American progressives are fond of gazing across the pond at Europe and wishing the U.S. would emulate it. So as soon as President Obama started announcing from all reaches of the country that Congress “must” eliminate the debt ceiling, progressive cheerleaders echoed his demands, pointing out that most European countries did not have a debt ceiling.
But Europe worshippers are drawing the wrong lesson from across the Atlantic. Despite public protests against austerity cuts, many European countries are instituting constitutional reforms requiring balanced budgets in the form of “debt brakes”—a far stronger way to control the national debt than a debt ceiling.
Conservatives typically argue that the debt ceiling offers a check on Congressional spending by limiting how much the country can borrow when tax receipts run out. Progressives, however, counter that the debt ceiling irresponsibly raises the specter of a credit default, hurting lender confidence in America.
Reuters blogger Felix Salmon has even argued that the debt ceiling is a “political distraction at best” that might trigger an economic crisis at worst. It’s hard to argue with that given that Republicans ignore the debt ceiling when they have power but defend it when they do not.
The ceiling has been raised 68 times since 1960-including 18 times under Ronald Reagan, and by nearly $5 trillion under Barack Obama. Not surprisingly, government spending has gone through the roof along with the size of the public debt.
What’s the point of having a debt ceiling if every time we approach it Congress just finds a way to circumvent it?
Read More at Reason . By Anthony Randazzo.