Economist: Congress should've killed the debt limit a long time ago. Here's what it should do now

[Yo_Mama_Been_Loggin]

Congress just punted the decision on the nation's debt limit until the end of this year, and financial markets are relieved. But it will still remain an existential threat to the financial system and economy, given that lawmakers regularly tie themselves into knots to circumvent it.

Since political optics will prevent lawmakers from ever getting rid of the debt limit, which is what they should've done decades ago, they should instead neuter it by doing away with the Senate's filibuster rule for it. Congress would still have to vote on the debt limit, but its passage wouldn't be nearly such a heavy lift.

The debt limit is an anachronistic law that's been around for more than a century. It sets a legal maximum of the nation's debt, and once the limit is reached, the government can only spend what it receives in revenues. And if the government has a budget deficit, as it consistently does, then someone isn't going to get paid, at least not on time. That someone could be a soldier, a Social Security recipient, a global investor who has previously lent money to the government or a long list of others who get checks from the U.S. Treasury. Not being able to pay its bills on time means the government would default.

The debt limit was intended to force lawmakers to be fiscally responsible. The thought was that if they reached the limit and faced a default, this would pressure them to raise taxes or restrain government spending. That's not how it has worked. Instead, often after much drama, lawmakers raise the limit just in time to avoid a default but without making difficult choices on taxes or spending.

https://www.msn.com/en-us/news/politics/economist-congress-should-ve-killed-the-debt-limit-a-long-time-ago-here-s-what-it-should-do-now/ar-AAPrfi4

[zipplewrath]

1. It should be established by spending

If you want a debt limit, don't spend the money. If the issue is revenues versus spending, make spending contingent upon revenues. But NEVER default on ones debts. And that's advice for a person, company, and any other organizations, including governments. Most states have virtually this requirement. i.e. you can't spend money you don't have.

[IbogaProject]

2. Nope, if you budget it the debt needed should be automatic

Nope, if you budget it the debt needed should be automatic. TFG & the Regressive party have given trillions away in tax cuts the debt should be considered implied.

Taxes on the top 5 or 10% of income should increase and they should drop substantially for the bottom 70 or 80% in between should stay similar.

The big thing needed is the Federal Reserve needs to be Federalized, it's a private entity, quasi-public but owned by the most wealthy. The global system of creating fictional reserve (pun intended) money at interest, without creating the interest causes all kinds of social and environmental destruction. At least we the people should get that cut rather than paying it to the wealthy who inherited too much already.