The Debt Limit: Not a Credible Way to Control Spending

EconoMonitor
Jan. 10, 2013

The <strong><a href="http://bipartisanpolicy.org/library/staff-paper/debt-limit">Bipartisan Policy Center</a></strong> has produced a package of charts on the debt limit. Their bottom line isn’t shocking, but it’s persuasively laid out:

<ul>
 <li>The debt limit is expected to become binding (i.e., extraordinary measures will become exhausted) between February 15 and March 1. The limit needs to be raised by $1.1 trillion to get through 2013 and by $2.1 trillion by the end of 2014.</li>
 <li>There is no secret bag of tricks:  the Administration’s view is that the 14th Amendment does not give it the power to ignore the debt ceiling; other ideas, such as minting a trillion-dollar platinum coin, are seen as impractical, illegal and/or inappropriate.</li>
 <li>This leaves the Treasury little choice but to begin to run arrears after the debt limit becomes binding.  On average, the Treasury takes in only $0.60 for each dollar of spending, so arrears would be broad-based and accumulate rapidly.</li>
</ul>