The debt ceiling is an anomaly that was created to help the U.S. government fund the expenses during World War I. "The Second Liberty Bond Act of 1917 included an aggregate limit on federal debt as well as limits on specific debt issues," says a study from the Congressional Research Service.
The current rule is unsustainable.
Few countries use debt ceiling requirements and they rarely go to Parliamentary votes.
The reason is simple: It is irresponsible to vote an expense and not pay for it. It is morally unsustainable, but it is also legally unsustainable.
By granting expense authorization to the administration through the budget process, lawmakers are also granting the equivalent indebtedness. What would anybody say of somebody who accepts to take a financial commitment (for instance the renovation of a house) without effectively accepting the consequences of that decision.
Those who use this debt ceiling as a political weapon are effectively letting the government undertake the expenses related to the budget. Funding is part of the legal and moral obligation of that decision.
On top of that, while expenses are committed, tax revenues and other income by the federal government can vary according to the taxable base of individuals and institutions. The gap can change, and so are the borrowing needs.
No employer would be allowed to treat its employees the way Congress wants the US government to treat its own. It is simply despicable.
The need to respect congressional votes.
The Republicans do not seem to understand that when Congress votes a law, it is the law of the land. It is sacred in a number of ways that they like. When they don''t like it, they ignore their obligations.
Yes, tea party blackmailers, the Affordable Health Act is the law. By using budget or debt ceiling to trap the credit of the United States of America, you are being in-civic.
You are guilty of not respecting the United States institutions, and the value of your own votes. This creates in turn a total discredit of congressional votes and the institution of Congress in the eyes of our citizens and the world.
Affordable health care is a human right.
Why not ignore the debt ceiling.
US Treasuries are backed by the full faith and credit of the United States of America.
The consequence of this is that investors, being domestic or international, must be able to trust the signature of the secretary of the Treasury on behalf of the president. They do not need to check whether Congress has or not authorized the issuance of a particular debt.
How would markets react to an issuance of US Treasuries after a disagreement on a debt ceiling? Lawyers might object. However, markets will take Treasury bills or bonds for face value. This applies to the treasuries issued before or after Congress has refused to vote the debt ceiling. Their credit is the same. Rating agencies would not discriminate since the credit of the country has not changed a bit.
Congress is acting against their own budgetary commitments, I would argue that it would, once and forever, deprive the debt ceiling authorization of any practical implication without troubling investors.
The absurdity of the situation damages the reputation of America
Congress is effectively the custodian of the legitimacy of the budget process. This is true in most democracies. Even the European Commission has now accepted to submit its budget to the approval of the European Parliament. This is simply due process.
While this might seem provocative, I would argue that the fundamental immorality of the refusal of one's acts' consequences, makes that decision nil and void. This should allow the Treasury to continue to issued the necessary financial instruments in the name of its ultimate responsibility of the credit of the country.
The US Treasury has the right to take extraordinary measures. Aren't these circumstances sufficient to use this power?
The debt limit can hinder the Treasury's ability to manage the federal government's finances, a noted above. In extreme cases, when the federal debt is very near its statutory limit, the Treasury must take unusual and extraordinary measures to meet federal obligations , the General Accounting office wrote in 2003.
"Lawyers tend to play down policy considerations as a basis for interpreting law. In this case, the consequences are so overwhelmingly on one side that they cannot be ignored by the president and should not be ignored by the courts. If the debt ceiling is not increased, the president should disregard it, and honor spending and tax legislation," writes Henri Aron, in the New York Times.
I could not agree more. It is time for courage in front of those who play the credit of the United States of American at the Russian roulette. There is a moment when giving the authority to a small group of extremists to threaten the Nation is purely and simply unconstitutional and unethical.