Why are the negotiations about raising the debt ceiling rather than abolishing it?
You would think this ridiculous loaded gun lying round the House for the children to play with was a hallowed part of the US Constitution, and not a silly recent invention contrary to its clearly stated intent.
Because the DP is weak. Though, I actually quite like Reid and Pelosi.
Or, maybe it’s corrupt? But I try not to “go there.”
Representative government in the US is in trouble; the debt ceiling crisis is a symptom. The House members who have signed Grover Norquist’s tax pledge, supposedly because that is what their constituents want, committed themselves to a particular vote on a particular issue before the debate on that issue even began. They think that they are doing just “what the people want,” which is fine if you want a surrogate for direct democracy, but is contrary to the spirit of having a republic. The people elect representatives to advance their interests and values (freedom, security, a future for their children, etc), and the representatives go to the seat of government and do something demanding and difficult. They meet with representatives from other factions and other regions of the country, they gather information which is not generally available to their constituents, and they engage in deliberations which the people have no time to engage in. These deliberations must integrate the basic values of the people with existing laws and obligations, must take into account complex situations and specialized information requiring expert interpretation, and must come up with legislation which subordinates popular preferences to Constitutional principles and external realities. A commitment in advance to vote yea or nay amounts to an abdication of republican principles.
How many times have we heard it said that we live in a republic and not a democracy? A republic places severe constraints on populism; a democracy is more permissive and bends more readily to whims and to wishful thinking. If the Republicans have lost interest in republicanism, who will save the Republic?
The analogy I keep coming up with – the budget process is where the government decides how much to put on the credit card while the debt limit is where we decide whether or not to pay it off. Am I missing somthing? Because if that’s the case, paying it off really isn’t optional, it does seem like a pointless exercise.
And while I’m asking questions – has any government voluntarily put itself in default while it had the means to continue to pay its debts as the US is in danger of doing? Ever?
Ed, well put, and I’d add only that, if representatives made an effort to educate their constituents instead of pandering to them, then doing what is right might often coincide with what the people want. To pander is to disrespect one’s constituents and to encourage them in their ignorance, which, in a vicious circle, causes representatives to pander more and to find it necessary to abdicate republican principles.
Your post gives a unique visual meaning to some ideas being floated:
A clean McConnell versus a dirty McConnell…
http://jaredbernsteinblog.com/were-all-ears-mr-president/
Drkrick: Possibly Soviet Russia, February 1918. See here. It’s not clear whether Russia did have the means to pay, but the Soviets went out of their way to burn their boats with Tsarist creditors:
“All State loans concluded by the Government of Russian landlords and bourgeoisie …
are hereby repudiated as from December 14, 1917…. All foreign loans, without exception, are absolutely repudiated.”
I don’t think the South ever paid back their Civil War debts, and neither did the USA.
Ex-countries don’t have to repay squat.
Henry,
if representatives made an effort to educate their constituents instead of pandering to them, then doing what is right might often coincide with what the people want. To pander is to disrespect one’s constituents and to encourage them in their ignorance,…
Indeed. At some point in my youth I was taught that education was among the responsibilities of leadership. That is, the leader has an obligation to explain the realities of the situation, any situation, to the followers. Failure to do so is dereliction of duty.
I wish it were that simple, James. If this were simply an argument about reducing spending and the Republicans blocked all attempts to fund the government through the budget, including continuing resolutions, that would be one thing. But playing chicken with default is another thing altogether. I wish this argument were about the former and not the latter…
These comments make interesting reading and would be instructive if the politicians being discussed actually had “public service” as their goals.
Virtually every member of the Republican Party has long since abdicated that responsibility. (Tragically, the Democrats, in the last several decades especially, have been sprinting to catch up)
What bugs me the most, a point that has been touched upon by other posters here, is the lack of effort by our representatives, including the President, to teach the public about the issues they are expected to vote on.
While he was never a “public servant, I kind of miss Ross Perot and his charts & diagrams.
Didn’t Obama say just a couple of days ago, during his reported spat with Cantor, that he was going to “take it to the American people”?
When do you suppose he’s going to do that?
“Why are the negotiations about raising the debt ceiling rather than abolishing it?”
Because polling shows the public 2-1 against raising the debt ceiling. Raising the debt ceiling to infinity probably would not go over very well. Most members of Congress want to be reelected.
