Tuesday, January 31, 2023
Interesting Results From The New NBC News Poll
The charts above are from the new NBC News / Hart Research Poll -- done between January 20th and 24th of a nationwide sample of 1,000 adults, with a 3.1 point margin of error.
Why Must "Never Again" Always Turn Into "Once Again"?
The following is from the editorial board of The Washington Post:
No decent citizen could fail to be appalled by the video, released Friday, showing Memphis police officers beating a 29-year-old Black man, Tyre Nichols, so badly on Jan. 7 that he died three days later. No feeling citizen could fail to be moved by the anguish of his mother, RowVaughn Wells, as she eloquently described her grief at losing a young man, himself the father of a 4-year-old, who cried out for “mom” as he absorbed the assault. And no concerned citizen can fail to be impressed by, and appreciative of, the way in which those who justifiably protested Mr. Nichols’s death heeded — with sporadic exceptions — Ms. Wells’s call for nonviolence.
Yet no thinking citizen can fail to be frustrated that something like this could have happened less than three years after George Floyd died at the hands of Minneapolis police officers, triggering a national movement for police reform and social justice — or, for that matter, nearly 32 years after Los Angeles police officers delivered an eerily similar, though nonfatal, beating to Rodney King. How many more times will Americans, and their leaders in government and law enforcement, vow “never again” about such an incident, only to find ourselves ruefully saying, “Once again.”
Horrible as it was, there are encouraging aspects to this episode. The Memphis Police Department did not maintain the proverbial “blue wall” of silence, despite what appear to be initial efforts at a coverup by the five officers involved. Rather, chief Cerelyn Davis took her own skeptical look at the initial reports and fired the men 13 days later. She forthrightly denounced their conduct as “acts that defy humanity.” The Shelby County district attorney filed second-degree murder charges. And authorities added transparency by releasing video of the incident from police body cameras and other sources. Attorneys for Mr. Nichols’s family have declared that the city and county’s official response “gives us hope as we continue to push for justice for Tyre.”
Legal accountability for alleged police perpetrators is indeed necessary, to punish, to deter and to reinforce the principle that those who wear the badge are not above the law. The sobering reality, though, is that such retrospective justice is no panacea. If it were, guilty verdicts in Floyd’s case would have prevented what happened in Memphis. So would the convictions, in 1993, on federal civil rights charges, of two officers who beat Rodney King — albeit after a jury acquitted them the previous year, sparking six days of violent protest in L.A.
Further reforms are needed to reduce police impunity, including federal legislation to modify the “qualified immunity” doctrine, largely created by the Supreme Court, that often blocks lawsuits for unconstitutional abuses. Still, even many oft-proposed reforms — including some included in the George Floyd Justice in Policing Act — would not have prevented what happened to Mr. Nichols. The measure bans potentially deadly chokeholds, for example, but that appears to be one of the few forms of physical force the officers in Memphis did not visit upon Mr. Nichols’s body.
Indeed, Memphis, similar to other cities, had instituted reforms. Onewas the use of police body cameras to record encounters with citizens, which seemingly did not give the officers who beat Mr. Nichols much pause. Another was the recruitment of a force that reflects the city’s large Black majority. All five officers who assaulted Mr. Nichols were Black — as is the chief, Ms. Davis. Memphis hired her in 2021 after a career in Durham, N.C., during which she had embraced the protests over Floyd’s murder and decried “systemic racism” in U.S. policing.
The change Memphis and many other departments need is the kind that cannot come from laws and policies alone: cultural. Police officers — regardless of their race — too often regard young Black men as inherently suspect or dangerous. The savagery with which the police beat Mr. Nichols was unfathomable. But so was the f-bomb-laced disrespect with which they immediately approached him, based on what appears to have been at most a traffic violation, and then suddenly snatched him out of his car.
It bears repeating, even at a moment such as this: Most police officers do a difficult and necessary job with decency and professionalism; the country needs more like them. This is especially true in Memphis, where the level of violent crime is unacceptable: the city of 630,000 saw 302 homicides in 2022, or about 48 per 100,000 — about seven times the 2021 national homicide rate. The vast majority of victims in Memphis were Black.
As it happens, the city’s high 2022 rate reflected a 13 percent improvement over 2021, which the police department had attributed in part to work by the special unit to which the five officers who beat Mr. Nichols belonged — and which Memphis has now disbanded. But as the Editorial Board argued in the wake of Floyd’s death, an overreliance on police has prevented communities from imagining and investing in other public safety tools, starting with revitalizing neighborhoods that experience the most crime.
