# The debt ceiling is idiotic. What would be better? **URL:** \ **Category:** Great Debates\ **Created:** [October 16, 2013, 4:33pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403 "2013-10-16T16:33:55Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [October 16, 2013, 7:55pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/21 "2013-10-16T19:55:59Z")
> [@Budget\_Player\_Cadet](#): > > Funny story - as long as GDP increases similarly to debt, we’re doing just fine. The _meaningful_ number is not 17 Trillion. It’s 73.6%. America isn’t even in the top 30 countries in terms of debt by GDP, and at this point it’s kind of hard to say at what point it’d be a problem, especially when T-bills remain the number one hard asset and the USA prints its own currency, making inflation a possibility. The US debt is not the problem people make it out to be. You want me to look at 17 trillion and gasp in horror. I look at it and think, “Man, Japan is _waaaay_ worse in debt than we are, and they don’t have any large problems because of it”. We can still borrow, given how much people like T-bills (even when the net interest rate is close to or even below inflation), and it doesn’t look like that’s likely to change in the short or long term. You can’t hand wave away 17 trillion dollars of debt. We don’t have to be in the top 30 countries in terms of debt by GDP for it to matter. The world turns on our financial strength and if we continue increasing our debt then we will collapse taking everybody with us. It matters greatly that we pay our debt off and not raise it. It’s our financial responsibility to the generations that follow. ---
**Author:** ![Left\_Hand\_of\_Dorkness](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/left_hand_of_dorkness/32/7156_2.png) [@Left\_Hand\_of\_Dorkness](https://boards.straightdope.com/u/Left_Hand_of_Dorkness)\ **Post date:** [October 16, 2013, 7:56pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/22 "2013-10-16T19:56:27Z")
> [@hansel](#): > > From the Westminster system, adopt the idea that failing to pass a budget is a vote of no-confidence that dissolves [del]Parliament[/del]Congress, leading to immediate elections. Put the incentive on actually finding a budget that passes. One of the many drawbacks to the piecemeal spending/authorizing done now is it obscures the big picture, holds hostage spending issues that lean one way or the other ideologically (thus triggering a partisan battle), offers the possibility of deferring one issue to handle another until it’s too late, and becomes a perpetual series of crises–as you’re seeing now. Actually, I really like this. No budget? In thirty days, there’s a full election. Would you make it house-only, or house and senate both? The latter might be difficult due to the rotational nature of Senate seats–maybe what’d happen is that people would fill a senate seat for the remainder of its term, not for a full six-year term. Even then, I wonder whether, absent the Hats, most of Congress would just get re-elected and the problem would continue. ---
**Author:** ![Richard\_Parker](https://avatars.discourse-cdn.com/v4/letter/r/35a633/32.png) [@Richard\_Parker](https://boards.straightdope.com/u/Richard_Parker)\ **Post date:** [October 16, 2013, 8:02pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/23 "2013-10-16T20:02:42Z")
The principal driver of long-term debt is Medicare and parts of Medicaid. Potential changes to our spending and borrowing rules fall into two categories: ones that are easier to pass than reform of Medicare/Medicaid and ones that are harder to pass than that reform. If it’s easier to pass than reform of Medicare/Medicaid, then it will be ignored or amended once Medicare/Medicaid spending requires it to be ignored or amended. If it’s harder to pass than reform of Medicare/Medicaid, then we should just reform Medicare/Medicaid. Under **Left Hand of Dorkness** ’s proposed amendment, we will start cutting back for care of seniors rather soon (since it will be limited to last year’s budget while the number of old people and medical costs both increase) and both parties will start inventing very stylish hat-holders. Given the difficulty of passing a constitutional amendment, we should just reform the thing actually driving these (incorrectly perceived) short-term crises and actual long-term problems, ideally in a way that tracks medical costs so that the reforms never need to go into place if Obamacare is successful at bending the cost curve (as it seems to have been lately). ---
**Author:** ![Left\_Hand\_of\_Dorkness](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/left_hand_of_dorkness/32/7156_2.png) [@Left\_Hand\_of\_Dorkness](https://boards.straightdope.com/u/Left_Hand_of_Dorkness)\ **Post date:** [October 16, 2013, 8:04pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/24 "2013-10-16T20:04:57Z")
> [@Richard\_Parker](#): > > Under **Left Hand of Dorkness** ’s proposed amendment, we will start cutting back for care of seniors rather soon (since it will be limited to last year’s budget while the number of old people and medical costs both increase) and both parties will start inventing very stylish hat-holders. Nah. The Hats are key: nobody wants to wear the Hat in a debate or fundraiser. There might be one year of not passing a budget, but it’s gonna be lots easier to upset an incumbent in the Hat. ---
