‘Lower the Debt Ceiling’

New York Sun ^ | 01/14/2013 | Editorial

[SeekAndFind]

That is the headline on the 30th anniversary issue of Grant’s Interest Rate Observer, which this morning is, as it has been every other week for the past generation, being savored among the savvy. The latest headline sits atop one of the newsletter’s classic editorials. “Since 1917,” it quotes its analyst, Charley Grant, as reporting, “the ceiling has been raised 107 times.

Expressed as a compound annual rate of growth, the debt ceiling has risen by 8.4%, the nominal GDP by 6% Twenty-nine more years on this track and the debt ceiling would be the size of the GDP.”

Grant’s also quotes President Van Buren as saying that the “creation in time of peace of a debt likely to become permanent is an evil for which there is no equivalent.” It is Grant’s view that it would “do the quality of debate a world of good if someone would move to reduce the ceiling, not to raise it.” We’re all for it. It runs against what is being received by the Republicans in the way of political advice, which holds that confronting the debt ceiling would be a kind of suicide of the party. We’re not so sure.

We’ve been reading of late about not only Van Buren but also the titan in whose wake the Little Fox of Kinderhook acceded to the presidency. It was Andrew Jackson who fought — and won — what's known as the Bank War, meaning the campaign against the Second Bank of the United States, as our second attempt at a central bank was known. We wouldn’t want to take any thing away from Old Hickory, who was born with an incredible will, but it was his good fortune to confront a bank whose very charter of existence was set for a fixed term.

[sickoflibs]

RE :”This is a movement that needs to be nurtured, particularly if the Congress flinches again and raises the debt ceiling.”

If congress raises the debt ceiling? There is an if? Anyone here have a doubt?

O claims he will not negotiate on this, in effect saying “You get nothing for raising it again”

So what if congress raises it to last say 3 months?
He demands it raised for 2 years? He says he wont 'negotiate'. "My way or the Highway"

[Nervous Tick]

>> Twenty-nine more years on this track and the debt ceiling would be the size of the GDP.”

Huh?

GDP is about 15 trillion.
Debt limit is about 16 trillion.

The debt limit is ALREADY “the size of the GDP”! And then some.

[Vaduz]

If they lower the Debt ceiling the democrats won’t be able to spend vast sums of money,guess what will happen?.

[alloysteel]

“My way or the Highway”

Not sounding so bad at the moment. Strike out on a journey to divorcing those states that do not agree with this philosophy of “borrow and spend (wastefully)” the Federal government has embraced, from the “gimme” people that seem to prefer the chaos they have inherited.

Economics is a powerful force in the world, and just about every civilization has prospered or faltered on that issue alone. There a a number of different notions of how the process of economics should proceed, but the preponderance of evidence seems to support the belief that leaving the decisions up to countless thousands or millions making a decision every day about how to conduct business, with a minimum of interference from “expert” planners, has been the most effective for efficiently distributing rewards to the largest number, while managing to maintain growth in excess of mere increases of total population. Another philosophy, or perhaps “fillossify”, is to take that total annual increase in the value of all goods and services, and simply redistribute to all participants, regardless of their degree of contribution to the whole.

History has already made a judgment on the efficacy of each approach. Unfortunately, some people have a very difficult time embracing these lessons.