First thought: Tim Geithner is an idiot. This is merely further proof: "Treasury Secretary Geithner: Lift Debt Limit to Infinity"
If Congress simply stopped limiting the amount the U.S. could legally borrow, in the current regime of spending without budgeting, there would be no legal limit on what Congress and the Administration could spend money on. They'd just borrow and spend with no checks or balances, or even authorizations.
The only real limit would be the market's willingness to buy U.S. debt. But that is a real and catastrophic limit. The recognition of that limit is what led Congress to try the debt ceiling gimmick to impose a modicum of self-discipline.
The fact that Congress can neither stop spending money nor refuse to raise the limit makes the whole thing a political charade. The limit doesn't really exist because everyone knows it will be raised when necessary and that spending will not abate.
So, we wait until not even the Chinese will buy our debt, then we become Greece to the 10th power.
Tim Geithner is an idiot, but he isn't the only one.
If Congress simply stopped limiting the amount the U.S. could legally borrow, in the current regime of spending without budgeting, there would be no legal limit on what Congress and the Administration could spend money on. They'd just borrow and spend with no checks or balances, or even authorizations.
The only real limit would be the market's willingness to buy U.S. debt. But that is a real and catastrophic limit. The recognition of that limit is what led Congress to try the debt ceiling gimmick to impose a modicum of self-discipline.
The fact that Congress can neither stop spending money nor refuse to raise the limit makes the whole thing a political charade. The limit doesn't really exist because everyone knows it will be raised when necessary and that spending will not abate.
So, we wait until not even the Chinese will buy our debt, then we become Greece to the 10th power.
Tim Geithner is an idiot, but he isn't the only one.
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