{"id":10637,"date":"2023-05-08T18:19:38","date_gmt":"2023-05-08T18:19:38","guid":{"rendered":"http:\/\/lonecandle.com\/?p=10637"},"modified":"2023-05-08T18:19:38","modified_gmt":"2023-05-08T18:19:38","slug":"why-the-debt-ceiling-problem-never-goes-away","status":"publish","type":"post","link":"https:\/\/lonecandle.com\/?p=10637","title":{"rendered":"Why the debt ceiling problem never goes away"},"content":{"rendered":"\n

\n\n“The reason Congress continues to land in the same place is that raising or suspending the debt ceiling, much like funding the government, is something it must address on a regular basis. Every few years or so, Congress has to either increase or suspend the country\u2019s debt ceiling as it accrues more debt. This debt comes from covering government expenses including paying for the military, health care programs, and Social Security.
If it fails to address the debt ceiling, Congress would ruin the US credit rating and put its ability to pay its bills in doubt. That would likely trigger a domestic economic crisis, if not an international one. Were the US to default, interest rates would probably go up and unemployment would increase, potentially putting thousands or even millions of people out of work. 
Because it\u2019s must-pass legislation and requires the backing of both chambers, the party that\u2019s out of power in the White House or in the minority in Congress has often used this measure as leverage to extract policy concessions or send a political message. That has erased any incentive to reform the process, even though Congress could do away with the debt ceiling if it wanted to.”
…
“In recent years, Republicans have been more aggressive in demanding concessions from Democratic administrations in exchange for their support for a debt ceiling increase, though both parties have utilized such votes in the past to make a point. That\u2019s left the US in a dangerous cycle in which the minority party tries to squeeze every concession it can out of the process, debt ceiling negotiations go down to the wire, and any miscalculation on the part of lawmakers could inadvertently cause a default.”
…
“the United States is unique in having a debt limit that lawmakers need to suspend or raise every few years.
 A debt limit was first established in 1917 in order to \u201cmake it easier to finance mobilization efforts in World War I,\u201d per the Brookings Institution<\/a>. That enabled the US government to take on debt<\/a> without Congress approving each individual expenditure, which meant it could more quickly and efficiently finance the military. Since the 1960s, Congress has raised the debt limit more than 70 times; 20 of those times have been in the last 23 years. The debt limit effectively caps how much the US is able to borrow from federal agencies, foreign countries, and banks, so if the country defaults, it isn\u2019t able to pay its bills.”  
…
“The US government doesn\u2019t have to work this way.<\/p>\n\n\n\n

Congress could pass legislation doing away with the debt ceiling, and the president has options to ignore it as well, though they\u2019d likely prompt legal challenges. As Vox\u2019s Dylan Matthews has reported<\/a>, the president could invoke the 14th Amendment and ignore the debt limit, or Congress could approve an increase to the debt cap that\u2019s so high it basically nullifies the ceiling.<\/p>\n\n\n\n

Abolishing the debt limit altogether would prevent either party from using this process as political leverage. Doing so would greatly reduce the uncertainty that comes around every time there\u2019s a deadline like this and prevent significant market volatility that results.<\/p>\n\n\n\n

\u201cThere are zero downsides to getting rid of the debt ceiling. It is utterly meaningless as a policy guide or institution; it is good only for gridlocking government. And, in the modern age, gridlock is an enormous problem, given the huge pressing needs policymakers should be addressing,\u201d said the EPI\u2019s Bivens.<\/p>\n\n\n\n

Other economic experts note that eliminating the debt ceiling could take away an opportunity for Congress to debate fiscal policy. But many feel like that\u2019s a moot point, given debt ceiling standoffs are rarely about any specific spending anymore, but rather about weakening the party in power.”<\/p>\n\n\n\n

…<\/p>\n\n\n\n

“It\u2019s unlikely there\u2019s enough political will to make any of these changes happen. Instead, it seems as though lawmakers are comfortable getting right up to the brink \u2014 and running the risk of a default again and again.”<\/p>\n\n\n\n

https:\/\/www.vox.com\/politics\/2023\/4\/26\/23699509\/debt-ceiling-vote-deadline-2023-house-republicans<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

