A Debt Ceiling Holds Our Economy Hostage

If Congress doesn’t raise the ceiling, one of the political parties threatens to bring our economy to a halt. That is not a sensible way to run a government. That’s why only the US and Denmark have a debt ceiling set at an absolute amount rather than as a percentage of GDP like other developed countries.

Once the federal budget is not balanced and runs a deficit, the government must borrow more money, go deeper into debt to pay its bills, and not default on paying its loans. Although the U.S. has run a deficit in 77 out of the past 90 years, it has never defaulted on its debt payments because Congress raised the debt limit. However, that threshold may be crossed this year under pressure from the House Freedom Caucus, which demands a cut to the 2023 budget that Congress already approved.

Limiting debt or balancing the budget is not mentioned in the constitution. However, paying off a national debt and setting a debt limit began with the American Revolution.

The next big crisis was when the Civil War brought a tremendous 4,000 percent increase in debt. Then, finally, the First World War debts led to the first law to limit debt from federal bonds.

Those initial concerns addressed a specific debt that arose from a specific need, such as fighting a war. However, since the Great Recession, Congress has…