The Debt Ceiling Serves No Real Purpose
It doesn’t actually constrain the deficit — and the drama surrounding it carries negative consequences for American taxpayers
Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi have been in tense negotiations over the last few days to discuss raising the debt ceiling and reaching a budget deal — the latter of which Speaker Pelosi insists is necessary if Democrats are to vote for a debt ceiling hike. If, however, the U.S. Congress fails to reach an agreement to raise the debt ceiling, the government will likely run out of money to pay its bills as early as September, resulting in the U.S. (catastrophically) defaulting on its debt and struggling to pay things like federal employees’ salaries and Social Security.
The showdown has renewed calls to simply abolish the debt ceiling altogether. “Lawmakers and the White House are haggling over the conditions under which they will, once again, temporarily raise that cap, known as the debt ceiling,” writes Catherine Rampell in the Washington Post. “But the better solution would be to abolish it entirely — no strings attached.”
Rampell, along with the bipartisan chorus of economists and lawmakers (including the president) who issued similar calls in recent years, is right. Today, the debt…
