Nothing is more gratifying than when someone who you think is smart agrees with your position–even if that person has no idea who you are let alone what position they’re agreeing with you on.
Earlier this week, I suggested that the U.S. should get rid of the debt ceiling as a legislative concept.
Now comes the August 1 edition of The New Yorker in which financial columnist James Surowiecki advocates the same position, albeit using more words and better arguments than I was willing to spend time making.
The truth is that the United States doesn’t need, and shouldn’t have, a debt ceiling. Every other democratic country, with the exception of Denmark, does fine without one. There’s no debt limit in the Constitution. And, if Congress really wants to hold down government debt, it already has a way to do so that doesn’t risk economic chaos—namely, the annual budgeting process. The only reason we need to lift the debt ceiling, after all, is to pay for spending that Congress has already authorized. If the debt ceiling isn’t raised, we’ll face an absurd scenario in which Congress will have ordered the President to execute two laws that are flatly at odds with each other. If he obeys the debt ceiling, he cannot spend the money that Congress has told him to spend, which is why most government functions will be shut down. Yet if he spends the money as Congress has authorized him to he’ll end up violating the debt ceiling.
. . .
We may nonetheless end up with a halfway sensible budget deal. But that would be the result of luck, not design. Instead of figuring out ways to raise the debt ceiling, we should simply go ahead and abolish it. The U.S. economy has plenty of real problems to deal with. We shouldn’t have to wrestle with ones we’ve created for ourselves.
I couldn’t have said it better myself.