Debt — The vicious circle

For most of us, vicious circle in the context of debt, refers to the inability and continued need to borrow to maintain status quo.

For the government however, there is a whole new meaning to it.

Congress approves budgets each year, which the President is expected/ mandated to spend.

Here’s how the vicious circle goes:

• Congress asks Government to spend money it doesn’t have
• Government needs money to execute the budget, hence borrows
• Debt levels need to be increased, which only Congress can approve
• Congress won’t approve

Happy Debt Ceiling Politics Day ;)

PS: My guess remains that something will happen tonight, the drama will be interesting nevertheless