Friday, I watched a fictional character waste a day on Twitter trying to answer debt ceiling questions with no success. I am not an economist and I found this simple Khan Academy video quite helpful. It was done in July 2011, but it’s still relevant.
The debt ceiling does not increase spending because the money is already spent.
Social Security has nothing to do with the deficit or the debt. Yes, the government has to pay it, but it was already paid for by us and our “representatives” used it for other things. You might wonder how such a thing could happen. Here’s an example (entirely fictional, with names that were borrowed for illustrative purposes).
For example, let’s say we all agree to have a pie party here at UW on Friday. Let’s say six of us agree to go in on a $12 pie. Let’s say imusthavepie says she knows a fabulous bakery and will order and pick up the pie for us. So, tomorrow, five of us each give imust $2 for our pie. She takes the money and puts in in her wallet, along with $22 of her own money. On Thursday, she goes to pick up her dry cleaning and the bill is $26 and she opens her wallet and gives the dry cleaners the money. Then she e-mails us to tell us that we can only have 1/2 a slice of pie each because she only had $6 left.
So who owns most of our debt? It’s not China—it’s us, as in US:
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