When the Debt Ceiling is the Least of your Worries

As you get older, it seems like these events come around more quickly…

WASHINGTON (Reuters) – The U.S. government will have to stop borrowing money between July and December if Washington doesn’t agree to raise a legal restriction on public debt, the Treasury Department said on Wednesday.

Hitting that so-called “debt ceiling” could trigger a U.S. default on its debt and an immediate recession, a risk that has become a regular facet of U.S. politics over the last decade.

The current debt limit was set in March. Treasury has been able to continue borrowing from investors by using accounting measures such as limiting government payments to public sector retirement funds.

Yes its debt ceiling time one again.  In fact, we’re so used to it now that the real debt ceiling was hit back in March and the Treasury just went into its automatic back up plan. With the Administration and Congress not talking to each other, constant fiscal crisis could become routine.

But that’s nothing compared to what’s coming.  According to OBM projections, starting in 2025, all of our federal government borrowing will go to finance the interest on the national debt, as illustrated in this handy chart:

It’s like when you reach the point that you are getting cash advances on your credit cards to pay your minimum credit card payments on other cards.  Frankly, I don’t know what this really means in terms of the impact on our economy.  Will interest rates skyrocket?  Will we go into an instant recession?  Will inflation coming roaring back? I don’t know and I’m not sure anyone knows.  It would be nice to think that we could work through our problems and come to some sort of bipartisan agreement (*cough* Balanced Budget Amendment *cough*) but the odds of that seem a lot less than us all coming together and dealing with the debt ceiling crisis that’s coming up this year.

2017 Prediction Wrap Up

Well this year was not one of my better performances.  After 2016, I guess I got a bit cocky, so I’ll have to lower my expectations, but I did win a few and lose a few, but 2017 was not my year in predictive punditry. Still, let’s look at the results:

The Winners

At least 3 terrorist attacks in Western Europe resulting in double digit casualties. This should have been a no brainer but actually it’s a win on a technicality.  There were multiple terrorist attacks all year but it took until the Manchester Attack on May 22nd before we had a double digit casualty attack, 22 killed and 59 injured.  This was followed by the Barcelona Truck attack on August 17th, with 13 killed and more than 100 injured.  The technicality comes in on the fact that I didn’t specify causalities as fatalities. So although in Western Europe there were only two attacks with fatalities in the double digits, there were several other attacks; the March bridge attack in London with 5 deaths and 29 injuries, the April truck attack in Stockholm with 5 deaths and 14 injuries, the other London bridge attack in June with 8 deaths and 48 injuries, and a September train attack in London with no deaths but 29 injuries. So Western Europe did have a full year of terrorism, but many of the attacks didn’t quite push up the fatalities in a way that the Islamic State might have hoped.

The FED will raise interest rates by at least three-quarters of a point. Janice Yellen lived…up?  Or is it down; to my expectations and more and raised interest rates.

Articles of Impeachment against Donald Trump will be introduced in the House. I’m definitely claiming this one as a win.  Congressman Steve Cohen introduced articles of impeachment last month.  My only surprise was what took so long.

The Losers

Angela Merkel wins the Nobel Peace Prize. A funny idea, but no, she didn’t get it.

Most of the Obama Care (ACA) legislation will be repealed. I was really surprised by this.  I figured that in spite of the ongoing Republican Civil War if there was one thing I thought the Republican Party was united on was the idea of getting rid of Obamacare, however it turns out that delivering defeats to President Trump was a more important goal of the Republican leadership.

There will be at least one assassination attempt against Donald Trump this year. Thankfully wrong on this one.  That’s not to say there have not been assassination threats against Trump; I see them almost every week online, but an actual public attempt to take him out hasn’t happened this year.  The last one that I know of happened in Nevada in 2016.

Marine Le Pen will be elected President of France. This definitely falls within the “close but no cigar” category. Emmanuel Macron beat Le Pen, in an election that turned out be just as weird as the 2016 US election was.

So getting 3 out of 7 isn’t great.  I failed this year’s challenge. That’s OK though, I can learn from my mistakes, and still beat never trump neo conservative Bill Kristol’s wretched predictive record!