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I am co-CEO of Redington, we advise 10 of the top 25 pension funds in the UK and we are building Redington into a global force in the pensions industry. Our objective is to ensure the next generation can continue to be better off than the last.

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© Robert Gardner 2013
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23rd of October, 2013

“So this debt ceiling thing is routine, or the end of the world?” Response: “Both.”


The debt ceiling debate in the US raises many questions, the most basic of which is, what is the debt ceiling? 

“Now, this debt ceiling — I just want to remind people in case you haven’t been keeping up — raising the debt ceiling, which has been done over a hundred times, does not increase our debt; it does not somehow promote profligacy.  All it does is it says you got to pay the bills that you’ve already racked up, Congress.  It’s a basic function of making sure that the full faith and credit of the United States is preserved.”

Remarks by President Barrack Obama at the Business Roundtable, 18th September 2013

And why is the threat of ignoring it so dire?

“Yeah, you know, the immediate collapse of the U.S. economy, followed by Japan sinking into the sea, followed by a worldwide depression the likes of which no mortal can imagine…followed by week 2…”

How commonplace is this? Well, here’s what President Ronald Reagan had to say about it in 1987:

“Congress consistently brings the Government to the edge of default before facing its responsibility. This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets, and the Federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility – two things that set us apart from much of the world.”

Still don’t understand the US Debt ceiling ? Watch this classic clip from Aaron Sorkin’s The West Wing“In God We Trust” Season 6, episode 20, written by Laurence O’Donnell Jr in March 2005.

The characters in order of appearance are

  • Annabeth Schott, Deputy Press Secretary for Media Relations.
  • Claudia Jean “C. J.” Cregg, White House Press Secretary
  • Charlie Young, personal aide to President Josiah Bartlet
  • Toby Ziegler, Communications Director

Annabeth: “Are we gonna do a press release on raising the debt ceiling? Because I don’t understand a word of it.”

CJ: “No press release. When’s the vote scheduled?”

Charlie: “Treasury figures that with the interest on the debt, we’ll hit the legal limit at midnight tomorrow. They want the President to call for the vote right now.”

Toby: “Which, of course, is a ridiculous idea.”

Annabeth: “Of course?”

CJ: “The leadership wants to schedule it at the last minute.”

Annabeth: “How crazy is that?”

CJ: “They always like to schedule it at the last minute, just when the Government is about to default.”

Toby: “That way it’s too dangerous for any Senator to try and stop it.”

Charlie: “…or stick an amendment on it.”

CJ: “Which leaves just enough time for a couple of House and Senate speeches about how awful it is that we’ve maxed out the national credit card…and then a quick vote to raise the limit on the credit card.”

Charlie: “It’s a one-sentence bill. Just change the 7 to an 8.”

Annabeth: “Trillion?”

Toby: “Yeah. Trillion”

Annabeth: “Why does Treasury want the President to read over a 20-page memo on a one-sentence bill?”

Toby: “Oh, they like to run a worst-case scenario.”

Annabeth: “In case it doesn’t pass?”

Toby: “Yeah, you know, the immediate collapse of the U.S. economy, followed by Japan sinking into the sea, followed by a worldwide depression the likes of which no mortal can imagine…followed by week 2…”

Annabeth: “So this debt ceiling thing is routine, or the end of the world?”

Toby: “Both.”

 CJ: “OK, that’s it. thanks everybody.”


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