The Brink of Sanity

This is an email exchange between Marc and Jay regarding the United States debt ceiling.  Yes, we do have actual conversations that aren’t about nonsense like farting on subways.  Can you guess which one reads journals and which one reads x-men comics in his spare time?

Jay:  Obama said raising the debt ceiling does not raise the actual debt.  Now I don’t have my MBA yet but I’m pretty sure making the number of dollars owed higher means you owe more money.

Marc: Yep, you don’t have an MBA. All the debt ceiling means is the amount we are allowed to borrow. We need to borrow more money because we owe more money than we have. The budget and the debt ceiling are separate things. In simplest terms, our budget is set for us to pay $100 this year but we only have $80 on hand. We want to borrow $20 so we can pay the full $100 that we owe and the republicans are saying they won’t let us borrow that last $20. Except in this case, instead of $20 we owe $17 trillion and we need to borrow more because our bills are higher than what we are taking in. Essentially in accounting terms, our debts are higher than our credits on our balance sheet so we need to borrow money to make up that shortfall and the republicans are against it. It is not the best idea to have to keep borrowing more money but that should be worked out when you make the budget and not when the bill comes. Continue reading →