ELI5: The Debt Ceiling Fight (And How Frustrating The Political Theater Is)

McCarthy holds Biden’s America hostage in an unnesscary and dangerous fight over the debt ceiling. (Image Credit: Salon/Getty)

All I really want in life is to help others understand themselves & the world around them. The “Explain Like I’m Five” series aims to bring down current issues into a consumable summary, with limited (but well informed) bias.

As the days of May count down, the United States approaches the so called debt ceiling, after which point we will no longer have the treasury funds to pay our existing debts.

…Huh?

Fair reaction. Bureaucracy is rarely exciting, and this issue is painfully dull. I think it’s that dullness that often obscures the absurdity of it all. So let’s break it down.

Like any business or household, the United States operates with revenues and debts. Tax revenues represent most of our revenues, but there are other sources, such as custom duties, the sale of properties or rights to resources, licensing, and more. You can read more revenues here, but it’s pretty dry.

Like them or not, the IRS is responsible or collecting the lion’s share of U.S. revenues through taxes. (Image Credit: Luke Sharrett/Bloomberg)

Simply, taxes are the money we break in. To equate it to your household income, revenues are you wages earned.