Today is the day that the U.S. meets its debt ceiling, meaning we're not allowed to borrow one more penny on top of the $14,307,799,341,563.81 we already owe to the Chinese. Unless Mommy and Daddy and Eric Cantor agree to co-sign our application for a new credit line, that is.
Treasury Secretary Tim Geithner informed Congress via letter this morning that, because of the statutory limit on public debt, he can't fully fund two federal retirement and disability pension funds—actions that his predecessors have taken in previous debt showdowns. Geithner has said he has about a three-month window during which he can take certain "extraordinary measures" to keep paying out the various obligations of the federal government without issuing more debt—the national equivalent of taking your change jar down to the bank and checking your winter coats for any extra $20 bills in the pockets. He estimates he can keep that up until August 2, when all the spinning plates will crash to the floor and the U.S. will be forced to default on some of its debt.
That would be economically and diplomatically catastrophic. So we can expect a nuanced, civil, and rational debate all summer long about our nation's fiscal priorities and how to best tackle our debt issues. Can't wait.