Short version: The debt ceiling limits the federal government's ability to borrow. No other country has an equivalent provision. So long as the government spends more than it receives, it necessarily has to borrow and sooner or later its borrowing will run up against the debt ceiling. At that point, it will only be able to pay part of its bills. No one knows what will happen next, because no one wants to find out, but the general assumption is that it will be very, very bad.
Republicans in Congress have regularly used that threat as a way to blackmail Democratic presidents, most recently in 2023, when Speaker Kevin McCarthy backed down and extended the debt ceiling until after the election.
Now Trump is calling for abolition of the debt ceiling, tweeting:
The extension of the Debt Ceiling by a previous Speaker of the House, a good man and a friend of mine, from this past September of the Biden Administration, to June of the Trump Administration, will go down as one of the dumbest political decisions made in years. There was no reason to do it - NOTHING WAS GAINED, and we got nothing for it - A major reason why that Speakership was lost. It was Biden’s problem, not ours. Now it becomes ours. I call it “1929” because the Democrats don’t care what our Country may be forced into. In fact, they would prefer “Depression” as long as it hurt the Republican Party. The Democrats must be forced to take a vote on this treacherous issue NOW, during the Biden Administration, and not in June. They should be blamed for this potential disaster, not the Republicans!
The cynicism of this statement is so remarkable it really calls for unpacking.
He is well aware that a debt ceiling breach could cause serious economic harm -- so severe that he uses the terms "1929" and "Depression" to characterize the possible results.
Then he says that Kevin McCarthy's decision to lift the debt ceiling was "one of the dumbest political decisions made in years" because any harm caused by the breach would have been "Biden's problem, not ours."*
Then he becomes outraged that once he becomes President, the Democrats must might give him a taste of his own medicine. He is angry that they might want to harm the economy to hurt him -- right after saying Republicans should have harmed the economy to hurt his predecessor! Ignored here: once Trump is inaugurated, Republicans will control all branches of government and are quite capable of raising the debt ceiling with no help from Democrats. Apparently he does not trust Republicans to do so.
In any even, he does not care what happens to the economy. He just wants to ensure that, "They should be blamed for this potential disaster, not the Republicans!"
*Probably not entirely true. While the resulting economic fallout would undoubtedly have led to a Republican landslide win, a Republican landslide win would not have put an immediate end to the economic fallout. Just as Obama was blamed for not immediately ending the aftermath of the financial crisis and Biden was blamed for not immediately ending the aftermath of the COVID pandemic, Trump would ultimately be blamed for not cleaning up fast enough from a debt ceiling breach. He does best to do this time exactly what he did last time -- inherit a country in reasonably good shape and take credit for that.
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