In times of economic downturn, such as the 2008 financial crisis or the pandemic lockdown, the government enacts expansionary fiscal and monetary policy to “stimulate” the economy and create jobs. These policies also create inflation and many economists argue that the growth is illusory. The pandemic-related spending and stimulus caused inflation  to reach 9.1% in June 2022.

So now the Tea Party is saying, “Okay, we won’t threaten to shut down the U.S. Government and all its services.  Instead, we’ll put a gun to our head again to force Democrats to give us what we want or we’ll let the United States of America default on its debts.” What they’re talking about now is the federal debt ceiling.  Republican talking points try to argue that the debt ceiling is a matter of cutting out-of-control spending and decreasing the “debt burden.”  

Ah, Washington. The good news is that our national leaders saved our butts (for the moment) from bottoming out off the “fiscal cliff.” The bad news is: Watch your head—it’ll soon come crunching up against another unnecessary “debt ceiling” crisis. The most important Good vs. Bad News about the New Year’s Day cliff dive is that the Ugly—the prospect that Congress’ failure to raise the debt ceiling could actually cause the United States to default on its international debts with genuine economic consequences—is now put off, but only until March.