3

The debt ceiling was created, more or less, by mistake - a remnant of a program where the other half was ruled unconstitutional.

Less debt is better than more debt, but the only thing the debt ceiling does now is cause a high stakes game of political “chicken” every few years. Unless lawmakers actually like playing chicken, this seems pointless to me.

Why doesn’t the legislature just get rid of the debt ceiling?

Improve this question
3
  • 2
    This is probably a better fit for Politics SE.
    – Michael Hall
    Commented May 4, 2023 at 15:41
  • 3
    "Unless lawmakers actually like playing chicken..." They might like that, even see it as essential to politics.
    – NoDataDumpNoContribution
    Commented May 5, 2023 at 6:33
  • "Less debt is better then more debt". That's a bit of a generalization, and there are certainly circumstances where that's not true.
    – DJClayworth
    Commented May 7, 2023 at 22:32

2 Answers 2

Reset to default
4

Why doesn’t the legislature just get rid of the debt ceiling?

Legally, Congress enacted the debt-ceiling legislation and it is entirely within its ability to repeal or revise it.

That, however, requires both the House and Senate to pass any such legislation and then the President to sign it.

Politically, it appears that there is no desire on the part of either party to repeal the debt-ceiling law.

Improve this answer
5
  • There is a Senate bill that would abolish the debt ceiling. It has not been voted on yet.
    – xyldke
    Commented May 5, 2023 at 6:55
  • If the debt ceiling law was repealed, the result would be that the US government would become unable to issue any new bonds at all - effectively, the debt ceiling would become 0, not infinite.
    – nick012000
    Commented May 5, 2023 at 12:01
  • 1
    @nick012000 Why? Article I section 8 of the Constitution allows congress "to borrow money on the credit of the United States". Could you explain why you say that repeal of the debt ceiling would make the ceiling zero rather than infinite?
    – Steve Kidd
    Commented May 5, 2023 at 16:42
  • 2
    @SteveKidd That clause of the Constitution requires Congress to pass a law to borrow money. The point of the debt ceiling law is to simplify the process so that Congress has authorised the issuing of debt up to a certain amount automatically, rather than explicitly passing a bill every time they want the government to issue bonds.
    – nick012000
    Commented May 5, 2023 at 21:26
  • @nick012000 My confusion arose over the semantic difference between abolish the debt ceiling and repeal the debt ceiling law. You clearly said the latter, so the misunderstanding was mine.
    – Steve Kidd
    Commented May 6, 2023 at 17:14
-3

Generally, a debt ceiling is a debt limit mechanism. It would (if the ceiling is not lifted) result in a somewhat balanced budget (either by increasing taxes or reducing expenses). The desire for balanced budgets exists in many countries. The rationale behind that is "that they reduce deficit spending and constrain politicians in making irresponsible short-term spending decisions when they are in office" And "research shows that balanced budget amendments lead to greater fiscal discipline.".

So, the game of chicken during the times when the debt ceiling is reached in the US might not only be for power games but might actually result in greater fiscal discipline than without (albeit the US version is kind of risky, what if they really do happen to default by chance).

And in 2023 this was actually the case. In the Fiscal Responsibility Act of 2023, which was a deal between both big US parties struck in May and voted on and signed in early June, the debt ceiling was increased and federal spending was capped. It's reasonable to assume that without a debt ceiling, federal spending wouldn't have been cut at this point and debt would have been higher than without the debt ceiling. It's debatable though if the increased uncertainty during the negotiation phase was worth the relatively modest cuts in budget, i.e. if this is the most efficient format to decide budgets.

Improve this answer
5
  • 1
    This is plainly disproved by the fact that the debt ceiling exists and they still don't pass balanced budgets.
    – user20574
    Commented May 5, 2023 at 18:59
  • @user253751 They always increase the debt limit. It's not really a limit, if it grows all the time. And anyway you would have to compare with the situation without the debt ceiling. Maybe there the budgets would be even less balanced.
    – NoDataDumpNoContribution
    Commented May 5, 2023 at 20:20
  • @user253751 You already posted that comment elsewhere. Doesn't make it more true though.
    – NoDataDumpNoContribution
    Commented May 5, 2023 at 20:23
  • You don't believe that the purpose of a system is what it does?
    – user20574
    Commented May 5, 2023 at 20:26
  • @user253751 I surely don't believe there is only panic happening when the debt ceiling is hit. This is an oversimplification that misses important points.
    – NoDataDumpNoContribution
    Commented May 6, 2023 at 19:56

Not the answer you're looking for? Browse other questions tagged .