Trump calls for abolishing the debt ceiling

[Wiz Imp]

28. He's actually right on this issue (but not for the right reason).

https://en.wikipedia.org/wiki/United_States_debt_ceiling

There is a debate among legal scholars regarding the constitutionality of the debt ceiling. Some scholars argue that the debt ceiling does not provide the legal authority for the United States to default on its debt. Some also argue that the debt ceiling itself is unconstitutional since it does not provide a clear mechanism for the government to meet its constitutional obligation to repay its debts once it meets the borrowing limit.

The apparent redundancy of the debt ceiling has led to suggestions that it should be abolished altogether. Several Democratic House members, including Peter Welch, proposed abolishing the debt ceiling. The proposal found support from some economists such as Jacob Funk Kirkegaard, a senior fellow at the Peterson Institute for International Economics.

In January 2013, a survey of 38 highly regarded economists found that 84 percent agreed that, since Congress already approves spending and taxation, "a separate debt ceiling that has to be increased periodically creates unneeded uncertainty and can potentially lead to worse fiscal outcomes." Only one member of the panel, Luigi Zingales, disagreed with the statement. Rating agency Moody's has stated that "the debt limit creates a high level of uncertainty" and that the government should change "its framework for managing government debt to lessen or eliminate that uncertainty".

Proponents of Modern Monetary Theory (MMT), a heterodox, post-Keynesian economic theory which arose in the late 20th century, have critiqued the concept of the debt ceiling and its theoretical and practical uses. A core tenet of MMT is that currency arose from and is wholly controlled as fiat money by governments, the latter claim is dependent on the government as the sovereign issuer of the given currency. As of 2019, MMT theorists believed that governments have the power to create and spend money within a limit of reason without creating hyperinflation, as well as the ability to forgive its debt or repay itself; in contrast, as of 2020, orthodox economic theorists tended to focus on national deficit as a debt that needs to be repaid eventually. As a result, MMT theorists argue the debt ceiling is largely a symbolic limit on government spending; in 2020 Stephanie Kelton, a prominent supporter of MMT, wrote that "there are no constraints on the federal budget."

After the turn of the 20th century, and particularly during and since the Great Recession (2007-2009) political landscape, MMT has been the subject of political debate between post-Keynesian, mainstream, and free-market economic theorists and politicians alike. As of 2019, MMT debates on the debt ceiling have pervaded Congress, with progressive representatives, prominently Alexandria Ocasio-Cortez, boosting the theory to the mainstream, while conservative representatives have been critiquing MMT's potential impacts on government spending and inflation.

Early in 2023, Treasury Secretary Janet Yellen was supportive of legislation to abolish the debt limit, while President Biden was not; however, by June he had signed into law the Fiscal Responsibility Act of 2023 suspending the debt ceiling.

Of course Trump wants it raised or eliminated now so he can say debt was allowed to explode by Democrats. But that is what he wants to do - explode the debt further through tax cuts for billionaires. Despite Trump's nefarious intentions, the debt ceiling should never have existed and is possibly even unconstitutional so getting rid of it would be a good thing. It will no longer hamper future Democratic administrations like it did Obama & Biden.