So have you heard the one about how Trump is suddenly opposed to the debt ceiling and wants to get rid of it? Yep, yesterday he called for Congress to raise, suspend, or even completely eliminate the debt ceiling, which (I’m sure you remember) is a limit on how much Treasury can borrow to pay debts. And Trump wants it gone before he takes office.

Republicans in Congress are now facing a crisis. For the past several years they’ve merrily demagogued the debt ceiling by portraying it as a limit on how much Congress can spend, not on how much Treasury can borrow to pay for debts already incurred. And then every time it has to be raised they play games and threaten shutdowns in exchange for cuts to programs they don’t like. A lot of Democrats have wanted to get rid of it for years, although apparently not enough Democrats. If the debt ceiling is eliminated, Republicans won’t get to play their favorite “holding the federal government hostage” game any more, or at least, they’ll have to work a lot harder to play it.

(The debt ceiling was created during World War I as a housekeeping shortcut. Before 1917, every time Treasury needed to borrow money to pay the bills, Congress had to vote on it. By setting a debt ceiling as a sort of blanket authorization, they saved themselves a lot of time. But now will the Freedom Caucus go to war over every vote to let Treasury issue some bonds, or whatever? The House is dysfunctional already.)

Jeff Stein writes at WaPo:

“Anybody that supports a bill that doesn’t take care of the Democrat quicksand known as the debt ceiling should be primaried and disposed of as quickly as possible,” Trump said.

Trump even went as far as pushing for the permanent repeal of the national borrowing limit. Democrats have long called for abolishing the cap, saying Republicans have used the limit as a weapon to force them to agree to spending cuts. Republicans have traditionally supported keeping the debt limit in place as a check on federal spending, although the limit bans borrowing, not spending. The government typically borrows to pay for spending that Congress and the White House have already enacted into law.

So what is going on in Trump’s demented head?

I take it Mike Johnson then started making noises about raising the debt ceiling but not abolishing it altogether. Today House Minority Leader Hakeem Jeffries addressed this on Bluesky:

GOP extremists want House Democrats to raise the debt ceiling so that House Republicans can lower the amount of your Social Security check.

Hard pass.

— Hakeem Jeffries (@hakeem-jeffries.bsky.social) December 19, 2024 at 8:38 AM

Why is this happening? Alan Rappeport writes at the New York Times,

As he prepares to push an agenda of tax cuts and border security, Mr. Trump fears that a debt limit fight next year could interfere. His plans are expected to cost trillions of dollars, much of which will most likely need to come from borrowed funds. A drawn-out debt limit fight next year could force Mr. Trump and Republicans to bow to the demands of Democrats and could consume the congressional calendar.

“This is a nasty TRAP set in place by the Radical Left Democrats!” Mr. Trump wrote on social media on Wednesday night. …

By addressing the debt limit during the final weeks of the Biden administration, Republicans could prevent Democrats from weaponizing it against them once they are in power. And, as Mr. Trump has made clear, he could then blame Mr. Biden for increasing the borrowing cap.

And all this happened after Elon Musk detonated another bomb in Congress by demanding the death of an already made agreement that would have kept the government funded for at least a few months. Now we’re likely to have a shutdown right before Christmas, and you know how popular that will be. Paul Krugman writes in his substack column,

Musk is demanding — apparently successfully — that Republicans in Congress renege on a deal they had already agreed to, a continuing resolution that would keep the federal government going for the next few months. Why? Because, Musk says, of the outrageous provisions in that CR.

Except none of the items Musk is complaining about are actually in the bill. No, Congress isn’t giving itself a 40 percent raise. No, the bill doesn’t fund a $3 billion stadium in Washington. No, it doesn’t block future investigations into the Jan. 6 committee. No, it doesn’t fund bioweapons labs. …

…Second, you shouldn’t trust claims about the budget coming from Some Guy on the Internet. You might have imagined that the world’s richest man could have a couple of fact-checkers on retainer to help ensure that he isn’t making clearly stupid assertions. But nooo.

In a barrage of posts on X Musk pushed misinformation about a more or less routine, place-holding bill that was basically a way to keep the ship of state afloat until Trump takes charge. Maybe this was in part a power play, an attempt to make Republicans in Congress show fealty to a man who clearly imagines that he’s the real president — and Trump, by meekly endorsing Musk’s position, did in fact convey the impression that Musk is leading the guy who is supposed to be in charge by the nose. But this political theater will have real consequences, for America, for Trump, and for Musk himself.

People are already calling Musk the “co-president” and sometimes “the First Lady.” Krugman continues,

Maybe Musk himself doesn’t expect to experience any hardship, but put it this way: I’m glad that I won’t need to renew my passport any time soon, that I don’t expect to be trying to get through airport security for a while, and especially glad that I don’t rely either on food stamps or on small business loans. For all of these things have been disrupted in past government shutdowns.

Do Musk and Trump know any of this? Almost surely not.

Beyond the specifics, my guess is that antics like the potential shutdown will do much more damage to the Musk/Trump administration than they realize. (There’s also this other guy — JV Dance or something? — but he clearly doesn’t matter.)

First, since the election financial markets have clearly been betting that Trump will do very little of what he promised during the campaign — that we won’t really have a trade war, just some minor trade skirmishes, that we’ll have symbolic deportations rather than a mass roundup of immigrants, and so on. Markets have, in effect, discounted the disastrous consequences that would follow if Trump honored his own promises.

But a government shutdown in response to completely false claims about what’s in an innocuous short-term funding measure suggests that the peddlers of misinformation are high on their own supply. Trump may really believe that foreigners will pay tariffs, that U.S. trade deficits subsidize the rest of the world, that there’s a reserve army of American workers available to fill the gaps deportation would create. I don’t want to put too much weight on the latest market fluctuations, but it is starting to look as if investors are questioning their own complacency.

And while you’re at Krugman’s new substack site, be sure to read Health Insurance Is a Racket.

Update: Just a few minutes ago some House Republicans said they have a new budget deal that they can vote on today. But no details have been released.

Update Update: And the new bill inspired a big “hell no” from House Dems.

Update Update Update: The new bill failed in the House, 239 no, 174 yes.

Also in the news: A Georgia Appeals Court disqualified Fani Willis from the Trump RICO case. I guess we all knew that was coming.

A Deep Dive: There’s a long and nerdy article at Lawfare about the Republican Party and whether the current MAGA version of it is a break from the past or a continuation of it. If you don’t mind long and nerdy, it’s worth reading.

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