The federal debt limit is actually a case of mistaken identity, according to Concord Coalition Executive Director Robert L. Bixby.
“While you would think that a ‘debt limit’ would exert control over the nation’s fiscal policies, it does not,” he says in a recent interview. “It only limits the government’s ability to pay bills it has already incurred. But the tax and spending decisions that require more borrowing have already been made.”
In the interview, with Paul Owens of the Orlando Sentinel on various questions about the debt limit, Bixby also notes that no one in either party has even suggested a budget plan that could prevent further borrowing in the immediate future. That is what makes it imperative for Congress to raise the debt limit.
There is good reason for public skepticism about lawmakers who insist on certain conditions to raise the debt limit. Bixby points out that many of the members of Congress who resist raising the limit have approved the fiscal policies that make such an increase necessary.
In addition, he says, “the problem with using a potential default to make partisan demands is the implicit assumption that your opponent won’t be as irresponsible as you.”
External links:
Concord Issue Brief on Federal Debt
The Potential Macroeconomic Effect of Debt Ceiling Brinksmanship (Treasury Department)
Federal Debt and the Statutory Limit (CBO)
