Jonathan Chait

Goldberg So Close To Make Sense On Debt Ceiling, Yet So Far Away

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Jonah Goldberg argues that there's no point in having a debt limit if we just raise it automatically:

Here’s a question for those who insist we must have a “clean” hike in the debt limit. Why have a debt limit at all? I mean if it should automatically be raised the second you reach it without precondition, isn’t it a purely arbitrary and fictional barrier? I tried to make this point last night on Special Report, and it came out a bit clumsy, in part because I used the mathematically rigorous term “kuh-trillion.”

The whole point about a debt limit is that it is supposed to be a limit. Limits can be raised, of course. But if you go to the bank after exceeding your debt limit, the bank will or at least has every right to ask for more collateral, better terms, whatever. If you max out all of your credit cards and then go hat in hand to relatives begging for more money they have every right to put you on a repayment plan, cut up your cards, whatever.

If reaching the national debt limit isn’t a moment for at least debating if not  imposing such measures why have a limit at all? Just raise it to “infinity plus one” (is that more numerate than “kuh-trillion”?) and be done with the topic forever. 

This is a strong argument if, like Goldberg, you assume it's axiomatically correct that we need to take a vote to raise the debt ceiling. But we don't need a debt ceiling. No other country has one. Conservative, liberal, and centrist policy wonks believe we don't need one.

The debt ceiling vote is not related to virtuous fiscal policy. We hold these votes under Democratic and republicans administrations, under rising and falling deficits. It's not a reflection of Obama's policies, or a vote about policy choices at all. (We would have to raise the debt ceiling even if President Obama signed the Ryan Republican budget into law tomorrow.) It's simply an opportunity for the out-party to embarrass the majority. What's made it dangerous is the new assumption by Republicans that they should use the vote to demand substantive concessions, and Obama's willingness to concede this novel principle. That turns the debt ceiling from kabuki theater into a dangerous game of chicken that, unless ended, will at some point wreak long-term financial damage onto the country.

Goldberg's argument is sort of like saying, if we're not going to drink the jug of Drano, why keep it in the fridge at all? It makes perfect sense, except that he sees this as an reason to drink the Drano.

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