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bokov comments on US default as a risk to mitigate - Less Wrong Discussion
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Comments (120)
I wonder, next time control of the House changes, maybe they will try to do away with the debt ceiling. It's a fairly recent problem. I think getting rid of the debt ceiling without replacing it with some more effective limit on deficit spending would be dangerous, though. I suspect there would be enough Representatives left in the House who felt the same way that such a bill would not pass.
The president actually talked about the use of legal exploits in a speech he recently gave (he didn't talk about the trillion dollar coin specifically, but it would fall into the category he was addressing). He basically said that he "had plans" but they would face vigorous legal challenges, and would have almost as negative an impact as an actual default.
No, the same thing happened 17 years ago. There was even a time during the Bush government when Democrats didn't want to raise the debt limit and used it for political leverage.
This also suggests that everyone in the press follows the playbook of the president and doesn't get the idea of pushing the coin or a repeal of the debt deiling themselves.
So basically he said that he's doing all he can and that the Republicans are still really evil.
If you think that the debt limit is an important concept for limiting deficit spending, why do you think that it should always be increased?
Also, why aren't congressional budgets the tool of choice?
I never said that. I believe that screwing with it without an appreciation for the complexity of the system one is trying to improve upon can have dire consequences. And the purpose of this discussion is to see how to protect one's self from these consequences.
The debt limit is actually pretty ineffectual at limiting spending, and now we've again been reminded that it can be exploited. But unconditionally making debt-limit increases automatic would sent the wrong message to legislators and investors. I think a balanced budget amendment would be a much better alternative.
Because it's a redundant constraint. The budget already limits the debt, and that is the best mechanism for limiting it - it can actually take effect safely. The debt limit is a guillotine. If it ever does anything directly, we are screwed.
It's not a constraint -- it's a precommitment / beeminder-like device. It's purpose (at least nowadays) is to make borrowing more politically painful.
Then why shouldn't we get rid of the guillotine?
A few posts up:
As far as I can tell, no reason at all.