Debt, Deadlines, and Decisions
To our clients and associates,
Let’s face it, we’ve all been there once or twice; it’s April 14th, you finally get your paperwork together to file your taxes. It’s the cutoff to get a RSVP for a wedding in the mail (you go with the Salmon, to be healthy.) You decide you don’t need your last Amazon purchase; the return window is beginning to close and it makes its way into your car. The invisible force that causes action for all of us is the same, a deadline.
Every couple of years our government likes to experiment with the power of deadlines in the form of navigating the debt ceiling, a process that has been in place since 1939. According to the Treasury, since 1960 we have raised the debt limit a perfect 60 out of 60 times.
Here are some remarks on the debt ceiling from our leadership in Washington.
“Without significant spending cuts and changes to the way we spend the American people’s money, there will be no debt limit increase,” Mr. Boehner told members of New York’s business and finance community. “And cuts should be greater than the accompanying increase in debt authority the president is given.” Mr. Boehner said those cuts should be in the trillions of dollars, not billions.”
“The idea of refusing to raise the debt ceiling should be taken off the table,” Mr. Schumer said in a conference call with reporters before the speech. Mr. Schumer also said he believed that the debt limit increase should be approved by mid-July to reassure nervous credit markets, though the administration has said it can push the deadline into early August.”
The above was published on May 9, 2011, in the New York Times (yes, 12 years ago). Let’s fast forward to some quotes today about the current debt ceiling situation:
"We ought to have at least some restraint on our spending related to the debt ceiling, and this is not unusual. We've been here before. Debt ceilings have frequently carried other measures. What we have here is we're running out of time, and it's time for the President to get serious and just sit down with the Speaker and get a solution." – Mitch McConnell
"What’s really troubling about the speaker’s position is, it’s a partisan bill, and he says take it or leave it, or we could default,” Schumer said. “By not taking default off the table, Speaker McCarthy is gravely endangering America and making it much harder to make progress on budget negotiations."
If you were to look at most things that occurred 60 times in a row, we generally have one of two mindsets. We either think we’re “due” for the opposite outcome, or the consistency will continue to prevail. In the past the debt ceiling process has centered around rhetoric followed by deadlines, kicked cans and the eventual late-night deal. It’s hard to see this being different than the past.
As Mark Twain said, “History doesn't repeat itself, but it often rhymes.” Get out there and enjoy the spring!
Wishing you well,
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