**Author:** ![Richard\_Parker](https://avatars.discourse-cdn.com/v4/letter/r/35a633/32.png) [@Richard\_Parker](https://boards.straightdope.com/u/Richard_Parker)\ **Post date:** [October 16, 2013, 8:06pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/25 "2013-10-16T20:06:20Z")
Are they, like, bowlers? Or does the legislator get to choose the type of hat? ---
**Author:** ![Terr](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@Terr](https://boards.straightdope.com/u/Terr)\ **Post date:** [October 16, 2013, 8:09pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/26 "2013-10-16T20:09:50Z")
There is a fairly simple fix. Pass the legislation that says that the budget (CR, whatever) bill HAS to include in it, explicitly, authorization to borrow enough to fund the budget (CR) if such borrowing is needed, with the exact amount of such authorized borrowing specified. ---
**Author:** ![blindboyard](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/blindboyard/32/2833_2.png) [@blindboyard](https://boards.straightdope.com/u/blindboyard)\ **Post date:** [October 16, 2013, 8:13pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/27 "2013-10-16T20:13:31Z")
No other country needs one. It serves no obvious purpose. Get rid. ---
**Author:** ![dracoi](https://avatars.discourse-cdn.com/v4/letter/d/90db22/32.png) [@dracoi](https://boards.straightdope.com/u/dracoi)\ **Post date:** [October 16, 2013, 8:16pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/28 "2013-10-16T20:16:36Z")
> [@Fear\_Itself](#): > > Hammers have a known utility for driving nails. What is the known utility of a debt limit? It is disconnected from appropriations, so reaching it doesn’t reduce spending. So what justifies it except as a wedge to be used by those who lack the political power to reach their goals through legislation, and are willing to risk the global economy to achieve them? The utility of the debt ceiling is that appropriations bills are not directly connected to debt. Revenues are only estimates at the time the appropriations are made, and revenues vary from month to month anyway. The Treasury (Executive branch) issues the debt, but needs authorization from Congress (Legislative branch) to do it. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [October 16, 2013, 8:19pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/29 "2013-10-16T20:19:13Z")
> [@blindboyard](#): > > No other country needs one. It serves no obvious purpose. Get rid. How many cities in the United States are close to defaulting? Can’t they just raise their debt ceiling and borrow their way out of the problem? ---
**Author:** ![Grey](https://avatars.discourse-cdn.com/v4/letter/g/b782af/32.png) [@Grey](https://boards.straightdope.com/u/Grey)\ **Post date:** [October 16, 2013, 8:20pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/30 "2013-10-16T20:20:40Z")
Sure, as soon as they become sovereign states. ---
**Author:** ![dracoi](https://avatars.discourse-cdn.com/v4/letter/d/90db22/32.png) [@dracoi](https://boards.straightdope.com/u/dracoi)\ **Post date:** [October 16, 2013, 8:21pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/31 "2013-10-16T20:21:38Z")
> [@Budget\_Player\_Cadet](#): > > This is a fundamental misunderstanding. The debt ceiling does not “shut down” the government. It effectively declares it for insolvent. It means we can no longer borrow money, and when the deficits are this large, we’re essentially dealing with, in the very best case scenario, a default of our obligations in Medicare and Social Security. Worst case scenario, a default of our national debt, which would mean that T-bills, essentially the last bastion of reliable financial security, and one of the fundamental things on which the entire world’s current economy bases, may not ever pay out. The results will be, in any case, catastrophic. This is not simply “the government shuts down”. > > Well, no. The fact that the debt ceiling is being used as a political pawn is _utterly relevant_, because it means that the USA basically has a way for a majority of one house of congress, or a president, to say, “Nope, fuck you, world economy, we are bankrupt now”. It’s less like a hammer and more like a nuclear warhead in terms of impact. How is any of this different from the House refusing to pass any appropriations bill that includes Obamacare? The debt ceiling is not the problem. The problem is that a minority of one party is willing to throw out the baby with the bath water. If you deny them mechanism A, they’ll use mechanism B. As long as the US Constitution says the House must originate spending and that the Executive branch can only spend what is authorized by the Legislative branch, all you can change is the name of the problem, not the problem itself. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [October 16, 2013, 8:35pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/32 "2013-10-16T20:35:24Z")
