Posted on 07/02/2025 11:09:34 AM PDT by MtnClimber
The idea sounds prudent enough: limit the amount the federal government can borrow and you limit its ability to overspend. But this, like many Washington contraptions, is a mirage. The debt ceiling, as it currently functions, is not a tool of restraint. It is a lever of dysfunction, a mechanism that paradoxically leads to more spending, higher deficits, and greater economic instability. It is a relic that should be scrapped entirely.
This might surprise even some conservatives. Elon Musk, no stranger to fiscal rigor, recently argued against raising the debt ceiling in the so-called Big Beautiful Bill. His instinct is understandable. But it is misdirected. The real path to conservative victory is not to preserve the ceiling but to eliminate it, and to require instead that every act of spending carry with it explicit borrowing authority. In other words, Congress must not be allowed to authorize a dollar of expenditure without simultaneously authorizing the means to finance it. This is not radical. It is rational.
The central flaw of the current system is conceptual. Congress already approves spending through the appropriations and authorization process. Yet it must separately approve the debt needed to pay for that spending. This sets the stage for artificial crisis. It is a bit like hiring a contractor to build your home, approving the full design, and then refusing to authorize the use of lumber once the foundation is poured. The spending has been enacted. The obligations are real. The refusal to permit borrowing is not fiscal restraint, it is sabotage.
Worse, the ceiling becomes a bargaining chip, a hostage, and a playground for rent-seekers. Rather than serving as a brake on debt, it serves as an accelerator. The empirical evidence is clear: when the debt ceiling approaches, politicians do not simply approve the needed increase and move on. They extract concessions. These concessions are not fiscal reforms. They are, more often than not, spending increases.
The history bears this out. Since 1960, the debt ceiling has been raised at least 78 times. Each time it has led to short-term chaos, and in many cases, long-term deficit growth. After the 2011 standoff, the US saw its first-ever credit downgrade. Borrowing costs rose. Taxpayers footed the bill. The Government Accountability Office estimated that the 2011 crisis alone added $1.3 billion in unnecessary interest payments for that year. The 2023 near-default triggered another downgrade, with Fitch citing "governance erosion."
The fiscal irony is that each of these showdowns ends with new goodies tucked into the legislation. In 2013, the government shutdown ended not with savings but with the Bipartisan Budget Act of 2013, a bill that added $63 billion in new discretionary spending. In 2018, the debt ceiling was hiked again, this time attached to a bipartisan budget deal that added $300 billion in new outlays. Even the supposedly austere Budget Control Act of 2011 was eventually undone by subsequent deals that reversed the very spending caps it imposed. The political pattern is unmistakable. Crisis invites compromise, and compromise, in Washington, means more spending.
This is not a failure of principle but a failure of structure. When the ceiling approaches, politicians have a deadline. Deadlines empower factions. The price of raising the ceiling becomes a logrolled bill packed with unrelated provisions designed to buy votes. Republicans demand defense increases. Democrats demand domestic spending. The result is a bill that passes, default is averted, and the deficit grows.
What makes this spectacle especially damaging is its predictability. Everyone knows the ceiling will eventually be raised. Default is not an option. The only question is what price will be paid to secure the votes. This political certainty breeds financial uncertainty. Markets brace for chaos. Investors raise borrowing costs. Confidence in the dollar wobbles. All this to approve borrowing for spending that Congress has already authorized.
And here we must return to first principles. Congress controls the purse. That is appropriate. But the act of authorizing spending is meaningless unless it also includes the power to finance that spending. The debt ceiling, as a separate vote, decouples cause from consequence. It gives Congress the luxury of irresponsibility: the power to spend without the duty to ensure that the spending is paid for.
Elon Musk and other fiscal hawks are right to demand restraint. But the debt ceiling is not the tool for that mission. It is a showpiece, a stage for drama, a place where spending deals get fatter, not leaner. If we want real reform, the answer is not to preserve the ceiling, but to replace it with a rule of simultaneity: no spending shall be enacted without concurrent authority to finance it.
There is a secondary, more strategic reason why Republicans in particular should favor a clean, large increase in the ceiling, at least for now. By raising the limit by $4 trillion or $5 trillion in the Big Beautiful Bill, the GOP ensures that no new debt ceiling showdown looms before the 2026 midterms. This deprives Democrats of a potent narrative. There will be no "Republicans are holding the economy hostage" headlines six weeks before an election. No last-minute fiscal cliff. No forced votes that divide the caucus. The larger the increase now, the more time the GOP buys to govern effectively without handing Democrats the theatrics they crave.
Of course, this tactic is only valuable if paired with a commitment to abolish the ceiling in the long run. A one-time hike that avoids near-term chaos is tactically smart. A structural reform that removes the ceiling altogether is strategically necessary. Fiscal conservatives should not fear this. They should welcome it.
