SHOULD YOU WORRY ABOUT THE NATIONAL DEBT CEILING CRISIS?

 I yesterday ended with this cartoon by Mike Lukovich:

Something terrible has happened to the Republican Party.  The root cause is Donald Trump.  

At one time, smart minds guided the Grand Old Party.  Today, the dregs of society control this organization.

That Trump coup attempt on 6January2021 was Act One.  Then consider all the legal problems facing him.  Add the mediocre competitors facing him.  I've long thought Ron DeSantis was an idiot governor, and nothing he has recently done has helped.  Are they doomed on 5 November 2024?

They still have two pathways for victory.  If Joe Biden gets seriously ill, that could become a problem for Democrats.  If the national economy crashes by the Fall of 2024, Republicans can cheer.  The one sure way this can occur, beginning now, Act Two, is to default on our national debt.  Sure the country will suffer, and if Republicans succeed, this will just be another way to discombobulate not only our economy, but the foundation of democracy and freedom.  

What might happen?

• The national and global financial markets will be rocked.  
• The stock market will crash.
• A serious recession will carry into 2025.

• 
  Social Security recipients might not get their checks on time.
• Federal workers, including the military, might not get paid.
• Medicare and Medicaid will be disrupted.
• Interest rates will shoot up, maybe to 20%.
• Housing will crash, for few could afford the mortgage, but has never defaulted.  Even then, this crisis made Standard & Poors downgrade the U.S. debt for the first time, the stock market sunk, with the Dow Jones Industrial Average losing 17% before and after the compromise.

Earlier this week Fortune said there's ZERO CHANCE the debt crisis isn't resolved.  Well, they were quoting Jeremy Siegel, professor of finance at Wharton.  Biden supposedly has a 14th Amendment solution he can use.  Something about the debt ceiling being unconstitutional.  One problem is that if Republicans contest the decision, this matter could get locked up in court up to the Supreme Court.

Anyway, Janet Yellen just said Congress has until June 5, not June 1, to agree.  Others say at least June 8.  From all reports, Congressional staff members are ironing out differences.  Better yet, with this agreement, the next debt ceiling crisis will not come until after the 2024 presidential election, probably the spring of 2025.  

From all reports, war (most call this defense) expenditures will be increased, while social spending will be reduced.  Why?  We already have a war budget as high as the next ten countries combined.  Sure, we got to help Ukraine, but we can do this without spending as much as the next ten nations with defense budget #2 to #11, combined.

What exactly is the U.S. debt ceiling?

• Simply, the debt ceiling is the maximum sum of money the U.S. Department of Treasury is authorized to pay our bills.
• The first ceiling was $49 billion in 1940.
• By 1945 this was up to $300 billion.

• 
  In 1946, the ceiling dropped to $275 billion.
• Was $1 trillion in 1981 and close to $10 trillion in 2007.

• 
  Congress raised the debt ceiling 90 times before the year 2000.
• The three most serious debt limit crises were in 2011, 2013 and 2021.
• Raised seven times during George W. Bush's 8-year term, and 11 times during Barack Obama's reign.

• 
  We now can't exceed a debt of $31.4 trillion, or 768 times the original amount in 1940
• The country actually reached that point on January 19, and "extraordinary measures" are keeping us afloat.
• We actually defaulted once, in 1979, but this was a technical bookkeeping glitch that was quickly rectified.

Mawar is back to being a Super Typhoon at 185 MPH. However, most projections show a beeline towards Taiwan, a weakening into a Category 2, with a right turn to the north, then a further directional move to the northeast away from Okinawa.  Japan?

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