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Don’t Lift the Debt Ceiling

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Why is there even a debt ceiling? The reason is simple: Because even the members of Congress, who are the biggest spenders in the world, understand that too much government debt is a bad thing. That’s the message conveyed by the ceiling: It says that this is the maximum amount of debt that the government is permitted to accumulate. Once that amount of debt is accumulated, no more debt can be incurred.

If too much debt was a good thing, would there be a limit on the total amount of debt that the government could incur? Of course not. In that event, there would be no limit at all. The government would be encouraged to continue spending as much as it could and as fast as it could, even if tax revenues could not keep up with the expenditures. It would be borrowing the difference and adding to the debt already accumulated because it would be considered a good thing.

But it’s not considered a good thing. Too much debt is a bad thing. Just ask the people of Greece, where the government there incurred too much debt and sent the nation into bankruptcy. Again, that’s why there has been a debt limit or debt ceiling imposed on the U.S. government by, ironically, the biggest spenders and borrowers in the world.

If the government were attempting to rein in spending (and borrowing), one could understand why they might desire a short-term, limited increase in the debt ceiling. They might say, “We are slashing spending but need a bit more breathing room. So, we still need to incur a little more debt but we’ll soon have our spending under control.”

That’s not what’s happening, and everyone knows it. They want to raise the debt ceiling to enable them to continue spending and borrowing to their heart’s content. They view the debt ceiling as a minor obstacle to the adding of mountains of new debt to the government’s already existing debt.

Let me tell you what is going to happen if the debt ceiling is lifted. It’s the same thing that has happened every time the debt ceiling has been lifted. The statists in Washington are going to go out to the bars after work and they’re going to laugh their tails off while raising a toast to one more lifting of the debt ceiling. They’re going to be celebrating and exclaiming, “Well, we did it again. We scared the American people into permitting us to continue spending, borrowing, taxing, and loading mountains of new debt on the backs of the American taxpayers.”

Are they going to slash spending, in anticipation of the next time the debt ceiling is reached? Are you kidding? If you believe that, you’ll fall for anything. No, they are going to do the same thing they’ve done after every previous debt ceiling has been reached — spend, and borrow, and laugh, and celebrate, knowing that they can do it again the next time the debt ceiling is reached.

If the debt ceiling is lifted every time it’s reached, then as a practical matter, there is no ceiling or limit and it’s all a sham or fraud on the American people.

Enough is enough. Federal spending is out of control, and everyone knows it. The federal government has accumulated enough debt. The debt ceiling has been reached once again. If the ceiling isn’t raised, then they have to live off tax revenues. No new debt. That’s a balanced budget. That’s fiscal responsibility.

They say that that means default but that’s ridiculous. Tax revenues are more than sufficient to service the debt. Sure, it means that they would have to cut spending in other areas, but what’s wrong with that? What they want to do is continue spending at current levels or actually at higher levels and they want to do so by borrowing more money, thereby adding to the mountain of debt that the government already owes.

Is failing to lift the debt ceiling ideal from a libertarian standpoint? Of course not, because the government would still be engaged in illegitimate activities, albeit at a lower level of spending. We’d be better off, for example, without any drug war, as compared to a drug war that is being funded at 50 percent less than last year.

But from the standpoint of fiscal responsibility, refusing to lift the debt ceiling would be fantastic. No longer would the big spenders be permitted to add any more debt onto the backs of the American taxpayer. As the debt ceiling implicitly acknowledges, no more debt would be a good thing.

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.