt ceiling no longer needs to be raised?
Because people cannot agree on whether to raise taxes or cut spendings in order to ...
- 9,604
5
votes
Why is it considered controversial to reduce budget deficits instead of raising the debt ceiling?
I don't remember the exact book I read it in, but I definitely read it somewhere:
Everyone wants to have a balanced budget (here meaning reduce interest payments on already-issued debt). The problem ...
- 32.4k
4
votes
Accepted
US Census Survey doesn't seem to ask about most debt-- How is US Gov't getting debt info?
Through the Consumer Financial Protection Bureau (CFPB) and other regulatory agencies.
The government doesn't have a detailed picture down to the individual level. They do have an aggregate picture.
...
- 3,112
3
votes
social security vs debt ceiling
According to Wikipedia, as of 2022, the "trust fund" for social security was owed $2.7 trillion. The rest of the government basically "borrows" from the fund in order to be able to ...
- 1,600
3
votes
Why is it considered controversial to reduce budget deficits instead of raising the debt ceiling?
Failure to raise the debt ceiling provides a way for the US government to renege on promises to which it has already agreed. Consider someone who owes a lot of money to a mob boss for a gambling ...
- 12.6k
3
votes
Accepted
Is there a way to determine if a country engages in debt-trap diplomacy?
"Debt-trap diplomacy" is the political process to use the indebtedness of a debtor country to earn favours or get political concessions out of them.
"The world has become divided into ...
- 6,829
2
votes
How much in interest payments since 2002 has the increase in the debt past the old debt ceiling cost the US?
First, it's about the actual debt not the debt ceiling and second as a frame challenge to the "cost the US" phrase, you'll have to take into account positive effects from increased borrowing ...
- 9,604
2
votes
Can someone explain the debt ceiling clearly?
It is just the maximum amount that the US can borrow by issuing bonds and has no impact on what the US can spend.
U.S. Debt Ceiling: Definition, History, Pros, Cons, Clashes
The debt ceiling is the ...
- 15.4k
2
votes
Does Japan have any reason to ever repay its debt?
Yes, should Japan ever default on its debt, the following would happen
The central bank would default
many life insurances (hold 20% of the dept would default)
Potentially banks would default (hold ...
- 195
1
vote
Does Japan have any reason to ever repay its debt?
It works until it doesn't
As long as people are willing to buy Japanese government debt, there's no problem and they can keep issuing debt for whatever purpose.
But if one day they stop - and anyone ...
- 32.4k
1
vote
Apples-to-apples comparison of the public debt structure in the US vs. China
I'm not entirely sure of the methodology/soundness of this, but according to one Chinese economist:
The leverage ratio of the Chinese government is currently around 100%, which is significantly lower ...
- 146k
Only top scored, non community-wiki answers of a minimum length are eligible