So here we are, in late September, being told that the government might shut down next week and then default on its debt in mid-October. And it’s all some Republicans’ fault?
Let’s make sure I understand this. Starting with the basics:
Unlike our state and local budget years, which begin on July 1 (with mandated balanced budgets by the way), the federal government budget year begins on Oct. 1. The House has the constitutionally mandated responsibility to initiate all spending bills, including budgets. The Senate then agrees or disagrees; the President gets to sign or veto.
This last step is supposed to be done by Oct. 1. There is no requirement that the federal budget be balanced. If expenditures exceed revenues, the federal government can borrow the difference and add it to the national debt, which as of last weekend was $16,745,555, 054, of which my twin grandchildren owe $105,746.
Sometimes the federal government borrows from other countries; sometimes it borrows from itself, or a form of itself called the Federal Reserve, which buys government bonds. It also “stimulates the economy.”
Where does the Federal Reserve get the money to buy bonds and to stimulate the economy? Thank you for asking, but it’s not your job to question where the money comes from. It’s your job to “Spend!” so that jobs are allegedly created to provide what you are spending on, even if most of the money involved in this process is borrowed/printed/made up, or taken in taxes from people who then can’t spend their own money or save it in accounts from which it can be borrowed for genuine economic activity.
To make it all so much more interesting, this year the new budget year coincides with the implementation of the “Affordable Care Act” (Obamacare), a law which passed in 2010 with only Democratic support; those who questioned its size and complexity were told by House Speaker Nancy Pelosi that “we have to pass the bill so that you can find out what’s in it.”