The entire debt limit debate is a fraud. Nearly 6 trillion of the 14 trillion dollars included in the national debt is actually held by the Federal government through the Social Security Trust Fund, the Federal Reserve, etc. This is money we owe ourselves and is not debt in the sense we usually imagine it. Meanwhile commitments like future Social Security, Veterans and Medicare benefits are not carried as debts, nor are contingent liabilities like government guarantees for Fannie, Freddie, FHA, student loans, etc. carried as debts.
In other words we claim as debts money we owe ourselves, and we disregard all legal commitments and keep them from being listed as part of the “debt ceiling”. Since the “debt ceiling” is clearly a matter of definition all that is really required is to change the definition of debts included in calculating the “debt ceiling” to exclude obligations the Federal government owes itself. And voila 6 trillion in debt eliminated from the “debt ceiling”.
Frankly it speaks to the bizarre nature of the “debt ceiling” that excess Social Security taxes which have been paid into the Treasury and been used to purchase T bills are debts, whereas the future social security obligations which have not yet been collected are not debts. In other words, the more Social Security taxes we collect, the greater the national debt.
Another fun fact to consider: the Federal Reserve through Quantitative Easing has been buying huge quantities of federal debt — ostensibly to increase the money supply and provide liquidity, so much so that they now hold nearly 2 trillion in federal debt or roughly 1 dollar out of every 7 that we owe. They could theoretically go into the open market and purchase the remaining 8 trillion in outstanding Federal debt leaving us owing all of our debts to ourselves and having exactly the same debt level as today when calculated by the “debt ceiling”.
THESE ARE ALL ACCOUNTING GAMES (full of sound and fury and signifying nothing).
The substance of the entire shell game is to provide the pretext to gut Social Security, Medicare, and Medicaid — our social insurance programs and turn them into welfare programs.