Your Debt Ceiling Questions Answered

The looming debt ceiling crisis has many people scratching their heads about how we got here and what it means. In the interest of helping the public be better informed, GefilteBacon has assembled this useful set of FAQs.

What is the debt ceiling?
It is a limit on how much debt the United States government can incur, set into law by Congress and the President. The current debt ceiling is $14.3 trillion, which the Treasury Department says it will hit around August 2.

What will happen if the debt ceiling is not raised by then?
The immediate impact will be that the federal government would not be able to pay off debt. This "default" could lead to the country's credit rating being lowered, higher interest rates, a devalued dollar and dramatically reduced investor confidence in Treasury-backed securities.

What does that mean for me?
It could mean that the fragile economy would collapse. Job losses would be huge. Global markets would face a panic. There could be a run on banks. The United States' credibility as a safe financial investment would be shattered for years, even decades. Our nation's leadership role in the world would be forever compromised, condemning our descendants to a second-rate existence as part of a debtor society.

That sounds pretty bad. So can't Congress raise the debt ceiling?
They can, but Congressional Republicans, and some Democrats, will not support raising the ceiling unless it is paired with steps to reduce the federal deficit.

Are the parties discussing how to achieve that?
Vice President Biden convened a group of Congressional leaders from both parties to negotiate a solution. Congressional Republicans have stated that "everything is on the table" in budget negotiations.

And how are those talks going?
Congressional Republicans walked out of them two weeks ago.

Why?
Because Democrats insisted that increases be on the table.

But you just said that Republicans said "everything is on the table" in negotiations. How can they say everything is on the table and also say that taxes are off the table?
Because everything is on the table.

Except tax increases.
Correct.

So because they don’t want to negotiate tax increases, Republicans abandoned the talks, leaving us closer to defaulting on our debt?
Republicans didn't abandon the process. Democrats did.

How is it that Democrats abandoned the talks when it was the Republicans who walked out?
Because Democrats placed preconditions on the talks that were unacceptable to Republicans.

What preconditions?
That tax increases would not be off the table.

How is the Democrats’ refusal to accept the Republicans’ refusal to discuss tax increases a precondition?
If Democrats had gone into the talks with a plan to cut the deficit, instead of refusing to refuse to discuss tax increases, we wouldn't be in this mess.

You mean Democrats have refused to propose spending cuts?
Democrats have offered five dollars of spending cuts to every one dollar of tax increases.

So they have put forward a plan, one that gives Republicans almost everything they want?
By putting forward a plan that refuses to put everything on the table shows that they are not putting forward a plan.

What have they refused to put on the table?
Taking tax increases off the table.

They are to blame for the talks collapsing because they have refused to put taking tax increases off the table on the table?
That's right.

That doesn't even make any sense.
What doesn't make sense is the Democrats' refusal to negotiate.

But they did. You said they offered a deal of five dollars of spending cuts to every one dollar in tax cuts.
Exactly. Their refusal to offer a solution that Republicans can support shows that they are refusing to negotiate.

So negotiation is when Democrats give Republicans everything they want?
Based on past experience, yes.

Why won't the Republicans put tax increases on the table?
Raising taxes kills jobs.

Won't a government default kill even more jobs?
Yes, which is why Democrats need to accept a deal that will strengthen our economy by not raising taxes.

What taxes precisely are Democrats looking to increase?
Taxes on the wealthy, eliminating tax incentives for oil and gas companies, ending tax breaks for corporate jets.

And Republicans oppose these?
Taxing the job creators will hurt job creation.

Are you saying Republicans would prefer see the country go into default - which would destroy even more jobs - than allow small tax increases?
Of course not, which is why Democrats need to come back to the negotiating table and put forward a plan that includes everything.

Except tax increases.
We've covered this already.

But won't cutting government spending hurt the economy, too, by taking money out of the economy?
It is a well known fact that 90 percent of government spending goes to provide abortions to women who were impregnated by their lesbian lovers.

Not only is that not true, it is biologically impossible.
It's already running on Fox News.

Why can't, for the sake of avoiding plunging the Republic into financial ruin, Republicans accept even a small amount of tax increases?
Washington doesn’t have a taxing problem, it has a spending problem.

Isn't that just a bumper sticker?
Obama is a socialist.

That's not even a response to what I asked.
Obama. Socialist.

All right, now you're just hurling insults.
Socialist socialist socialist socialist

Could you please just wait-
Socialist!

But I-
Social.

Will you p-
Ist!

I'm try-
S O C I A L I S T

This is-
Soooooooooo. Cialist.

Plea-
Knock knock.

Sigh. Who's there?
So.

"So" who?
Socialist!

I have a headache. Can we just talk about the Casey Anthony trial instead?