> [@dracoi](#): > > The utility of the debt ceiling is that appropriations bills are not directly connected to debt. Revenues are only estimates at the time the appropriations are made, and revenues vary from month to month anyway. The Treasury (Executive branch) issues the debt, but needs authorization from Congress (Legislative branch) to do it. That’s a bug, not a feature. The President is bound by law to spend the money appropriated by Congress, without regard to revenue. If Congress wants to limit borrowing, let them balance the budget. It is not the perogative of the executive branch to decline to carry out the will of Congress just because appropriations exceed revenue. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [October 16, 2013, 8:51pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/33 "2013-10-16T20:51:25Z")
> [@Magiver](#): > > I can give 17 trillion reasons for spending limits. > > There seems to be some odd belief that the United States can increase it’s debt indefinitely. Not sure why people think this way. We’re seeing cities like Detroit in default. This was one of the most productive pieces of real estate in the United States and now the city looks like an impoverished 3rd world country. > > Look at the financial situation in California. We’re living in a house of cards and nobody seems the least bit concerned. From the esteemed economic think-tank, [the UsefulNotes section of TVTropes.org](http://tvtropes.org/pmwiki/pmwiki.php/UsefulNotes/Economics): > [@](#): > > [Fallacy No.] **6.** America the bankrupt: National debts don’t work like your personal debt. For example, people don’t buy your debt to prop up your currency. Yet for some reason a lot of writers tend to think of the national debt in the same terms as a bank loan, with angry creditors and everything. When this trope is invoked expect to see a consortium of angry foreign dignitaries banging on a conference table that they want their money back. In reality, if countries actually acted like this, the global financial system would probably collapse pretty spectacularly and everyone would be screwed. This trope is not specific to America, but for some reason Americans are exceptionally paranoid about the National Debt, particularly when the Chinese are buying it up, and now not buying it anymore. Oddly enough, America’s National Debt isn’t even that bad by international standards. Also, the US national debt is in terms of dollars, and the government can create as many dollars as they need to pay off the debt. Everyone would be paid the amount owed, but the new dollars would lead to inflation. The key here is that governments usually owe substantial portions of their debt to ‘themselves,’ i.e. either the government owes money to different branches, or those branches hold their assets as bonds and treasury bills instead of money; by owing money to yourself, you usually don’t charge yourself interest (beyond inflation) and you theoretically can’t default on money you owe yourself. This is how Japan can have gross debt worth over 100% of their yearly economic output and have little economic effects: 70-80% of its debt is owned by the Japanese Central Bank. In the United States, around 35-40% of the government debt is owed to itself, mainly to the Social Security Administration. Also, debt owned to foreign entities makes up MUCH less of the debt than people seem to think: as an example, China owns only 6% of the total US debt. ---
**Author:** ![TheSeaOtter](https://avatars.discourse-cdn.com/v4/letter/t/ed655f/32.png) [@TheSeaOtter](https://boards.straightdope.com/u/TheSeaOtter)\ **Post date:** [October 16, 2013, 8:56pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/34 "2013-10-16T20:56:42Z")
> [@dracoi](#): > > The debt ceiling is not the problem. The problem is that a minority of one party is willing to throw out the baby with the bath water. Correction: The debt ceiling is not the _only_ problem. It is, however, _a_ problem, and it’s the problem this thread is addressing. A minority of idiots keeping Congress from functioning at all is a different problem, and one that requires a more complex solution, but removing this one problem would at least mitigate their ability to ruin the entire global economy. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [October 16, 2013, 10:51pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/35 "2013-10-16T22:51:16Z")
> [@Magiver](#): > > How many cities in the United States are close to defaulting? Can’t they just raise their debt ceiling and borrow their way out of the problem? Perhaps their problem was with Mr. Bush’s recession? States and cities have balanced budget requirements. These clearly don’t do much good. Not to mention that states and cities don’t get to print money. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [October 16, 2013, 10:57pm UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/36 "2013-10-16T22:57:20Z")
> [@Magiver](#): > > I can give 17 trillion reasons for spending limits. > > There seems to be some odd belief that the United States can increase it’s debt indefinitely. Not sure why people think this way. We’re seeing cities like Detroit in default. This was one of the most productive pieces of real estate in the United States and now the city looks like an impoverished 3rd world country. First if debt is a constant or shrinking percentage of GNP, we are fine. Find us a legitimate economist who says otherwise. The deficit, by the way, has shrunk significantly, so you should be dancing in the streets. Of course Bush blowing up the budget to support an unfunded war was fine, but to help us recover from his recession was terrible. Second, if you don’t like the deficit don’t spend as much or tax more or do some combination of the two. The debt ceiling is like trying to stop eating cookies by putting the tin on a high shelf. Frog and Toad learned this lesson, why not Republicans? The irrelevance of Detroit has already been mentioned. > [@](#): > > Look at the financial situation in California. We’re living in a house of cards and nobody seems the least bit concerned. You mean our budget surplus? Which we got to more or less the moment the voters made the Republican party totally irrelevant in state government. If we can do the same in Washington we’ll be in good shape. ---
