Despite both houses of the United States Congress having budgetary rules to limit deficits and debts, the deficit and, as a result, public debt, have increased dramatically despite each rule’s passing. Indeed, since 2001 the debt ceiling has been raised almost every year—with a whopping $480 Billion added at the end of 2021. What has caused the contradiction between the de facto and de jure rules? This paper argues that these budgetary rules are mere slogans to mask political actors’ use of public debt for rent creation and rent extraction. Specifically, this paper presents a political economic theory that illustrates how politicians use public debt as a noncompensated transfer that creates rents, leading to an increase in rent-seeking. Politicians rely on rent-seeking as a discovery process of to whom to award rents—who values rents the most and from whom politicians can benefit. The budgetary rules merely serve as a barrier to entry for rent competition, so that politicians can maximize their shares of the rents they created.