There is no reason to have a debt limit at all. Most countries don't. Congress votes on budget and tax and the debt is the consequence of those. It only exists to give deficit hawks a leverage point to cut things but never raise taxes of course.
Raising taxes and avoiding recessions are the only things that can reduce the debt significantly and cutting the budget raises recession risk, so they will only make the debt larger in the long run.
How much does the deficit even matter? I know interest payments are a couple hundred billion a year but I don't really know 1) how big a deal that is, and 2) what the actual effects of those payments are.
Debt to gdp level keeps going up so it's hard to argue that there isn't something wrong, even if the current debt level is fine. But we have kept cutting taxes and having recessions. Some of the recessions have been very bad.
The debt is a savings device called treasury bond. There are other savings devices but US government debt is the largest single thing. The stock market is larger but consists of thousands of things. If you want to reduce the debt, you have to reduce people's savings. You can do that by taxing more, or people can voluntarily spend their savings. Nearly every time money changes hands, there's a tax. So the government will recover money it spends eventually. It's just a matter of getting money to change hands enough times, or increasing tax so that it does not need to change hands as many times. The government borrows money for 30 years at about 4% right now which is very low, so I think it will recover the money it spends. Wealth is very concentrated so debt reduction would probably reduce wealth inequality. Like I said, reducing the debt will require higher taxes and avoiding recessions. It's not bad for people to have savings but it shouldn't all be sitting in a few people's bank accounts.
It's theater. It has been raised consistently since the beginning.
https://en.wikipedia.org/wiki/History_of_the_United_States_debt_ceiling#Historical_debt_ceiling_levels
There is no reason to have a debt limit at all. Most countries don't. Congress votes on budget and tax and the debt is the consequence of those. It only exists to give deficit hawks a leverage point to cut things but never raise taxes of course.
Raising taxes and avoiding recessions are the only things that can reduce the debt significantly and cutting the budget raises recession risk, so they will only make the debt larger in the long run.
How much does the deficit even matter? I know interest payments are a couple hundred billion a year but I don't really know 1) how big a deal that is, and 2) what the actual effects of those payments are.
Debt to gdp level keeps going up so it's hard to argue that there isn't something wrong, even if the current debt level is fine. But we have kept cutting taxes and having recessions. Some of the recessions have been very bad.
The debt is a savings device called treasury bond. There are other savings devices but US government debt is the largest single thing. The stock market is larger but consists of thousands of things. If you want to reduce the debt, you have to reduce people's savings. You can do that by taxing more, or people can voluntarily spend their savings. Nearly every time money changes hands, there's a tax. So the government will recover money it spends eventually. It's just a matter of getting money to change hands enough times, or increasing tax so that it does not need to change hands as many times. The government borrows money for 30 years at about 4% right now which is very low, so I think it will recover the money it spends. Wealth is very concentrated so debt reduction would probably reduce wealth inequality. Like I said, reducing the debt will require higher taxes and avoiding recessions. It's not bad for people to have savings but it shouldn't all be sitting in a few people's bank accounts.