“The analogy I keep coming up with – the budget process is where the government decides how much to put on the credit card while the debt limit is where we decide whether or not to pay it off. Am I missing somthing? “
Yes, you’re missing the utter disconnect between not raising the debt ceiling, and a decision to default. Here’s a clue, in case you never had a credit card: It’s possible to make payments on your credit card, even pay it down and eventually off, without having your card’s limit periodically raised.
Brett, the time to do that was while your crew was in power. It’s not honestly deniable that this whole GOP concern with the deficit and debt restarted in January, 2009.
MobiusKlein says:
“I don’t think the South ever paid back their Civil War debts, and neither did the USA.”
I really doubt that the USA didn’t repay the Civil War debts; there would have been a whole lot of powerful financial interests who held that debt.
Brett: the public are against raising the debt ceiling (a) because it exists (unnecessarily), (b) they don’t understand the issue or the clear warning in the 14th Amendment to the US Constitution not to mess with the public debt. (They don’t share your small-government ideology, which is at least consistent if IMHO absurd.) The debt limit has to be increased immediately regardless of public opinion to avoid economic disaster. So why not bite the bullet and rejoin the community of civilised nations, like the USA itself before 1917?
“It’s possible to make payments on your credit card, even pay it down and eventually off, without having your card’s limit periodically raised.”
Here’s a clue, because you apparently don’t have a credit card, but isn’t possible to do this if your automatic bill payments scheduled to your card are higher than the check you send them every month. Analogy fail.
Brett Bellmore: ” “The analogy I keep coming up with – the budget process is where the government decides how much to put on the credit card while the debt limit is where we decide whether or not to pay it off. Am I missing somthing? “
Yes, you’re missing the utter disconnect between not raising the debt ceiling, and a decision to default. Here’s a clue, in case you never had a credit card: It’s possible to make payments on your credit card, even pay it down and eventually off, without having your card’s limit periodically raised. ”
Thanks, Captain Obvious. As I remember, we were doing that back at the turn of the century and George Bush and Alan Greenspan decided it was a dangerous practice we had to stop. I look forward to the day we can return to it. My point is that the time to decide how much you’re going to put on the card is during the budget process, when you decide on spending. Once it’s on the card, pretending that paying it off is optional is a dangerous delusion.
On Civil War debts – the USG paid off its own debts, but not those of the alleged Confederacy. Holders of that debt were in bad enough position with the Federal Government as a result of their willingness to make the loans, so making a fuss about the lack or repayment wasn’t considered a particularly wise move.
“but isn’t possible to do this if your automatic bill payments scheduled to your card are higher than the check you send them every month. Analogy fail.”
Just because you put your spending on autopilot doesn’t mean you can’t cut it back. To extend your analogy, call the cable company, and tell them you don’t need HBO anymore. Stop spending TARP funds. Put a hold on illegal wars.
Paying our debts is constitutionally privileged over all other forms of spending. A shortfall, constitutionally, can not cause a default until debt service exceeds revenue. Right now it’s at about 20% of revenue, meaning we have zero excuse to default. If a default happens, it will be because the President decided to default, not because he was forced to.
“Because polling shows the public 2-1 against raising the debt ceiling.”
Are we sentient people here? How many studies do we need showing that what the “public” wants, or “shows” are simply knee jerk, emotional, spur of the moment, reactions? The “public” also wants to “lock’em up, and throw away the key” for shop lifting.”
The “public” also wants wars you don’t have to pay for, entitlements, infinite services, no taxes……..and a balanced budget.
Unfortunately, we have one of the major political parties whose craven political philosophy is to read what the uninformed “public wants”, and turn it into legislation. Blech!
James asks why the debt ceiling isn’t being abolished. Not, why it would be a bad idea to abolish it. I answered the question: Because doing so would be very unpopular, politically. You might not like that, but that doesn’t make my answer wrong.
I happen to think abolishing the debt ceiling would be a bad idea. But that opinion had nothing to do with my answer.
Brett,
You have repeatedly argued that there will be no need to default because there will be more than enough to cover interest payments, so it’s just a matter of cutting other spending. OK, then. Tell us what you would cut, and what you think the consequences would be.
According to the Bipartisan Policy Center the Treasury will collect $172.4 billion from Aug. 3 through Aug 31. This would cover interest, Social Security, Medicare and Medicaid, payments to defense vendors, and unemployment benefits. Making these payments would leave no money – none – for military or other federal salaries, the courts, or anything else. No money for highways, the FBI, EPA, education, etc. Can we just get along fine without all that (don’t overlook the impact on the economy), or should we cut Social Security benefits? What do you think?
