Last week, Treasury Secretary Timothy Geithner – the man who allegedly couldn’t figure out Turbo Tax when he was found to be avoiding his tax obligation – has given advice to Congress: eliminate the debt ceiling.
The practical implication of this advice is simple: get rid of a mechanism to prevent Congress from limiting how much debt the nation can have. Of course, there is always a limit, and our investors will let America know what it is, but Sec. Geithner’s advice means eliminating the national equivalent of a credit card maximum limit.
This should be no surprise to anyone. Sec. Geithner has helped President Obama rack up trillions in debt, all under the guise of economic improvement. Not only has all that debt not helped, there is strong evidence it’s actually hurt the economic recovery. Yet Sec. Geithner and Obama blissfully ignore the facts, and the spending continues.
To be fair, a debt ceiling increase has never been rejected by Congress. But it serves two public services: first, it makes the people aware of the debt level through media reports. Second, starting last year, it became a point for strong negotiation by the parties on how to reduce federal deficits and spending. Eliminating the debt ceiling would leave the public a little less aware of what is going on in Washington, and leave Washington a greater ability to spend irresponsibly without public oversight.
Eliminate the debt ceiling, Secretary Geithner? How about doing tax reform and spending cuts first, so we don’t need a debt ceiling increase, never mind elimination? Done the right way, we would never reach the debt ceiling, and thus never need to consider. Geithner’s silly suggestion.