Video: The Debt Ceiling — Ha, Ha — Explained
The average voter is like Mr. Smith.
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Published on January 12, 2013. The original is here.
We read:
What are extraordinary measures?When the debt limit is reached, the Treasury Department uses a variety of accounting maneuvers, known as extraordinary measures, to avoid defaulting on the government’s obligations. For example, the Treasury has prematurely redeemed Treasury bonds held in federal employee retirement savings accounts (and replaced them later with interest), halted contributions to certain government pension funds, suspended state and local government series securities, and borrowed from money set aside to manage exchange rate fluctuations. The Treasury Department first used these measures in 1985, and they have been used on at least 14 occasions since then.
Can hitting the debt ceiling be avoided without Congressional action?
The Treasury Department’s use of extraordinary measures simply delays when debt will reach the statutory limit. Spending in excess of incoming receipts has already been legally obligated; that spending will push debt beyond the ceiling. There is no plausible set of changes that could generate the instant surplus necessary to avoid having to raise or suspend the debt ceiling.