The debate over the debt ceiling is inane. The debt ceiling is the limit that the United States can borrow money to pay for what has already by appropriated. It has nothing to do with how much money is spent, it has to do with paying for what has already been spent. It is a limit on how much we can pay back what we already owe. It quite simply needs to be abolished. Some may say that there is valid reason to have it, that it is comparable to a credit limit issued by banks to individuals. I despise arguments that compare economies to households. Moreover, that argument isn’t correct. A credit limit prevents people from spending money before it has been allocated. The debt limit does no such thing. If someone were in a store and their credit limit had been reached they would not be able to walk out of the store with a new shirt. As a nation, we’ve walked out of the store and promised them we’ll pay, with the ramification being that if we don’t our credit rating will go down.
I’m by no means advocating for sustained and high national debt, I just know that this brinksmanship is an extremely dangerous game. As of 2017 the interest on our debt took up 7% of our federal budget. (1) If our credit rating is decreased because of a default, we could end up raising our interest rates and the percentage of our budget that goes towards paying interest on our debt could increase markedly. We not only put ourselves at risk for default with these talks, but we waste valuable government legislating time that could be spent actually solving our yearly budget deficit. Current members of the Republican party claim it is a valuable bargaining piece used to restrain government spending. I think that’s incredibly unsound logic. Everyone knows we need to solve our budget deficit, we don’t need some agonizing mechanism to push us to do so.
No rational person would try to incentivize theirself to do some task by strapping a bomb onto theirself with a timer that can only be diffused with a code they get after they finish the task. The time and stress spent raising the debt limit every few years is worthless. We need to get rid of the debt limit altogether and solve the accruing debt at the source. The time spent discussing raising the debt limit should be time spent actually governing and legislating. Senator James Lankford of Oklahoma has noted that since 2017, March, the Treasury Department was forced to use extraordinary measures, by way of financial loopholes, to ensure that the United States paid its debt on time. Those actions necessitated borrowing money at higher rates and ultimately, as of 2017, July 26th, cost the United States a needless $2.5 billion more than it otherwise would have.(2)
It is high time we stop this and get government to stop wasting time when it need not do so.