cross-posted from the Pennsylvania Tenth Amendment Center
Until the debt ceiling was established in 1917, congress had to separately approve every new debt that the government took on. The debt ceiling was established to make it faster and easier for the treasury department to borrow money during WWI. Predictably, the war ended, but the treasury department’s expanded power didn’t. When peace time came, the congress never reclaimed it’s Constitutional role for managing the U.S. debt.
Now, 94 years and 14 trillion dollars later, we’re periodically treated to this theatrical performance where the party in power threatens catastrophe if the debt ceiling isn’t raised and the minority party claims the mantle of fiscal responsibility in order to score political points for the next election.
This year, the Republicans get their turn claiming to be the thrifty ones, but it wasn’t that way five years ago. In 2006, Senate Majority leader Harry Reid said,
How can the Republican majority in this Congress explain to their constituents that trillions of dollars in new debt is good for our economy? How can they explain that they think it’s fair to force our children, our grandchildren, our great grandchildren to finance this debt through higher taxes. That’s what it will have to be. Why is it right to increase our nation’s dependence on foreign creditors?
After the 2006 elections, in her iconic “One Hundred Hours” essay in the Huffington Post, house Democrat Speaker to-be, Nancy Pelosi wrote,
We will start by cleaning up Congress, breaking the link between lobbyists and legislation and commit to pay-as-you-go, no new deficit spending.
Then-Senator Obama said,
The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.
They sound sort-of like today’s Republicans, don’t they? These sorts of statements were, in my opinion, a big part of the Democrat election wins in 2006 and 2008. And just as sure as night follows day, you can be certain that if the Republicans manage to reclaim the presidency in 2012 the Democrats will rediscover their lost passion for fiscal responsibility. But don’t kid yourself thinking that the Democrats are the only ones who demagog the debt ceiling. If the Republicans do manage to reclaim the presidency, then we can expect the exact same Republicans who are preaching spending restraint today will be telling us all about the disastrous consequences we risk if we don’t raise the debt ceiling again in a couple years. I can’t take the time to look right now, but if you aren’t convinced of this, run some web searches and see if you can find what the Republicans were saying during the debt ceiling debates under Bush and Clinton. I bet you’ll find some serious flip-flopping there, too.
It’s time to realize that both parties are addicted to spending and both parties are going to keep right on doing it for just as long as we keep falling for the “bait and switch” every four or eight years.
If we restore the Constitutional limits on the federal government’s activities, it will have no difficulty at all maintaining its debt below $14 trillion. Even with today’s super-sized federal government, there are still other options available to avoid “financial Armageddon” without raising the debt ceiling. When normal people get into debt over their head, they cut back on spending and sell assets. There’s no reason that Washington can’t do that too.
Nick Gillespie makes the argument in this video from ReasonTV.
3 Reasons Why The Debt-Ceiling Debate is Full of Malarkey