Critics might object: would not eliminating the ceiling remove the last vestige of discipline from Congress? Would it not open the floodgates to even more spending? This misunderstands the function of the ceiling. The discipline, if it exists at all, must come from the budget process itself. The real decisions about fiscal priorities are made in the annual appropriations cycle. That is where reform must be focused. The debt ceiling is simply the moment when Congress decides whether to pay the bills it already charged to the taxpayer.
As Nobel economist Richard Thaler aptly put it, the debt ceiling is a "stupid rule that serves no useful purpose." Former CBO Director Rudolph Penner agrees. It has never constrained deficits, he writes. It has only served as a stage for political drama. Christine Lagarde, head of the European Central Bank, has called the US system of debt brinkmanship "unthinkable."
Indeed, almost no other nation governs itself this way. Denmark is the rare exception, and even there the ceiling is set so high that it never becomes a political weapon. In most advanced democracies, debt limits are either non-existent or incorporated into the budget itself. The United States, by contrast, has created a system in which elected officials periodically threaten to default on the very obligations they approved months earlier.
This is a self-inflicted wound. It is also a deeply unserious way to govern. If Republicans want to be the party of fiscal responsibility, they must stop pretending that default brinkmanship is a strategy. It is not. It is a gamble that risks the nation’s credit to score political points. Worse, it is a gamble that backfires. The evidence is overwhelming: the debt ceiling does not constrain spending. It increases it. Each crisis becomes a vehicle for greater outlays. Each standoff ends with a deal that costs more than it saves.
The path forward is simple. Eliminate the debt ceiling. Require all congressional spending bills to include the borrowing authority needed to finance them. Restore causality to fiscal policy: those who spend must also vote to borrow. Remove the stage on which this recurring fiscal tragedy plays out. It is time for Congress to grow up.
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Thank you very much and God bless you.
Go after congress critter assets to pay off excess spending. It would stop quickly. Then the problem would be that the democRATs would want to spend on idiot projects to prevent Republicans from properly funding necessary government actions.
Staggering debt and fiscal insolvency is a natural feature of any nation or state built on democratic governance.
> Staggering debt and fiscal insolvency is a natural feature of any nation or state built on democratic governance. <
Yes, indeed. The Founders wisely protected against that by having Senators chosen indirectly - not by the voters, but by the state legislatures.
The 17th Amendment removed that protection. So here we are.
Its a distinction almost without a difference.
Also, demanding generally that someone "require it," (who will "require it" by the way?) is a huge difference from Congress actually doing it.
It serves a very good purpose. It is the only gauge we have on what they spend even if the budget, spending, limits, ceiling is all fantasy. Fools.
Exactly, get rid of it. It limits nothing and it cuts nothing. When its ‘deadline’ hits the spending in question has already been approved by congress so of course the limit will be raised.
There needs to be a way for citizens to sue their representatives for selling them into tax slavery. Maybe there is no way that representatives would pass such a law. Then there is nothing left but vigilante justice or to accept the suicide of your country. Both are bad, but which is worse?
> It [the debt ceiling] limits nothing and it cuts nothing. <
True that. However, it is an occasional reminder of just how reckless Congress is when it comes to spending. For that reason alone I’m in favor of keeping it.
Penalty - 10% of congressional salary, perks and retirement and 20% tax on all outside income included capital gains realized or unrealized per extra $500 B of debt increase.
I found it confusing because I didn't realize they had switched from "deaths" to "debt" since they are similar-sounding words and I couldn't imagine how Congress could limit how many people would get killed. This was when Eisenhower was President.
The proposal is a de facto debt ceiling. It merely uses a different method to impose it, bit by bit, inch by inch. If Congress does not have revenue to back a proposal they will include borrowing authority for it. Given that almost no spending is legislated as independent by independent bills for each department, the big omnibus bills will only need one voting for one agreement to borrow more.
In the end it will not change anything. The “approved” debt level will merely grow via a different process
The Federal Reserve is a much bigger fiscal fraud.
I guess that means that my checkbook balance is a fiscal fraud too. I should just ignore it.
You are far more lenient than I am. I would make it harsh, very harsh for all but unexpected changes in the economy. I would allow the lawmakers to live in government supplied single-wide trailers with no heat or AC and rice and beans every day until they can pay off their malfeasance.
You win. I have already advocated building a Potomac Alcatraz on the DC mall. I have no problem with housing Congresscritters there, so long as they have to live and eat in the general population with MS 13 and TdA.
That is what needs to be smacked in the head with a sledge hammer. There has to be serious consequences or nothing will change. Maybe it needs to be 1776 type changes, but something must be done.
I actually like your plan. It does seem to be torture for MS 13 and TdA.
NO.
It is not a ‘fiscal fraud’.
The LIMITATION MUST STAY.
And they need to start taking it seriously !!!
WHERE IS MY BALANCED BUDGET !!!
{Crafty how Trump got the democrats to whine for one !}
It’s just a squirrel distraction.
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