Hey, when you’re trying to run an expanding federal government, seeking permission from the people to spend more and more money we don’t have is a bloody inconvenience. When asked if we should ditch the debt limit all-together, Treasury Secretary Timothy Geithner agrees with Alan Greenspan – spend away!
“Well, this is something only Congress can solve,” Geithner said. “Congress put it on itself. We’ve had 100 years of experience with it, and I think only once–last summer–did people decide to use it to threaten default on the American credit for the first time in history as a tool for political advantage. And that’s not a tenable strategy.”
Hunt then asked: “Is now the time to eliminate it?”
“It would have been time a long time ago to eliminate it,” Geithner said. “The sooner the better.”
What? Is the debt limit and the national debt such a “pure” economic concept it should not be discussed within the political arena?
I understand you can derive a debt limit using a dollar figure like we do now, but we could also set a debt limit based on a percentage of GDP or something could we not? But note the attitude of Geithner … he thinks the entire idea of a limit is stupid.
A question for Geithner. What is wrong with the limit? Is there some sort of economic issue with having a limit? If we got rid of the limit, would that somehow improve the economic outlook of the United States? Is that looming debt limit holding us back in some way, shape or form?
I’ll argue that having a limit – even if Congress has to discuss raising it at regular intervals – certainly does not hurt the economy and it brings forward the spending discussion to the American people on a regular basis. That’s a good thing.
But people like Geithner do not like that idea simply because the unwashed masses don’t understand economics like he does…