FRICTION TAPE

Inspired by agitators

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A Quick Debt Ceiling Primer for Laymen

I just received the following question via text message from a friend who doesn’t follow national politics very closely:

What happens if the government goes into default on our loans? Can the Chinese then ship the Capitol building to Beijing? Do they get to start charging admission to our national monuments? Admission payable only in yen? And when I see stats that say the deficit works out to $54k per citizen, shouldn’t the debt amount only be divided by the number of legislators who sold our asses to start with?

There’s a lot packed in there, but I wanted to specifically address the questions about defaulting on the national debt because they pertain to the looming debt ceiling fight. It’s a sad question for me to read, because it means the Obama messaging machine (the only thing this president is good at is messaging; we’ve known that since 2007) is winning the narrative war over the debt ceiling when someone who doesn’t follow national politics very closely frames the question that way.

The short answer is that we won’t default on our loans. The debt ceiling debate has nothing to do with whether or not the United States will default on its debt to foreign bondholders.

Each year, the United States government spends roughly $4.5 trillion, with roughly a third going to (a) service on the national debt (pretty much through interest payments only), (b) what’s called “mandatory spending” (in other words, entitlements like Medicare and Social Security), and (c) what’s called “discretionary spending” (in other words, spending on pretty much everything else, from corn subsidies and Navy ships to SNAP benefits and federal employee salaries; this is why the government is currently shut down … House Republicans tied annual discretionary spending authorizations and appropriations to a one-year delay of Obamacare implementation, and the Democrats aren’t going to play ball on that). The interest payments the United States has been making on those bonds held by foreign investors have, so far, been enough to prevent them from coming to call on the principal investment. Bonds are meant to be low-yield, safe, long-term investments anyway.

The debt ceiling is a statutory limit on the amount of money the United States Treasury can borrow from the world market by selling bonds in a given year. Treasury raises money through this practice for the purpose of raising money to pay for programs Congress created with legislation, and the president enacted with his signature. Both Congress and the president like this type of funding of government spending because it allows both to demonstrate value to tax payers through public expenditures without ever having to raise taxes on citizens to pay for those programs. Whether you’re a Democrat or a Republican voter, odds are that you will oppose a representative who raises your taxes come Election Day.

So the question isn’t whether we’ll default on the national debt if we don’t raise the debt ceiling; it’s whether or not politicians will get to have their cake and eat it too if Treasury can’t borrow enough money to pay for everything elected officials think the government should pay for as expressed through legislation.

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The broader problem isn’t the statutory cap on how much money Treasury can borrow in a year; the broader problem is how many programs the government wants to try to run. Neither Republicans nor Democrats want to pay a political price for raising taxes, and frankly, it’s not all that clear that Republicans want to limit the number of programs the government should try to run, for all the lip service party members pay to “reducing the size and scope of government,” or to Reagan’s three favorite bogeymen, “waste, fraud, and abuse.” The Republican Party (absent Rick Perry, and even he struggled with it in presidential primary debates) can’t really name much of anything in terms of programs they actually want to end. That’s smart politics to not box yourselves in and paint a target on your back for Democrats to pound … but current fiscal policy is unsustainable.

The shutdown is the product of a policy rider (Obamacare delay) that is a wedge issue between the two parties being attached to the funding of already-enacted government programs. The debt ceiling is a separate issue from the shutdown.

Further questions from non-political friends welcome.

Cartoon via Mark J. Perry

Filed under debt ceiling government shutdown Republican Democrat Obama China

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A Very #ConferenceIII Fantasy Roster

Today I drafted the following team, and it’s pretty Central Division heavy:

Center

  • Jonathan Toews (CHI)
  • Jeff Carter (LA)
  • Damien Brunner (NJ)

Left Wing

  • Pascal Dupuis (PIT)
  • Dustin Brown (LA)
  • Brandon Saad (CHI)

Right Wing

  • Michael Ryder (NJ)
  • Vladimir Tarasenko (STL)
  • Alexandre Burrows (VAN)

Defense

  • Shea Weber (NSH)
  • Ryan Suter (MIN)
  • François Beauchemin (ANA)
  • Michal Roszival (CHI)
  • Dennis Seidenberg (BOS)

Goaltender

  • Nicklas Backstrom (MIN)
  • Ondrej Pavelec (WPG)

Bench

Of course, I tried to avoid a Central Division bias in this year’s Official Friction Tape Fantasy Team™ roster (last year’s roster here), which I drafted yesterday:

Forward

  • P.A. Parenteau (COL)
  • Johan Franzen (DET)
  • Valeri Nichushkin (DAL)
  • Brendan Gallagher (MTL)
  • Michael Ryder (NJ)
  • Ryan Kesler (VAN) — keeper from last year

Defense

  • Cody Franson (TOR)
  • Dan Boyle (SJ)
  • François Beauchemin (ANA)
  • John Carlson (WSH)

Goaltender

  • Cory Schneider (NJ) — keeper from last year
  • Evgeni Nabakov (NYI)

Utility

  • Daniel Alfredsson (DET) — keeper from last year
  • Logan Couture (SJ) — keeper from last year

Bench

  • Jaromir Jagr (NJ) — keeper from last year
  • Jeff Carter (LA) — keeper from last year
  • Mike Ribeiro (PHO) — keeper from last year
  • Luke Schenn (PHI)

I’ve got a little more confidence in the Official Friction Tape Fantasy Team™ roster this year than I had in it last year, and I have certainly more in it than I have in the team I drafted today for a separate league. Regarding today’s draft: Damien Brunner is gifted but unproven; Colin Wilson should lead Nashville in scoring, but consistency and injury are his two biggest bugs; Brandon Saad and Vladimir Taransenko may have slumping sophomore seasons. Otherwise, I think the team is pretty well-rounded.

Regarding OFTFT™, Valeri Nichushkin should be an exciting rookie to watch in Dallas; Ryan Kesler should look to rebound after missing most of last season with injury, and should be a dynamic player for Team USA in the Sochi Olympics; the obvious weakness here is in goal, as Cory Schneider may not wrest a starting job away from Martin Brodeur (making him useless as a fantasy option), and the Islanders may not play well enough in front of an aging Nabokov to help him in the wins column.

Sadly, I don’t have enough confidence in the Predators this year to have loaded up either roster with a bunch of homer picks. I wanted to draft Pekka Rinne today, despite questions about his health, and I drafted former Predators Ryan Suter and Cody Franson. Hell, I even considered drafting former Predator Martin Erat late in today’s draft, or current Predator Rich Clune, whose 113 PIMs were good for 5th in the NHL last season.

*sigh* Maybe next year.

Filed under Nashville Predators NHL fantasy hockey conferenceiii