The Ddebt Ceiling has always been an absurd Political Institution, but Raising it, used to be treated by Congress as a Routine part of the Country’s Business, But it is now used to Extort Concessions
The US had already Technically reached our Statutory Debt Limit, before this Week’s New Congressional Agreement, and this New Agreement Only Pushes-Off the Date we would make Catastrophic History by Defaulting on our Obligations into early December.
Experts agree that it is Imperative that we Neutralize the Debt Ceiling, once and for all, to End this Practice of using the Debt Ceiling as a Tool to put our Economy in a Stranglehold.
Here’s why:
- The Debt Limit measures No coherent Economic Value. The Measure of Debt it Targets is Not Adjusted for Inflation, and it Ignores Trillions of Dollars in Assets held by the Federal Government.
- The Debt Limit has No Relationship to Economic Stressors facing the Country. Over the past 25 years, as the nominal Federal Debt rose from $5 Trillion to $22.7 Trillion, required Interest Payments on Debt Shrank almost in Half, from 3.0% of GDP to 1.8%.
- The Debt Limit can Cause real Damage. It would only take a Couple of Months of Missing Federal Payments, due to the Debt Ceiling, to send the Economy into Recession, and that’s without assessing Damage it would cause from Financial Market Fallouts. This is a Risk we Cannot keep taking.
- The Debt Limit has been Repeatedly used to Enforce Misguided Austerity Policies. The 2011 Budget Control Act (BCA) grew directly out of a GOP Congress Threatening to Not Raise the Debt Ceiling Absent Spending Cuts. The BCA provided an Anti-Stimulus about Twice as large as the Stimulus provided by the American Recovery and Reinvestment Act (ARRA), Contributing to our Sluggish Recovery from the Great Recession.
The Debt Ceiling’s Threat needs to be Neutralized.
Fortunately, there are Two ways to End the Hostage-Taking:
- Congress could Vote to Abolish the Debt Ceiling:
it is obvious that the US should join the vast Majority of Rich Countries around the World, who don’t have a Debt Ceiling. It would be most straightforward if Congress would Abolish it. Alternatively, if a Large enough Group of Members of Congress Demand that the Reconciliation Bill, Raise the Debt Ceiling to some laughably Large Number, $100 Trillion or $500 Trillion, this would effectively Abolish it.
- President Biden could effectively Neutralize it through a Variety of Measures:
If Congress won’t Act, the Biden Administration should Act Unilaterally. There is plenty of Support for citing the Fact that Congress has given the Executive Branch Conflicting Instructions and, hence, the Administration is Free to choose which Path it follows. Congress’s Taxing and Spending Instructions require the Administration to Issue Debt to cover any Shortfall, yet the Debt Ceiling would bar Debt Issuance. One of these Congressional “Decisions” must be Ignored, so the Administration should Decide. Another Ssolution, One that Highlights the Stupidity of the Debt Ceiling, is Minting the Trillion Dollar Platinum Coin.
A Quirky Law from more than 20 years ago, seems to allow the Administration to Mint Coins, of Any Denomination without Congressional Approval, as long as they're Platinum. The Law says the Treasury Secretary "may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary's discretion, may prescribe from time to time."
NYC Wins When Everyone Can Vote! Michael H. Drucker
