Treasury Secretary Timothy Geithner has taken a lot of criticism for proposing the elimination of the US debt ceiling. But what is the point of a debt ceiling if we crash through it on a rocket-propelled spending binge every time we get there? As a debt-control measure, the debt ceiling is a complete failure, one the private-sector would have long-ago relegated to the ash-heap of failed innovation. As a blame-sharing device, it’s ingenious.
This is hardly a new idea. Thomas Sowell wrote a column in July 2011 entitled “Debt Ceiling Chicken” in which he addressed this same idea. Objectively, the debt ceiling serves only as a mechanism by which the Democrats and other non-conservatives can run up the debt and get all the credit for handing out goodies, but redistribute the blame when the bill comes due.
As Sowell writes:
Too many policies, programs and institutions are judged by what they are supposed to do, rather than by what they actually do and the consequences of their actions. The United Nations, for example, survives as a glorious idea, despite how corrupt, counterproductive and even dangerous its actions are.
The national debt-ceiling law should be judged by what it actually does, not by how good an idea it seems to be. The one thing that the national debt-ceiling has never done is to put a ceiling on the rising national debt. Time and time again, for years on end, the national debt-ceiling has been raised whenever the national debt gets near whatever the current ceiling might be.
Regardless of what it is supposed to do, what the national debt-ceiling actually does is enable any administration to get all the political benefits of runaway spending for the benefit of their favorite constituencies — and then invite the opposition party to share the blame, by either raising the national debt ceiling, or by voting for unpopular cutbacks in spending or increases in taxes.
Ahead of the last debt ceiling debate, Tea Party friendly politicians and grassroots patriots were making headway on the inglorious issue of our fiscal solvency. Before it was over, the Tea Party freshmen in Congress had been redefined as irresponsible demagogues hell bent on shutting down the government.
In theory, the debt ceiling is a wonderful idea, but it is a utopian fantasy that’s less effective at constraining the debt than Barack Obama’s tax hikes on job creators will be at eliminating his massive deficit. Let’s cast aside this lousy crutch, and embrace the war for fiscal solvency. Or, if you still believe in the debt ceiling, fight like hell to keep Congress from raising it.