Posted on 10/27/2013 5:57:36 AM PDT by TigerLikesRooster
How 'Debt Ceilings' Increase Debt
By Gary Becker and Edward Lazear - October 24, 2013
The recent wrangling in Washington over the debt ceiling, with both sides promising to return to battle early next year, never got around to considering this proposition: Maybe debt ceilings are a bad idea, because they may lead to increased spending.
A debt ceiling may seem like a good way to constrain out-of-control government, by focusing attention on the federal deficit and the resulting debt increase. (For the record, the United States debt recently surpassed $17 trillion.) But that focus draws attention from the underlying problem: too much spending.
Debt ceilings also provide a false sense of security. Borrowing will never get too far out of hand, the thinking goes, because the ceiling will cap it. Yet the U.S. debt hits the debt ceiling time and again because the federal government runs chronic deficits. This addiction to overspending has forced Congress to raise the debt ceiling more than 90 times during the past 70 years, and 15 times since 1993 alone.
(Excerpt) Read more at realclearpolitics.com ...
P!
We’re not increasing the debt. We’re just borrowing money to pay the interest on our bills and spend more. 0bama said it so it has to be true. He one the election twice so he has to be right.
I’ve given up. Every spare DIME these days is converted into ammo or some sort of survival gear or gold or silver or canned goods. Did I mention ammo? LOL!
FUBO...for speeding up our financial demise and FU to those CLUELESS Congress Critters who came before you and got us INTO this mess! Grrrrr!
The debt ceiling was created to rein in wasteful and immoral spending. Just because it didn’t work doesn’t mean it causes the problem. We need to cut the spending, but giving them an unlimited credit card is not the solution either.
Good post. You summed it up pretty well.
The astronomical debt is a ticking time bomb IMO. Nobody seems to know what to do about it so its glossed over as some minor distraction that will magically get better if only the “recovery” will come along.
Ignore the dark funnel cloud appearing on the horizon.
Not to worry. Obamacare will make everything better. Happy Days are here again.
And I can’t wait for next year’s “Recovery Summer” 5.0.
Washington will spend until it can’t. As we near the point of impending economic implosion only then will the politicians say that something has to be done. The hypocrites in DC will piously claim that “we” have spent too much (i.e., blame the people but not themselves) and now they have a brilliant plan to save the day.
And they will all be re-elected for their foresight to prevent a national calamity. /sarc
The debt ceiling doesn’t exist. If it were actually observed, and borrowing ceased when the ceiling was reached, then it would have some credence, but since it is increased semi-automatically (the increase has never been refused, and usually without much debate) an actual debt ceiling doesn’t exist in any meaningful sense.
The debt ceiling is a sick joke played on the people. It is another broken promise from the liars and criminals that we send to Washington. As in , “We promise not to let the debt go over 17 trillion” But what good is ceiling that is constantly moved? It is no ceiling at all. Just another lie.
I’ve already got my ticket to attand the Recovery Summer 5.0 summit.
The way Keynesian policy is supposed to work, Govt. in theory accumulates surpluses during good times, and uses them (runs deficits) to smooth out the bad times.
The only “glitch” - there are never any surpluses to start with.
Oops.
ONLY Congress can address the debt by passing laws that cuts spending. It is totally dishonest of Congress to bitch about the debt ceiling when it is in their power, in fact it’s their duty, to address the spending.
If you tell your employee to go buy you a Mercedes you are an idiot if you bitch at him for spending $80,000.
If we got government out of the way and returned to the growth rates and innovativeness of the Gilded Age, that debt would melt like butter in a frying pan.
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