As congressional Republicans and the Obama administration butt heads over a deal to raise the U.S. debt limit before an Aug. 2 deadline, credit-rating agency Moody's has a different suggestion: Scrap the debt ceiling altogether. The current system requires that Congress authorize any increase in the Treasury's borrowing limit, and creates "periodic uncertainty" every time the feds need to to rack up more debt to pay our bills, without doing anything to actually rein in spending, says Moody's analyst Steven Hess. Should we abandon the debt ceiling altogether?
Yes. We don't need the debt ceiling: Scrapping the anachronistic debt ceiling "is very, very good policy," says Dylan Matthews at The Washington Post. Denmark is the only other country with anything like our artificial borrowing limit, and not only do other developed nations seem to get along fine without it, but so did the U.S. between 1979 and 1995, when the "Gephardt rule" automatically upped the debt limit every time Congress increased our national debt. And obviously, eliminating the debt ceiling altogether would vastly reduce the number of needless partisan standoffs in D.C.
"Moody's wants the debt ceiling gone"
No. The debt ceiling is just starting to work: Just because the debt ceiling has so far failed to impede government growth is no reason to ditch it, says Jonathan Tobin at Commentary. In fact, as the current "messy" negotiations show, giving Congress power over debt growth can work, if Congress is brave enough to use it. The threat of default has "brought the Democrats to the negotiating table and forced them to concede spending cuts heretofore unimaginable."
"There's a reason we have a debt ceiling"
The debt ceiling was never meant to restrain borrowing: If Congress wants to stop growing the national debt, all it has to do is stop voting to spend more money than the country brings in, says Doug Mataconis at Outside the Beltway. That was never supposed to be the debt ceiling's job. History shows that the debt ceiling was simply Congress' strategy to get out of the Treasury's way and "make it easier for the federal government to issue debt." It also allows Congress to "demagogue on the debt issue, pretend that it is acting responsibly, but in reality do absolutely nothing." It's time to abolish this useless legislative requirement and hold lawmakers responsible for their spending decisions.
"Moody's is right, eliminate the debt ceiling"
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- 43 TV shows to watch in 2014
- How to be the most productive person in your office — and still get home by 5:30 p.m.
- This is what happens when Republicans actually enact their radical agenda
- The Obama administration's nonstop incoherence on ISIS
- 6 things the happiest families all have in common
- 6 super-helpful iOS8 tricks you probably don't know about
- How I dug myself out of debt — and stayed that way
- The science of sex: 4 harsh truths about dating and mating
- Why Japan is turning to high-tech floating islands to solve its energy needs
- Why so many Christians won't back down on gay marriage
Subscribe to the Week