Congress

The Debt Ceiling is Coming

JM Ashby
Written by JM Ashby

The U.S. Treasury Department quietly informed the world yesterday afternoon that the "extraordinary measures" they've been using to avoid hitting the national debt ceiling will be exhausted at some point between July and December of this year.

“Treasury expects that the extraordinary measures will be exhausted sometime in the second half of 2019,” Treasury Deputy Assistant Secretary Brian Smith said in a statement announcing the department’s quarterly debt issuance plans.

Wall Street also sees Treasury exhausting its borrowing authority in the third or fourth quarter, according to the minutes of a meeting of a Treasury advisory committee of financiers.

To say that we'll hit the debt ceiling in the "second half" of the year is a wide range of time, but assuming we'll reach the ceiling at some point in the late third or early fourth quarter of the year, that means we'll hit the ceiling around the same time that funding the government in fiscal 2020 will be necessary.

Considering that Trump will likely be in full campaign mode by the time fiscal 2020 arrives on October 1st, I personally anticipate that he'll at the very least threaten to shut down the government again if congressional Democrats won't give him money for his fantasy border wall or more funding for the indefinite detention of immigrants.

At the same time, I expect he will play chicken with the debt ceiling at least as long as it takes for Wall Street to have a really bad day while he's on the campaign trail.

The fact that nothing scares Trump more than a tanking stock market may be the only thing that prevents us from breaching the debt ceiling and seeing another government shutdown.

  • muselet

    Having a debt ceiling at all is, as we’ve discussed before, nuts. It serves no real purpose, encourages lunatics to play games with the economy and wastes valuable congressional fundraising time.

    I agree that Donald Trump witll be defiant! and resolute! in demanding something ridiculous in exchange for his agreement to raise the debt ceiling; I agree that Trump will fold as soon as the stock markets drop a fraction; and I agree that Trump is terrified of a stock market correction.

    I suspect Trump’s followers will concentrate on the first, ignore the second and indignantly deny the third, then will go out and vote for Trump again because fiscal sanity or some such.

    –alopecia

  • Aynwrong

    Will Democrats finally learn how to pronounce the word “extortion” in public?

  • 1933john

    I plan to keep my “four-eyes” on FICA and Medicare.

  • Badgerite

    Exactly right. It seems that the only thing the gop has managed to find the balls to stand up to Mango Mussolini on so far has been appointments to the Federal Reserve Board. Because money and power is all that they are really about and their true “base” is Wall Street.

  • Draxiar

    Remember the days when the Debt Ceiling was never in the news? I miss those days. They seem like they’re three lifetimes ago but I still miss them.