Forget the Supercommittee, Just Raise the Debt Ceiling!

The possible failure of the so-called Super Committee is being trumpeted as one more piece of evidence that Congress is unable to do its job. Twelve members of Congress – 6 from the Senate, 6 from the House, 6 Democrats, 6 Republicans – have so far been unable to come up with an agreement to cut the federal deficit by a specified (large) amount of money. They still have a couple of hours, but as of now it seems that they are going to report failure – triggering huge automatic cuts in both domestic and military spending.

Certainly, Congress is dysfunctional right now. But it is important that we remember that the “problem” assigned to the Super Committee is purely and completely fictitious; or rather, it is created by Congress.

Last summer, the total federal debt reached the statutory debt ceiling set by Congress in the past. In order to keep the US out of default, Congress needed to pass a law authorizing additional borrowing (NOT additional spending; this was simply authority to borrow money to pay the bills, including interest on past debt, that had already been incurred).

Normally, this is a simple housekeeping matter. Congress simply votes to raise the debt ceiling, and things go on as normal. In this case, however, the Republicans in Congress chose to risk destroying the credit of the USA in order to score political points; and the Democrats played along, pretending that the debt ceiling couldn’t be raised unless there was also a tax increase on the rich.

Don’t get me wrong, the rich should pay more taxes – but it is simply not true, as the Democrats in Congress have been saying, that we can’t pay for federal programs unless we raise taxes.
We can; we just need the authority for the government to borrow.

The country’s most pressing need is not to cut the deficit; it is to create jobs. It is worth borrowing money to do so – more jobs means more income, means more income tax, more revenue to the government, and the ability to pay down the debt in the future. So we need a higher debt limit in order to let the government create jobs.

The Super Committee was threatening to cut social security and medicare, so it’s good they failed. It’s especially good when we consider that they were completely unnecessary in the firt place.