A conservative’s case for getting rid of the debt ceiling

By Mike Rosen

In late December, Congress passed stopgap legislation to avert a government shutdown. Of course this is hyperbole, the government doesn’t really shut down. The vast majority of government spending continues to flow, including Social Security, Medicare, Medicaid, interest on the national debt, additional spending for disasters and farmers, along with the armed forces, FBI, CIA, and Secret Service still on the job. True, “non-essential government employees” are sent home for a deferred-pay vacation and the Washington Monument is closed to tourists.

A prior pork-loaded stopgap measure was opposed by Republicans, forcing a compromise with spendthrift Democrats that dropped the number of pages from 1,547 to 118. But Democrats refused to budge on a measure supported by Republicans and Trump to suspend the debt ceiling for two years. So, we’ll go through this same charade again when the stopgap agreement expires in March.

Ending the farce

If it feels like we’ve seen this show before, you’re right. It dates back to 1917 when Congress passed a law raising the national debt ceiling in order to issue Liberty Bonds to fund World War I. It made sense then. Since then, Congress has raised the ceiling 78 more times, most recently in 2023, for a total winning streak of 79-0.

Following the showmanship of grandstanders from both parties’ extremes, demanding provisions that can’t possibly be passed, a compromise will be made and the debt ceiling will be raised, and the winning streak will surely be extended to 80-0.

It’s time to end this farce and eliminate the statutory debt ceiling altogether. Not because I support limitless spending and a spiraling national debt, but because it doesn’t work. It’s become nothing more than a ceremonial formality, preceded by political theater. The time to reign in runaway spending is at the beginning of the annual budget and appropriations process, not after the money has already been spent or committed. That’s like gorging yourself at a high-priced steak house and refusing to pay the check.

The debt ceiling must always be raised because our government is on a perpetual trajectory of deficit spending, with less money coming into the Treasury than going out. Failure to raise the debt ceiling would cause the U.S. to default on the payment of principal and interest on Treasury bonds as they come due. This would undermine the “full faith and credit” of the United States and bring on an international financial crisis that could lead to a worldwide depression. That’s not a realistic option.

It’s the spending

The root of this problem is that federal spending is totally out of control. We’ve had budget deficits in 47 of the last 51 years and they’re now baked in forever. Hiking tax rates would not produce the hoped for revenues and would more likely tank the economy. Besides which, federal spending has exceeded the economy’s tax capacity for decades. Progressive socialists who would “soak the rich” along with corporations and investors would destroy our free market economy, the stated goal of those who proclaim they hate capitalism. In the process, it would drive down our standard of living. But Democrats have no limiting principle when it comes to spending. The rise in government redistribution of income and our cornucopia of social welfare programs have caused the number of net tax receivers to now exceed the number of net taxpayers, and the tidal wave of illegal immigrants has made that imbalance even worse.

Our nation’s 36 trillion-dollar national debt is the cumulative total of historical federal spending in excess of revenues. In 1980, our gross national debt was 31% of GDP. Today, it’s 120% of GDP. That’s higher than it was in World War II when defense spending was 90% of the budget. Today, only 12% goes for defense, while what the government calls “payments for individuals” (Social Security, Medicare, Medicaid, and countless other “entitlement” programs) consumes 70% of the budget. It’s politically impossible to “slash” those programs but somehow, they must be at least restrained and the budget brought into balance. If not, we are on a trajectory to fiscal insolvency.

When Greece went into bankruptcy a decade ago the EU and IMF bailed her out. but no one has the means to bail out the United States.