— Dr. Daniel E. Loeb
The United State and Denmark are the only countries in the World that have an official debt ceiling. In most countries, once the Legislature establishes a budget authorizing certain expenses and establishing a tax policy, simple arithmetic indicates how the Legislature’s decisions will increase or decrease that countries debt.
Only Denmark has a system similar to the United States where the legislature has to approve increases to the debt separately from approving the budget. The Danish set the ceiling high enough so that it never slows the process of borrowing money and they can avoid political conflicts like the one currently gripping the U.S.
Barry Bosworth, a senior fellow at the Brookings Institute, said the U.S. debt ceiling “has no logical basis.”
Congress, through budget and appropriations bills, has sole authority to decide how much the government will spend, so he said “it makes no sense to have a secondary rule to then object to the deficit that emerges from the other decisions.” (ABC News)
Perhaps Congress should have sought additional revenues by — for example — allowing the Bush tax cuts to expire, or by taxing the income of hedge fund managers and corporations the same way they tax the income of working Americans.
Perhaps Congress should have decreased expenses by — for example — pulling out of Afghanistan or switching to a single-payer health insurance system and empowering it to negotiate with pharmaceuticals for the best possible rates.
However, having not done so, Congress has caused that the national debt to increase, and failing to honor the resulting commitments is irresponsible and probably an unconstitutional violation of Section 4 of the 14th amendment.
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.
The Tea Party often uses the household budget as a model for the U.S. budget. However, suppose my wife and I decided to work in jobs earning a total of $50,000, and we decided to make purchases totaling $100,000. Eventually, the credit card bill arrives and showing an increase in debt as a direct consequence of the choices I made. Do I have the right to impose a “debt ceiling” and refuse to recognize the debt I have incurred about this arbitrary limit?
And surely the United States Congress does not have the right to hold the “full faith and credit” of the United States hostage to their political agenda.
New York Times chart breaking down the source of the debt follows jump.