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It’s Time to Eliminate the Dumb Debt Ceiling
As we stand on the brink of another potential debt ceiling crisis, it’s time to recognize that the debt ceiling, a unique feature of American law, is a foolish and dangerous instrument that threatens the stability of our economy.
Proponents of the debt ceiling argue that it promotes fiscal responsibility and forces bipartisan compromise in Congress. But that argument belies the reality that it often serves as a political weapon, used to wring concessions from the opposing party. The consequences are significant; the constant threat of default introduces uncertainty into our economy, undermining confidence and potentially sparking a recession.
The Democrats had the opportunity to eliminate this perilous game when they held control, but the moment was missed. Now, faced with Republican threats of default if budget negotiations do not meet their demands, unconventional and legally uncertain methods of bypassing the debt ceiling are on the table.
These propositions include the possibility of President Biden invoking the 14th Amendment to declare the debt ceiling unconstitutional or the Treasury Department using a loophole to mint a platinum coin of arbitrary value. Yet, these ideas are untested, legally dubious, and, importantly, would require time-consuming litigation — time we do not have in a debt crisis.
