The debt ceiling fight continues in Washington, more than a week after the U.S. hit its legislated debt limit of $31.4 trillion.
“The Treasury Department has hit the federal borrowing limit at $31.4 trillion, and they’re going to be able to use cash-management techniques to be able to extend what we call the ‘X date’ of when they’re going to ask for the debt limit to actually be raised, somewhere until later in the summer,” says Matthew Dickerson, senior adviser on budget policy at The Heritage Foundation. (The Daily Signal is the news outlet of The Heritage Foundation.)
“So, the negotiations are starting between Congress and the White House to figure out what are the spending reforms, what are the pro-growth policies that we’re going to implement and pair that with the debt limit increase so that we can put the country on a path to a more prosperous future,” he said.
Dickerson joins “The Daily Signal Podcast” to further discuss the latest on the debt ceiling debate, whether the U.S. has ever defaulted on its debt before, and a bill recently introduced by 43 House Democrats to eliminate the debt limit entirely.
Listen to the podcast below or read the lightly edited transcript:
Samantha Aschieris: Matthew Dickerson is joining today’s show. He is a senior policy adviser of budget policy in the Grover M. Hermann Center for the Federal Budget here at The Heritage Foundation. Matt, thanks so much for joining us.
Matt Dickerson: Thanks for having me on.
Aschieris: Yeah, of course. Now, here in Washington, the debt ceiling fight continues. America has already reached its debt limit of $31.4 trillion, and that was on Jan. 19. So, Matt, first and foremost, what’s the latest on this?
Dickerson: That’s right. The Treasury Department has hit the federal borrowing limit at $31.4 trillion. And they’re going to be able to use cash-management techniques to be able to extend what we call the “X date” of when they’re going to ask for the debt limit to actually be raised, somewhere until later in the summer.
So the negotiations are starting between Congress and the White House to figure out what are the spending reforms, what are the pro-growth policies that we’re going to implement and pair that with the debt limit increase so that we can put the country on a path to a more prosperous future.
Aschieris: And just speaking of the White House, my colleague, Virginia Allen, reports that they have said that President Joe Biden won’t negotiate over conditions for raising the national debt ceiling. On Wednesday, though, Sen. Rand Paul of Kentucky said the president absolutely will negotiate. So what are your thoughts on this? What’s at play here?
Dickerson: Absolutely. Just like everything in politics, this is a negotiation. An increase in the debt limit has to go through the House, the Senate, and get signed into law by the president. A bill is not going to be able to get passed unless it’s paired with some sort of spending reforms, as it has been going back for four decades on negotiations about the debt limit. So there will be a negotiation.
Vice President Biden, when he was in the White House, engaged in very significant negotiations with Speaker [John] Boehner in 2011, and I think a similar path is going to follow now.
Aschieris: We have some audio also from Virginia of remarks from Sen. Ted Cruz at a Wednesday press conference with five other GOP senators, and we’re going to go ahead and play that for you now.
Sen. Ted Cruz: There is one principle person in this town that is talking about a default in the debt, and that is Joe Biden. Joe Biden wants to threaten the default in the debt. He wants to scare the markets. And frankly, he’s counting on y’all.
He’s counting on the press corps just to repeat his talking points. He’s counting on the press corps just to say, “Those crazy Republicans want to default on the debt.” That is false. And if you write that in your stories, you are simply repeating partisan talking points from the White House. Historically, the debt ceiling has proven incredibly effective.
Aschieris: So two things from this I want to discuss. First, when Sen. Cruz talks about defaulting on the debt, what does that exactly mean? And what would the consequences be if this were to happen?
Dickerson: Yeah, so, what the senator is talking about is, if the Treasury doesn’t pay back the principle and interest on loans on Treasury bonds and bills—and frankly, that’s not going to happen. The Treasury is going to be collecting record revenues this year, and the Treasury has the ability to prioritize and pay its obligations for debt and the principle and interest on our debt payments. So there’s not going to be a default on our debt.
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The Treasury may have to get to a situation, if the debt limit isn’t raised, where we’re simply not spending more than we take in. And at that point, other spending would not go out the door on time as it’s been promised, but we’re not going to default on our debt obligations.
Aschieris: Yeah. Has that ever happened before?
Dickerson: Not in a significant way. Actually, one time back in the ’70s, there was a computer error and some of it didn’t get paid. And there wasn’t a big, big market meltdown. It has happened before, but it’s not something that we want to have happen.
The global financial markets are built on Treasury debt. It’s a very safe asset because the United States is going to pay its obligations. But what we need to do is get to a situation where our federal budget is sustainable and so we’re not issuing debt that we’re not going to be able to meet our promises to pay it back.
Aschieris: Yeah. And the second thing that Sen. Cruz talks about that I want to get your thoughts on is the role of the media and the reporters who are covering the debt ceiling debate. What are your thoughts on what Sen. Cruz had to say about that?
Dickerson: I think it’s interesting, right? A lot of reporters may have not been around in the negotiations that were taking place in 2011 where both sides were talking.
President [Barack] Obama, Vice President Biden was negotiating with congressional Republicans, and they got to a deal that put us on a more sustainable fiscal path. And that happened in the ’90s. That happened in the ’80s on a bipartisan basis. And so there’s always been a negotiation about the debt limit. It’s served as a tool to put the country on a more sustainable fiscal path for decades, and that’s what we need to do this year.
Aschieris: Now, Matt, I also want to get your thoughts on something that we saw from House Democrats recently. They introduced a bill that would essentially do away with the debt ceiling entirely and allow Congress to borrow the money it needed to pay its bills. So first and foremost, what’s this all about?
Dickerson: Yeah, I think that just goes to show how radical the Left is, right? The debt limit is an indispensable tool that protects taxpayers. That’s why it was implemented in the first place. The Left, on the other hand, when we reached the $31.4 trillion debt limit, which should be a crazy wake-up call of how much we’re spending and how much is going out the door, their solution is to get rid of the spending cap and then continue spending, continue borrowing, continue the Federal Reserve’s money printing. That’s only going to push up inflationary pressures and hurt American families. And I think that’s just a crazy, crazy thing that we should be pointing out and doing the opposite.
Aschieris: Yeah, I mean, do Democrats really believe the government can just permanently borrow more money when everyday Americans can’t?
Dickerson: That seems to be their viewpoint, right? If you’ve seen their crazy economic theories of Modern Monetary Theory, which the government has been putting into practice over the last couple of years, and that’s resulted in inflation that we haven’t seen in this country in four decades. And so it’s totally a debunked economic theory.
And what we have seen is when government spending is controlled, when we have regulations that are restricted in a smart tax code, we have economic prosperity that’s broadly felt in this country. And that’s what we need to go back to.
Aschieris: Well, Matt, thanks so much for joining the show today. I always appreciate your insight. We’ll definitely have you back on as this debt ceiling debate continues. Thanks so much.
Dickerson: Great. Thank you.
Article cross-posted from Daily Signal.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
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