Dealing with Our Debt
Robert A. Levine May 23, 2023
America’s entire debt situation is insane. First of all, there should be no debt ceiling. When Congress appropriates money for any government acquisition or activity, that should be deemed as obligating the government to spend the money to pay the bill. There is no reason to have a separate vote to allocate money to pay off debt that Congress already agreed was necessary. This vote to raise the debt ceiling to pay bills that Congress has already authorized allows a minority party to hold the nation hostage. And extremists on both the right and left are only too willing to raise questions and gain publicity by opposing or delaying the increase in the debt ceiling for money that Congress has already spent.
It is time for a separate vote on the debt ceiling to be eliminated. When Congress passes a bill that entails government spending, that bill should ensure that government funds will be used to pay that debt. Almost no other nation in the world has separate votes on spending bills and raising the debt ceiling to pay these bills. The uncertainty associated with approving the debt ceiling roils all the financial markets, damages the sanctity of the dollar and hurts the American economy, even if raising the debt ceiling is passed. Thus far, the United States has never defaulted on its debts and it is hoped that this will never happen.
Having the dollar as the currency used in international trade is beneficial for the United States. There are currencies waiting in the wings, like the Chinese yuan or the European euro that would be glad to take the place of the dollar in international trade. This is much more likely to happen if the U.S. defaults on its debt. Dollar denominated debt is also considered as a safe haven for the rest of the world. When there is an economic crisis anywhere, people all over the world want to park their money in American government obligated debt. This strengthens the dollar and also America and we should be loath to do anything that would damage the standing of the dollar.
That is why it is crazy for the Republicans in Congress to make demands regarding future spending when the debt ceiling is for money that had been already spent. There should be no question about
payment of this debt and no question about raising the debt ceiling when the payment comes due. As I said, the proper way to handle this is to get rid of the debt ceiling completely, allocating funding whenever Congress and the president pass a bill. No more games involving the dollar and America’s debt.
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