Surowiecki on the debt ceiling
The magazine’s June 28 editorial, “Over the Brink,” concluded that the debt ceiling was an unnecessary and irrational constraint:
If Congress wants to cut the deficit, it doesn’t need to set itself an artificial limit; it needs to spend less, raise taxes, or both. After all, most of the nation’s $14.4 trillion debt is the result of policies Republican lawmakers voted for: the Bush income-tax cuts, an unfunded Medicare drug program, and two expensive wars. If you want a low ceiling, you don’t build high walls. If you want less debt, you borrow less.
In this week’s New Yorker, James Surowiecki makes the same point another way:
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.
Surowiecki goes on to argue against the idea that the debt ceiling is an effective way for Congress to check its own extravagant impulses:
One argument you hear for having a debt ceiling is that it’s useful as what the political theorist Jon Elster calls a “precommitment device”—a way of keeping ourselves from acting recklessly in the future, like Ulysses protecting himself from the Sirens by having himself bound to the mast. As precommitment devices go, however, the debt limit is both too weak and too strong. It’s too weak because Congress can simply vote to lift it, as it has done more than seventy times in the past fifty years. But it’s too strong because its negative consequences (default, higher interest rates, financial turmoil) are disastrously out of proportion to the behavior it’s trying to regulate. For the U.S. to default now, when investors are happily lending it money at exceedingly reasonable rates, would be akin to shooting yourself in the head for failing to follow your diet.
That last vivid analogy reminds us why debt-ceiling votes shouldn’t be the occasion for political bargaining in the first place: neither side really believes defaulting on our debt would be a good thing for the country, nor is the duty to pay one’s bills an exclusively Democratic principle. But if both sides agree that raising the debt ceiling is necessary, then neither side should be offering it as a concession in exchange for something else. A real compromise on the budget would involve Republicans getting some of what they want (more spending cuts) by offering some of what they don’t want (more revenue) — not Republicans getting everything they want by offering what both parties and the whole country obviously need.