TED Conversations

Robert Winner

TEDCRED 100+

This conversation is closed.

Should the USA again raise the debt ceiling?

The United States will reach its debit limit by October 18 and could default by Nov 5. As the national debit races toward 17 Trillion (see us debit clock.org) the US continues to outspend its congressional mandated limits as well as exceeding the GDP. It is increasingly harder to even pay the interest on the loans the US is making.

In a poll by NBC news and wall street journal the citizens have voted 44% to 22% to not raise the debit limits ... again.

At some point Congress and the Administration need to be held accountable for mismanagement and gross incompetence.

Default carries some consequences ... the question is are those consequences greater than the financial collapse of the government.

How could this be resolved .. avoided.

Share:

Showing single comment thread. View the full conversation.

  • thumb
    Sep 17 2013: The entire idea of a debt ceiling is completely ridiculous. It's a policy designed to produce self-inflicted wounds. I would argue that a debt ceiling is more likely to promote dysfunctional budget policy than not, and probably equal likely to lead greater or reduced deficit spending (because any deal to change the debt ceiling can have one of two outcomes - taxes raised/spending reduced, which is pain for both parties, or taxes lowered/spending increased, which are jollies for both parties).

    This doesn't mean that there are no mechanisms to impose discipline on the budget process. In the 1990s, we had pay as you go, which meant that every dollar of additional spending (or tax reduction) needed to be funded from something else. Admittedly, this could get flabby because the "smoething else" could be something weak like greater projected growth, but by and large this system improved discipline without creating any ridiculous crisis scenarios, and contributed to the elimnation of the budget deficit in the '90s.

    If either side were serious, it would seem a reasonable trade to make would be elimination of the debt ceiling in exchange for reenactment of a more sensible disciplining policy of this vein.
    • thumb
      Sep 18 2013: Do you max-out all your credit cards and then apply for new ones to pay those? Do you use your credit to buy anything and everything possible? Do you have any self-imposed limits for your personal expenditures? Fighting drug addiction by increasing drug use is a doomed strategy, good only for the suppliers/pushers. Who are the suppliers/pushers of credit/debt?. . .

Showing single comment thread. View the full conversation.