**Author:** ![hansel](https://avatars.discourse-cdn.com/v4/letter/h/6bbea6/32.png) [@hansel](https://boards.straightdope.com/u/hansel)\ **Post date:** [October 17, 2013, 12:02am UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/37 "2013-10-17T00:02:23Z")
> [@Left\_Hand\_of\_Dorkness](#): > > Actually, I really like this. No budget? In thirty days, there’s a full election. Would you make it house-only, or house and senate both? It’s hard to avoid the feeling that dismissing one wouldn’t solve the problem when the fighting and brinksmanship could just move to the House/Senate split. Both. They can produce a budget in conference, as they’re planning to do now. > [@Terr](#): > > There is a fairly simple fix. Pass the legislation that says that the budget (CR, whatever) bill HAS to include in it, explicitly, authorization to borrow enough to fund the budget (CR) if such borrowing is needed, with the exact amount of such authorized borrowing specified. AKA [The Gephardt Rule](http://www.theatlantic.com/politics/archive/2011/05/how-dick-gephardt-fixed-the-debt-ceiling-problem/238571/) ---
**Author:** ![PhillyGuy](https://avatars.discourse-cdn.com/v4/letter/p/ed655f/32.png) [@PhillyGuy](https://boards.straightdope.com/u/PhillyGuy)\ **Post date:** [October 17, 2013, 12:17am UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/38 "2013-10-17T00:17:38Z")
> [@Learjeff](#): > > If we accept the idea that we should restrain the government’s ability to pile up debt without limit, what would be a more effective way? I question the premise. Passing a law that says you can’t pass a law usually fails. That’s what the [Budger Control Act of 2011](http://en.wikipedia.org/wiki/Budget_Control_Act_of_2011) did. It set up a situation where Congress (and everyone else in the country) is penalized unless the parties agree on a long term plan to control deficits. And we are paying the penalty. It appears to me that, of the two parties, the GOP is less fiscally responsible because of unwillingness to raise taxes and predilection for lower taxes. And they are almost as bad as the Democrats when it comes to unfunded mandates, such as the proposed Obamacare repeal, and paying government workers, idled over the past three weeks, for doing nothing. So I would say that the more effective way would be to elect Democrats for a while. I’m not saying this is a perfect solution, and ten years from now I might decide to give a modernized GOP another chance. But for now, electing Democrats is the most realistic plan for fiscal sanity. ---
**Author:** ![Uncle\_Jocko](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/uncle_jocko/32/2932_2.png) [@Uncle\_Jocko](https://boards.straightdope.com/u/Uncle_Jocko)\ **Post date:** [October 17, 2013, 2:58am UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/39 "2013-10-17T02:58:52Z")
> [@Farin](#): > > Go back to the pre-WW1 days when Congress had to approve each and every debt instead of letting the president spend at his behest. The President spends at his behest? I don’t get this. Does the President just throw money around willy-nilly at whatever catches his eye, or does the executive branch spend money appropriated by the legislative branch? Or are you saying Congress writes up spending bills in a general fashion, and the executive decides who gets paid what? Personally, I don’t want Congress involved in deciding the day-to-day bookkeeping of the government, thank you. > [@Magiver](#): > > Oh hell no. We recently had a school superintendent put forth a levy for new schools and he spent twice that and damn if he didn’t get a second levy to cover it. He then left the district for a better job. Screw that. I’d make public officials financially liable for their decisions up to and including forfeiture of all their assets. Aren’t school levies decided by a public vote? They are in my district … is yours different? If the voters were convinced the levies were worthwhile, why are you blaming the superintendent? ---
**Author:** ![jasg](https://avatars.discourse-cdn.com/v4/letter/j/f0a364/32.png) [@jasg](https://boards.straightdope.com/u/jasg)\ **Post date:** [October 17, 2013, 5:39am UTC](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403/40 "2013-10-17T05:39:37Z")
The bill passed tonight, Oct 16th, allows the President to increase the debt limit unless Congess passes a bill objecting to the increase within 22 days. It can be vetoed. This plan was proposed by McConnell during the last crisis and added to the current bill. [Previous page](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403.md?page=1) [Next page](https://boards.straightdope.com/t/the-debt-ceiling-is-idiotic-what-would-be-better/671403.md?page=3)