Splash was agitated. The warm spell that accompanied the tornedo outbreak that swept across five states had everyone a little on edge, since Melissa has family out there. It was close enough to some of them that a short drive could have taken them to see the devastation in Mayfeld, Kentucky. If the roads were open, of course, which many are not.
The usual coverage followed, which combined the awful reality of what really happened festooned on the narrative tree of the story we are supposed to believe. DeMille was not on the spot to provide guidance at first light, since he was following the developments in Congress this morning and they started early. Splash’s voice thus had more direct penetration without suitable moderation. “It is the worst in almost a century!” he said with drama. “96 years ago there was one almost as devastating!”
As you know, Splash is always skirting the edges of what management considers appropriate for seasonal offerings in The Daily, which is to try to agree with some of the nonsense, and remember that our Western society has honored these days when the darkness is near its annual peak, and a feast and bright lights were used to beat back the pessimism that can rise as the sun disappears earlier and earlier, and the fruits of the fields and trees is done for the year. The Holidays of a couple of the Great Faiths happen this time of year, derived from our collective need for joy and hope when light- and food- are precious things.
He went on at some length about that, and the latest conspiracy theory floating around about the Wuhan Military Games that brought thousands of athletic competitors to China in October of 2019. And returned them to nations around the world just at the beginning of the pandemic. Rocket was kind, in the way that people can be who have spent part of their lives hurtling beyond the speed of sound, but sometimes also of thought.
He managed to get Splash immersed in a second cup of Black Rifle Coffee to cut the noise as the F150 rolled and crunched down the gravel drive to the place we usually leave it near the Loading Dock. DeMille emerged with a smile. “Relax, Ladies and Gents! We are not out of money! The Congress passed the Debt Ceiling Increase!”
There were some disconcerted looks around the Fire Ring. “Is that the BBB thing? Or part of the NDAA?” there were additional questions about whether that meant amnesty for millions of people who had moved to America without legal permission. Or the Continuing Resolution, which is actually the entire regular Federal budget we no longer consider as anything but one big number, all in one vast, almost unimaginable tome a foot thick. Some of us did budget stuff in their professional lives, so they are used to it. But for most, this is terra incognita- an unknown monetary land.
“So this was one of those things hanging out there on the Christmas Tree, along with Taiwan, Ukraine and the Iranian nuke talks?” Loma is a methodical gent, as was his trade in delivering high explosives to necessary things determined by other people’s policy decisions. He has a little scratch pad and makes notes to look things up. He waved his battered tablet around, featuring a note from our friends at the White House. “This is good. Apparently we were in deep kimchi until the House and Senate got together this morning to raise the Debt Ceiling.”
“Why weren’t we talking about this yesterday?”
“Because there was a plan, and they did not want to get us alarmed over something as small as most of the annual amount of money we spend to keep things running.”
“That builds up over time,” agreed Melissa, who used to run a $12 billion dollar project as part of the monolith.
DeMille nodded, and accepted the tablet from Loma, who went back to slurping his coffee. The clouds that had obscured the dawn were burning off, and sunlight filled the pasture. He looked at the words highlighted on an attractive background format. “It does, but we are not going to worry about that part. We have been given permission to borrow a couple trillion dollars to add to the national debt.” He traced his index finger across the glassine cover to the device. “This note from the White House lines it out in a clear and straightforward manner.”
The words were clear and business-like. DeMille read them slowly: “Cecilia is the 30th Chair of the Council of Economic Advisors, aided by the redoubtable Ernie, Martha and Bradley at the White House. They lay it out nicely.” He paused for a sip of coffee before continuing.
“America hit its debt limit on August 1st, and the gang realized the folks at Treasury would run out of cash to cover it, risking a major default that would destroy the current world financial order.”
“That’s bad, right?” There were some smirks around the circle.
“Well, yes. The national debt is the total amount of outstanding borrowings accumulated over 220 years. We need to borrow cash to pay bills we can’t pay with the money taken in by Federal revenues alone.”
“That is taxes, right?”
“Sort of. It includes securities the Treasury creates. That includes a bunch of stuff- T-Bills, notes, and bonds are the most common ones. They differ mostly in when they mature. That can range from a few days to 30 years, with differences in the interest charged against them.”
“So those of us who won’t live that long won’t have to pay them, right?”
“Well, unless there is a surplus in the budget. That was the original concept, but we have not run an annual surplus since 2001, which is twenty years ago this morning.”
“We have been borrowing money to run the country since then?”
“Yeah, but don’t worry. It was all carefully considered.”
“So what is it?”
DeMille rested the tablet on his lap, doing this one from memory. “Congress set the debt limit at $28.4 Trillion back in August, and we are already at a crisis. Or were, until this morning. But it is not fixed, just deferred. Cecilia and her gang caution that the debt limit is not a forward-looking budgeting tool. It does not reveal what policymakers think are ideal levels of spending and revenue. Instead, what they say is that the current Administration is responsible for managing debt piled up by prior Congresses and Administrations. Cecilia says it pretty well. She and her bosses have to pay bills that are due based on these prior policy decisions.”
“So we are now free to make new bad policy decisions?”
“Yep. And celebrate a great Christmas season.”
There were some mild and ironic smiles around the circle. Splash sat up straight and finished the last of his Black Rifle-brand coffee. “Thank goodness. I think I saw that the original budget request that is in the Continuing Resolution for 2022 was about $6 Trillion, with revenues only about $4.1 T. The new debt ceiling makes it whole.”
“But that means the grandkids are saddled with paying off a bill that amounts to five times the annual budget.”
“Don’t worry about it. They don’t mind.”
DeMille handed the tablet back. “The only problem is that at some point everyone who loans us cash will realize the kids didn’t agree to what we are borrowing in their name.”
Splash laughed loudly. “So when does that happen? And won’t there be some sort of dramatic adjustments required that have no relation to prior policy assumptions about the American Century made by previous Administrations of both parties?”
“Yes. We were going to talk about the American Century this morning, but I guess this is really just Part One to a pretty amazing story. We can do some celebrating and talk about it when the budget and the calendar year are the same thing. In January.”
Splash laughed. “2022, the real one, is going to be fun!”
Loma slipped a small silver flash from the pocket of his hunting jacket and made an ill-advised policy decision. He tipped it against the rim of his coffee cup so a dark liquid trickled out and into the darker mass below. “So, we ought to start now!”
Copyright 2021 Vic Socotra
www.vicsocotra.com