Fraud of the Debt Ceiling Debate

The monopoly media has had almost daily reports about the current conflict in the U.S. Congress over the debt ceiling, including whether to raise it or suspend it or abolish it altogether. The debt ceiling is said to be distinct from the federal budget, but the debate consistently occurs when the budget is being debated and government shutdown is threatened. Indeed in 2013, the No Budget, No Pay Act was passed which suspended the ceiling for the first time, allowing unlimited debt for that period. Suspension occurred regularly after that from 2013 to 2017. Now agreement has been reached to raise the limit by $480 billion, which is only enough to fund debt payments until December 3, the same date a government shutdown could occur if the budget is not passed.

The claim that the debt ceiling serves to regulate spending and prevent too much debt from being incurred is a myth and part of the fraud. In reality, the debt ceiling has consistently been raised. In the 1980s it was several trillion dollars and today it is about $28.5 trillion. Another part of the fraud is the fear generated that failure to raise the debt ceiling means the U.S. will default on its debts. It is used as a form of blackmail against those who do not submit to the plans of the administration. The debts, mostly in the form of government bonds and notes, all paying interest, are largely owned by the giant private financiers. The financiers are also the ones that determine the U.S. credit rating. This means that the promotion of potential default makes it possible for the financiers to lower the U.S. credit rating, making government borrowing even more expensive. At the same time, the fear of catastrophe which is generated diverts all eyes to the debt ceiling and this, in turn, pressures people to line up behind one or the other of the ruling factions and the private interests they represent.

The fraud also serves to steer attention away from the military funding with bills passed by the Senate and House (316-113) with no fuss, no muss. The bills are currently being reconciled to be sent for the president to sign.  Meanwhile, the rest of the federal budget, which includes funding for social programs like education, health care and housing, has again been left in limbo until December.

The military budget provides the Pentagon with $768 billion, more than $24 billion above what Biden asked for, and includes $28 billion to modernize nuclear weapons. It also calls for women turning 18 to now register for a military draft alongside men of that age. Currently registration for the draft is not being enforced but the fact that women are now to be added is an indication that the U.S. is preparing for yet more wars and positioning itself to impose a draft. The funding increase was mostly defended as needed for potential war with China.

In the name of modernizing infrastructure and "green" energy the debt ceiling debate has also become a weapon used by the contending factions within the U.S. ruling class to determine which private vehicle manufacturers, construction companies, energy providers and other oligopolies will get the biggest slice of the budget. It is also part of the contention between the executive, in this case the Secretary of the Treasury, and Congress, which, constitutionally, controls the purse strings but in reality commonly concedes that to the Office of the President.

A default by the U.S. would mainly be a problem for the private financiers and oligopolies, who use public funds to serve their own narrow interests. These funds are not used to benefit the people or the society they depend on. As far as the people go, they would be far better off if the government stopped making debt payments, including interest, to these private interests and instead established a public banking structure.

It is also the case that in all kinds of ways the people consistently demand that the government stop funding war and use the funds allotted for war to guarantee the people's right to health care, housing, education and a livelihood. Currently the budget for funding social programs is far below what is required to meet the just claims of the people. Increasingly people are speaking out with their own voice to express their own demands. This voice can be heard in the many demonstrations, strikes and actions held nationwide.

This underscores that the biggest fraud of the debt ceiling debate is to hide the fact that the people do not decide any aspect of the federal budget, which comes largely from taxes on working people. The ruling elite hope that the people's demands to stop paying the Pentagon and rich and increase funding for social programs will get lost in the fog of the repeated threats of catastrophe and government shutdown. It is a vain hope because the more people take stands for what is right, the more they empower themselves and the frauds get revealed for what they are. In this regard, the people know that government shutdowns harm the people who work in government service and depend on these services, not the rich. The debt ceiling debate is a hydra which requires a herculean effort to defeat.

This article was published in

Volume 51 Number 10 - October 10, 2021

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