Ex-Reagan Administration official Bruce Bartlett makes some excellent points about Congress’s annual vote on whether to raise the debt ceiling:
- it’s superfluous (no other country, as far as he could tell, has such a ritual)
- it’s at best a distraction
- it allows policymakers to vote for budget-busting tax cuts, wars, new entitlements, etc., while pretending to be deficit hawks because they voted against raising the debt ceiling
- worst of all, if the debt-ceiling resolution ever did get voted down, as some Republicans* are eager to do, the USA would immediately have to start defaulting on Treasury bonds as they came due. Two hundred and twenty years of building the world’s best credit rating would be undone in a flash.
(Hat tip: WSJ Real Time Economics)
Of course, as Paul Krugman pointed out recently, in nearly all cases, “Deficit hawkery is just a stick with which to beat down social programs.” So if the object of the game is to whale away at social programs, losing the nation’s stellar credit rating would be worth it. At least on paper. “Deficit hawk” is too tame a phrase to describe a person who would favor such a strategy — “fiscal Armageddonist” is more like it.
*Ironically placed next to Bartlett’s blog post was an ad by Rep. Michele Bachmann (R-Mageddon) to “Tell Congress – Don’t Raise the Debt Ceiling.”
P.S. “Waiting for the End of the World” always sounds better live: