The Moody’s Ratings Agency is recommending the United States Government simply eliminate the idea of a debt ceiling all together. From CNN Money:
In addition, Moody’s suggested the U.S. would be better off if the debt ceiling were eliminated entirely.
The limit has not effectively restrained spending, Moody’s notes, and the legislative process “creates periodic uncertainty over the government’s ability to meet its obligations.”
Rarely do I agree with Moody’s, but on this point we are in full agreement.
There is absolutely no reason we need a debt ceiling vote. The periodic vote does nothing positive, but having it creates the possibility that a small group of elected politicians could choose to unnecessarily create economic problems. It is likely the debt ceiling vote isn’t even constitutional given the 14th Amendment. Most countries don’t have such a bizarre legislative action.
There is no reason why tomorrow congress can’t set the debt ceiling at infinite or simply state that the passage of every bill inherently includes approval of borrowing sufficient to meet the obligations of this new law.
The great irony of all this is that Republicans are constantly complaining that “uncertainty” is created by President Obama’s new laws, and thus are a big drag on the economy. If the Republicans were really worried about protecting the private sector from dangerous and unnecessary government uncertainty, they would vote to eliminate this foolish debt ceiling limit altogether.