Because there is no alternative. The USA could produce a balanced budget where tax equals spend, and this would help somewhat. But it is not going to solve the immediate problem.
The big issue is bonds that need repaying ...
There is no short-term solution whatsoever.
I agree. Funny that Jason and I can agree on the US position but disagree on what the UK should do. But even in the Uk we agree there is no alternative to keep borrowing. Maybe here we agree because the Uk went through the defence spending crisis 100 years ago. Its taken that long to wind down our military spending. The US cannot afford to be at war. The one silver lining to raised US taxes is that it will allow other counrtries to raise taxes too. Thus preserving US competitiveness. The whole world needs to raise tax rates.
The debt ceiling is similar to the limit on a credit card. Once you hit the limit generally the CC company says pay what you owe and then you can spend again. Unless you are the US government. Then you just continue to increase the debt ceiling which means you then increase spending to yet again have the need to increase the debt ceiling. So please tell us why its a good idea to increase the debt ceiling so this country can fall further into debt????
because a sovereign government is unique and its finances do not work like a family budget. A better analogy would be a family living next to the fed printing works where they print dollar bills, and having a loose brick in the back wall where the house backs onto their print storage area. So when you reach your spending limit...why just move the brick and 'borrow' a bit more. Its not as if they will ever have to pay it back.
seriously, thats how it works. All that Quantum easing, what did you think it was for? The FED has been buying up government debt nearly as fast as it is being created. It isnt 'out there' waiting to be repayed, or a huge amount isnt.
Ok, this is a sleight of hand. Printing money dilutes the value of existing money, so what all this financial nonsense amounts to is really tax by another name. better to have taxed honestly to begin with, but the politicians didnt like that idea.
THAT is what this is about. Congress, CONGRESS, budgeted, allocated and spent the money.... Now they don't want to pay the bills.
As Jason outlined, they cannot pay the bills. Either the US borrows or it goes bust. yes, this IS the fault of past politicians but saying that does not change the current situation.