The debt ceiling limit has NOTHING TO DO WITH NEW SPENDING!
Now, as Mr. Harvey used to say, the rest of the story…
With the “fiscal ditch” fiasco fading, we now face a new unnecessary struggle concerning the debt ceiling. I never really heard much about the debt ceiling for most of my life, so being the history lover and teacher I am, I decided to research what it is and, more importantly, why it came about.
Up to 1917, there was no debt ceiling. That wasn't because there was no debt, oh no! The United States from its very beginning has had debt. There’s only been about one year in United States history where there was no debt, which was 1836 at the end of Andrew Jackson’s presidency. Jackson essentially tried to initiate the gold standard by issuing the Specie Act and drastically cutting spending, and the economy, predictably, went straight into a depression. As President Van Buren took the reins, the government went back into debt and has been there ever since.
But, again, the debt and the debt ceiling are two different things. Before 1917, Congress directly controlled the issuing of all Treasury bonds to finance public debt, but with World War I on, and with the complexity of modern government growing, that year Congress put an amendment into a Liberty Bond bill to give the Treasury Department the flexibility to finance the debt without the need for direct, constant, time-consuming Congressional action. Congress also enacted the debt ceiling as a way to, at least, make Treasury come and report why more bonds needed issuing.
Since then, the debt ceiling has been raised around 100 times, until recently rarely getting any attention. It happened 18 times during President Reagan’s tenure as President, for example.
And the reason it didn't cause controversy is because, again, raising the debt ceiling has NOTHING TO DO WITH MORE SPENDING!
It simply allows the Treasury Department to issue the bonds necessary to cover the costs of what Congress has, itself, already authorized.
I hope everyone will read that last sentence again. Congress has already authorized the spending…so how stupid is it for Congress to turn around and try and deny the Treasury Department the ability to pay for the spending they themselves have passed?
The debt ceiling essentially has done nothing. Except now, it’s being used as a “hostage” measure. Kind of like in Blazing Saddles when the new Sheriff (Cleavon Little) puts a gun to his own head and warns the town folk about to lynch him to back off or else.
We don’t need this again. The House’s threatening not to allow payment on what it had authorized is what lowered the U.S. credit rating last time. If the House attempts it again, the President needs to either invoke the 14th Amendment (“The validity of the public debt of the United States, authorized by law..shall not be questioned”) or simply direct the Treasury to issue platinum coinage in sufficient amount to finance the debt, something that a Republican House made legal back in 1996. And just ignore Congress.
And if it really means that much to the House, they can simply vote on getting rid of the debt ceiling altogether and, once again, directly controlling the issuing of all T-bonds.
But enough with the silliness.
Tom McMahan is a public school teacher in Catoosa County and the Chair of the Dade County Democratic Committee. He can be reached at firstname.lastname@example.org.