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Reason Foundation

Good Idea, Wrong Time

The trouble with the debt ceiling debate

David Harsanyi
July 20, 2011

When a reporter recently asked President Barack Obama about the House Republican efforts to pass the Cut, Cap and Balance Act of 2011, Obama explained that politicians "don't need a constitutional amendment to do our jobs. The Constitution already tells us to do our jobs—and to make sure that the government is living within its means and making responsible choices."

Dear God, we're doomed.

Remember that the president's last tangible stab at a "responsible choice" was a budget that would have added $9 trillion of debt over the next 10 years. This was months before he realized the debt ceiling debate and "economic Armageddon" could bring about political opportunity. The White House went on to call the bill, which trades a debt ceiling increase for a constitutional balanced-budget amendment and caps on spending, "extreme, radical and unprecedented."

Considering nearly every state works with similar restrictions, it's not exactly unprecedented. And if it's "extreme, radical and unprecedented" to the administration, it undoubtedly makes plenty of fiscal sense. Certainly, it's easy to understand why an embedded statutory and/or constitutional limit on spending is enticing to many voters. But can we force fiscal restraint on those who don't want it?

Remember pay-as-you-go legislation? Passed to offset the cost of increased spending and reduced revenues, it exists in name only to both parties. The so-called "debt ceiling" is a similar abstraction. It reminds me of my biyearly "weight ceiling" pledge—as in, there is none. Any ceiling that is always raised and then set as some new arbitrary level that is negotiated solely by the ones who are borrowing ... well, that doesn't comport to any definition of "limit." That's a federal budget.

The rating agency Moody's recently suggested that the debt ceiling be done away with completely, not because it's an artificial cap, but because it creates "periodic uncertainty" about our ability to meet our obligations. Notice that the ceiling on enormous debt is what creates "periodic uncertainty," not the debt itself. Surely, corporations should feel comparably unrestrained to borrow without limits—you know, to create confidence among investors.

The Washington Post offered similar thoughts on limiting government, explaining that a balanced-budget amendment "would deprive policymakers of the flexibility they need to address national security and economic emergencies." Yes, I believe the paper meant to imply this was a negative consequence. Listen, we don't want to inhibit the creativity of the president, which these days consists of demanding that the rich pay their "fair share"—or what Democrats refer to as "budgeting." (Note to Obama: If we all actually started paying our "fair share," we wouldn't have anything left.)

So you can see that debt ceilings, balanced-budget amendments, and spending caps are all great ideas. Consequently, they have either no chance of passing or, should they pass, no chance of mattering. Every cap is sure to be crashed through, and every constitutional restriction is sure to be circumvented. Emergencies abound, after all, because everything is an emergency, and limiting government is always "devastating" to a host of imaginary victims.

Moreover, Republicans, who, it must be noted, didn't care much about deficits before, have no need to expand this debt ceiling debate into one on a national amendment. They have all the leverage needed to extract some minor but real concession on spending and entitlement reform right now, not tomorrow. They can do it while holding the line on tax hikes. This is not the time to muddy up a perfectly preposterous discussion in order to try to get the unattainable and maybe irrelevant. Even if the goal happens to be laudable.

David Harsanyi is a columnist at The Blaze. Follow him on Twitter @davidharsanyi. This column first appeared at Reason.com.

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