There should be a convention of wordsmithers on the debt ceiling. Raising the debt ceiling sounds like rewarding someone for bad behavior. Suspending the debt ceiling sounds much better, but it’ ‘s really a game of kick the can down the road. Then there is Minority Leader of the House, Kevin McCarthy simple, direct, and completely wrong statement:
“we have paid for everything the Trump administration spent.”
“But it wasn’t paid for,” says Marc Goldwein, senior vice president for the nonpartisan Committee for a Responsible Federal Budget (CRFB) . The Trump administration spent more money than they were taking in. So Trump like every other president for the last 20 years ran a deficit and three times the debt ceiling was increased.
Senator Elizabeth Warren has got the right solution. Abolish the debt ceiling. She said the following:
“Me? I’d get rid of the debt ceiling altogether. It serves no function except to create leverage for people who are willing to blow up the economy,” she added.
The GAO estimated that the delay in raising the debt ceiling during the debt ceiling crisis of 2011 raised borrowing costs for the government by $1.3 billion in fiscal year 2011 and noted that the delay would also raise costs in later years. The Bipartisan Policy Center extended the GAO’s estimates and found that the delay raised borrowing costs by $18.9 billion over ten years.
That’s the consequences of a delay. Defaulting on our obligations would be much worse.
I think the best argument to get rid of it, is that it is redundant. Congress already controls the budget and taxation. Also, borrowing to cover shortfalls, really does make economic sense. The Covid-19 Relief Act kept our economy going, when people could not work, particularly in the hospitality area. Trying to pay for this with increased taxes would make no sense.
Link: Wikipedia, US Debt Ceiling
So, what Senator Warren is proposing, makes complete sense and would benefit Americans from cliff hanging partisan battles in Congress. What other country has a legislature that tries to crash the economy unless he does what they want?