Tell us what to cut. If you do you’ll show more honesty than the GOP loonies, who have not, to my knowledge, said what spending they would stop effective August 3.
1. Bring the troops home. Especially from the illegal war in Libya.
2. End the war on drugs.
3. Let the states build highways if they want ‘em.
4. Start raising the retirement age for social Security, maybe 3 months a year, until it better reflects the change in demographics.
5. Start selling off federal assets to pay down the debt, in order to reduce future debt servicing expenses.
By the way, you do realize that if we hadn’t been borrowing to pay for day to day expenses for most of my life, revenues would cover essentially all of expenses, because we wouldn’t have a huge debt to service? The longer we go without balancing the budget, the larger the fraction of revenue is going to be consumed by debt service, and we’re already so deep in debt that a return to normal interest rates would be almost an existential emergency. I don’t quite grasp why you want an ever growing fraction of revenue to be consumed by what amounts to an income transfer program that isn’t means tested…
I’m glad Brett is finally FINALLY beginning to understand why it is so disastrous to elect Republicans. Except I don’t think he’ll get it. He’s not able to actually add up figures like the deficit for each year of “most of his life”. If he could do that simple task, then he would realize that his existence has been futile. He’s just been a sucker for “most of his life”. We’ve known that for a long time.
Brett,
Sorry, but you get an “F.”
Why? Well, first, you didn’t answer the question. What checks should and should not be sent out in August? about that yu said not one word. Second, for your longer term suggestions, you provided no numbers at all. How much are we spending in Libya, in fact? How much does the “War on Drugs” cost? Be careful here. I’m not arguing the wisdom or lack thereof of those policies, just asking how much your proposed changes would save. Third, you ignore some important issues. If you are going to shift all responsibility for highways to the states, then you can’t really continue to collect taxes for highways at the federal level, can you?
So no. Like everyone else who claims it’s no big deal, you have no idea of how big a deal it is. You have bunch of gripes with the government, and this seems to be the way to express them. You’re entitled to your gripes, as are your allies, but to bring down the economy to express them is the behavior of an immature two-year old.
1. Shut down the CIA, Department of Defense, NSA, etc., 90%
2. The government should legalize and then sell drugs to raise revenue.
3. Spend money to allow the states to hire back all those employees they have laid off. Build more mass transit in those states intelligent enough to desire it.
4. Lower the retirement age for Social Security to increase opportunities for younger people in the labor market.
5. Buy underwater mortgages and give the occupants a chance to “rent to own” under better terms. Why sell when prices are low? That’s pretty stupid. The Fed should be buying….and by that I do not mean dodgy financial assets.
6. Anybody who wants a job and does not have one is a living embodiment of market failure. Spend the money to put that irreplaceable resource to use.
7. Nationalize the “too big to fail” banks.
By the way, did you know that if the private sector seeks to cut expenditures and pay down debt, ceteris paribus, then the government MUST run a deficit?
Bobbyp: Did you notice that, confronted with an enormous deficit, you only managed to come up with two suggestions for making the deficit shrink, before you got into the groove of spending more money?
Bernard: Suggestions 1-3 were for immediate implementation.
Sorry Brett, I do not share your deficit hysteria. Riddle me this: Through most of the 19th century, Britain carried a national debt in excess of 100% of GNP.
Brett,
Numbers, Brett? And you still have to pay the troops, don’t you? Are you going to disband the Army? Reduce it by how many? Bear in mind you’re adding to unemployment levels when you do this. Not to mention it’s going to cost to get them all home right away.
What does “end the war on drugs mean,” from a financial point of view? Disband DEA? Let prisoners go?
By the way, if you eliminated all military active duty pay, disbanded the Federal Highway Dept, and gave the DOJ no money at all, you’d save less than $10 billion in August. The shortfall is $134 billion.
And another thing. You complain that we’ve been borrowing to meet expenses your whole life. Well, have you looked who exactly did that? Did you complain when Bush did not propose a tax to pay for the Iraq War? When he doubled the national debt? No, and neither did all these born-again worriers over the debt. So spare me the tales of how it’s all the fault of the dirty hippie liberals. It’s not. Those tales are lies. To the extent there is a problem, it’s overwhelmingly the fault of the party who believed that “Reagan proved deficits don’t matter.” Who said that again?
[...] realize there’s one. And you can see that in our current national debate, as James Wimberley recently suggested that we’ve having the wrong debate – “Why are the negotiations about raising the debt [...]