by: Clint Siegner
Washington DC politicians are busy cobbling together yet another bi-partisan bill to raise the federal borrowing limit.
Congress imposed the debt ceiling on itself in 1917.
Democrats and Republicans have worked together to circumvent it ever since.
Borrowing and spending more money is one area where politicians always manage to find common ground – even when there is some occasional government shut-down theater.
The latest dramatic production is underway now. As theater goes, the plot is totally predictable, and so is the ending.
Republicans are once again playing the role of stalwart budget conservatives. They wring their hands and blame Democrats for the out-of-control spending and multi-trillion-dollar deficits, even though Republicans lifted the debt ceiling three times under President Trump.
Meanwhile, Democrats play the role of responsible adults, forced to contend with reckless obstructionists across the aisle. They assert the US must always pay its bills and maintain its sterling credit rating, and that borrowing more is how to do that.
How is the “responsible” thing to continually raise the credit card limit for the most indebted government in world history?
Politicians have literally been running through the same script for decades and confidence in the federal government is currently in freefall. It isn’t clear how many people are still falling for this charade.
Technically, the Democrats have the ability to do it all without any Republicans. But whether some grand deal is reached or not, the losers will be Americans at large and the generations who come after, as Congress saddles us all with a few trillion dollars more in debt.
There are consequences for the U.S. dollar, the Treasury markets, and for the confidence underpinning both. As trust in the government’s proliferation of paper promises continues exponential growth, hard money – gold and silver – will provide a safe haven.