The Debt Ceiling Explained…

In case you’re confused about the “debt ceiling” – the $14.3 trillion limit of federal government obligations which was reached today by the United States – the Heritage Foundation, a right-wing think tank, is on hand to explain what this all means:


Edifying, isn’t it?

Considering that Nobel prize-winning economists can’t seem to agree on the fundamentals of what actually constitutes the national debt, what the ramifications of not raising the upper limit of borrowing would be, what level of debt to GDP is considered dangerous to economic stability, or indeed how much of it is actually “real” in the sense of the proportion of intragovernmental obligations involved, it’s hard to see how a cheesy video aimed at 12-year olds could conceivably be imagined to shed much light on the issue…

There are however some amusing take-aways from the bit.

For starters, it’s funny that the metaphor for the USA in this Heritage Foundation view of things is a gated community inhabited solely by white people. The narrative that government {“Steve” in this tale, who is “not the brightest guy, but is likeable and has big ideas”) once empowered with a credit card gets sucked into purchasing a bunch of useless “luxuries” (read: social welfare and other “liberal” bullshit programs) such as the pool table, composting system, solar street lamps and a pointless gatehouse staffed by some needy security guard. Poor “Steve” just couldn’t say “no” to all of these purchases… Well, you’ve watched the rest of the story and know how he spirals into a moral nightmare of political corruption, plunging the happy folk of the “United Estates” into a massive debt crisis.

Advertisements

8 Comments

Filed under Economy

8 responses to “The Debt Ceiling Explained…

  1. Funny how the video doesn’t show “Steve” spiralling into credit overstretch and maxing out his card after paying a massively expensive private army of neighbours to invade and occupy the house down the street because the owner, or so the cousin of his wife’s hairdresser says, has recently come into possession of some yellowcake from Niger.

  2. LOL

    Not to mention that “Steve” didn’t use his credit card to underwrite the risky collateralized debt obligations, gambling casino, and Ponzi insurance schemes of the First Bank of United Estates down the street because it was “too big to fail”…

  3. jkg

    Or they didn’t mention that “Steve” gave up his Ford Focus to accept less payment from the wealth creating young upstart neighbour in hopes that he would eventually be compensated in the future in other ways as his neighbour was going to flourish, yet now, he drives a Chevette that breaks down when riding to work on roads full of potholes.

    I think this is what people like to refer to as a fallacy of composition. Shiner rightly made a point about this long ago when ‘austerity’ was the new slogan for the Republican banshees.

  4. tofkw

    “Well, you’ve watched the rest of the story and know how he spirals into a moral nightmare of political corruption”

    Ah yes, the Bush Jr administration. I remember it well.

  5. Craig Chamberlain

    I liked the video. I made it everthing so much easier for me. Now I can go back to not thinking about other things.

  6. D.I.D.

    It is easy to criticize the ludicrous spending “priorities” of previous American governments, but we Canadians had better keep an eye on the Conservative government or else we may be found in similar straights quite soon…

  7. Fortunately, our debt to GDP ratio is nowhere near that of our American friends, but the HarperCons have demonstrated a certain degree of profligacy when it comes to government spending (even before the recession hit) and a penchant for suppressing revenue with little to show for it (e.g., reducing the GST) but increased deficits. Also, one of these days, all their “Defence” spending promises are going to materialize into actual costs that impact the government’s bottom line.

  8. true… you know what they say…Investors pay attention to issues that are understandable, not necessarily important

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s