“The reason Congress continues to land in the same place is that raising or suspending the debt ceiling, much like funding the government, is something it must address on a regular basis. Every few years or so, Congress has to either increase or suspend the country\u2019s debt ceiling as it accrues more debt. This debt comes from covering government expenses including paying for the military, health care programs, and Social Security.<\/p>\n

If it fails to address the debt ceiling, Congress would ruin the US credit rating and put its ability to pay its bills in doubt. That would likely trigger a domestic economic crisis, if not an international one. Were the US to default, interest rates would probably go up and unemployment would increase, potentially putting thousands or even millions of people out of work. <\/p>\n

Because it\u2019s must-pass legislation and requires the backing of both chambers, the party that\u2019s out of power in the White House or in the minority in Congress has often used this measure as leverage to extract policy concessions or send a political message. That has erased any incentive to reform the process, even though Congress could do away with the debt ceiling if it wanted to.”<\/p>\n

…<\/p>\n

“In recent years, Republicans have been more aggressive in demanding concessions from Democratic administrations in exchange for their support for a debt ceiling increase, though both parties have utilized such votes in the past to make a point. That\u2019s left the US in a dangerous cycle in which the minority party tries to squeeze every concession it can out of the process, debt ceiling negotiations go down to the wire, and any miscalculation on the part of lawmakers could inadvertently cause a default.”<\/p>\n

…<\/p>\n

“the United States is unique in having a debt limit that lawmakers need to suspend or raise every few years.<\/p>\n

A debt limit was first established in 1917 in order to \u201cmake it easier to finance mobilization efforts in World War I,\u201d per the Brookings Institution. That enabled the US government to take on debt without Congress approving each individual expenditure, which meant it could more quickly and efficiently finance the military. Since the 1960s, Congress has raised the debt limit more than 70 times; 20 of those times have been in the last 23 years. The debt limit effectively caps how much the US is able to borrow from federal agencies, foreign countries, and banks, so if the country defaults, it isn\u2019t able to pay its bills.” <\/p>\n

…<\/p>\n

“The US government doesn\u2019t have to work this way.
\nCongress could pass legislation doing away with the debt ceiling, and the president has options to ignore it as well, though they\u2019d likely prompt legal challenges. As Vox\u2019s Dylan Matthews has reported, the president could invoke the 14th Amendment and ignore the debt limit, or Congress could approve an increase to the debt cap that\u2019s so high it basically nullifies the ceiling.<\/p>\n

Abolishing the debt limit altogether would prevent either party from using this process as political leverage. Doing so would greatly reduce the uncertainty that comes around every time there\u2019s a deadline like this and prevent significant market volatility that results.<\/p>\n

\u201cThere are zero downsides to getting rid of the debt ceiling. It is utterly meaningless as a policy guide or institution; it is good only for gridlocking government. And, in the modern age, gridlock is an enormous problem, given the huge pressing needs policymakers should be addressing,\u201d said the EPI\u2019s Bivens.<\/p>\n

Other economic experts note that eliminating the debt ceiling could take away an opportunity for Congress to debate fiscal policy. But many feel like that\u2019s a moot point, given debt ceiling standoffs are rarely about any specific spending anymore, but rather about weakening the party in power.”<\/p>\n

…<\/p>\n

“It\u2019s unlikely there\u2019s enough political will to make any of these changes happen. Instead, it seems as though lawmakers are comfortable getting right up to the brink \u2014 and running the risk of a default again and again.”<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[13],"tags":[542,7,1393,1385,278,1193,279],"class_list":["post-10637","post","type-post","status-publish","format-standard","hentry","category-article-share","tag-congress","tag-debt","tag-debt-ceiling","tag-debt-limit","tag-deficit","tag-government-spending","tag-spending"],"_links":{"self":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts\/10637","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10637"}],"version-history":[{"count":1,"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts\/10637\/revisions"}],"predecessor-version":[{"id":10638,"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts\/10637\/revisions\/10638"}],"wp:attachment":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10637"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10637"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10637"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}