In the wake of Tyre Nichols’ death, the Memphis police have nothing to celebrate and much to improve. The same goes for the United States as a whole.
Monday, January 30, 2023
Public Opposes GOP On Abortion & Social Security
The Republicans in the House of Representatives say they want to make abortion illegal across the nation, and want to cut funding for Social Security and Medicare. But the public overwhelmingly opposes both of those ideas.
The charts above reflect the results of the Economist / YouGov Poll -- done between January 21st and 24th of a nationwide sample of 1,500 adults (including 1,330 registered voters). The margin of error is 3.2 points for adults and 3 points for registered voters.
Better Rules/Training Is Not Enough - Reform Police Culture
During a war, countries use a propaganda that defines their enemy as them -- as people that are different than themselves. This makes it easier to kill those people (and sadly, many times leads to war crimes being done and defended).
We can debate whether that propaganda is good or not, but it also exists in our own society. Too often these days, people are quick to label their political opponents as enemies. This has led some to actually perpetrating violence against those seen as others.
We have seen a continuing violence by police. And with the advent of videos (especially on cell phones, which nearly everyone has), much of this violence is being documented. And rightly, this has resulted in calls for reforming the regulations and training in police departments.
There is no doubt that better regulations and training are needed. But they are not enough. Police culture must also be reformed, or the better training and regulations will mean nothing.
For far too long, many police have had an "us vs. them" view of their job. They consider themselves to be in a war against criminality, with the "us" (police) fighting against the "them" (criminals). This is the same kind of thinking that is used in a war, and it allows police to justify bending, or even breaking, the rules and regulations to win that "war".
Unfortunately, it also leads to innocent citizens being branded as the "them", and persecuted or even killed. The most recent example is the beatting death of Tyre Nichols by police. Some will try to say this is an isolated incident. It is not.
There is far too much police violence in many departments across the country, especially toward minority citizens. And its due as much or more to the "us vs. them" police culture as it is to a lack of proper training and regulations.
Don't get me wrong. I believe there is a need for better training and regulations -- and it should be on a nationwide basis (with laws passed on a federal level). But the best training and regulations will not work until the "us vs. them" culture among police is changed.
The truth is that there is no "them" -- only "us". Even the most heinous criminal is a human, and deserves the constitutional rights afforded to everyone. Sometimes a physical alteration cannot be avoided, but it must always be initiated by the person being stopped by police -- not from the police themselves.
Police are to protect and serve the people, but they cannot do that if they consider a portion of the population as enemies.
Sunday, January 29, 2023
It Was All So Unnecessary - And More Need To Be Punished
Nichols was stopped for a traffic violation (supposedly reckless driving). It should have just resulted in a traffic ticket.
But the officers that stopped him approached him in a very aggressive manner, demanding he get out of the car. When he asked politely why he was stopped. They physically removed him from the car and roughly shoved him to the ground. There was no reason for that, and I'm not surprised that Nichols was scared and ran away.
When he was apprehended, the officers decided to get revenge for his escape. They beat him with their fists, with a metal nightstick, and kicked him in the head. None of that was necessary either. There were enough officers to safely put the 140 pound man on the ground and handcuff him. There was no reason for anyone to be injured -- not the victim or the officers.
The five officers who beat Nichols have been charge with the crimes they committed, and that's a good thing. They were nothing more than criminals wearing badges.
But they were not the only officers who failed to do their duty that night.
A police officers job is not over once a person is apprehended. The job is not over until the person is safely in jail -- or in the hospital, if medical attention is necessary.
After Nichols was subdued and handcuffed, he was leaned against a car. He fell over several times. It should have been obvious to all of the dozen or so officers standing around that he was in medical distress. But they ignored it. Nichols laid on the ground for over 20 minutes before receiving any medical help.
That may or may not have contributed to Nichols' death. But one thing is sure -- every officer at the scene failed to do their duty! They all need to be punished.
Words Are Not Enough - We Need Police Reform NOW
The following op-ed is by Charles M. Blow in The New York Times:
The spectacle of a televised countdown to the showing of the video in which Tyre Nichols was savagely beaten by Memphis police officers doesn’t just theatricalize Black death; it is a damning indictment of American perversion.
It was horrific, as promised, but unfortunately not singularly so. It was instead yet another data point in a long line of videos showing the torturing of Black bodies by police. It was more snuff porn with Black victims in a country becoming desensitized to the violence because of its sheer volume.
America — and the world — had the realization that police violence was a problem, and then it simply walked away before the work was done and the war was won.
After the killing of George Floyd in 2020 and the historic summer of protest that followed, police killings of American citizens didn’t decrease; they increased. What fell away were the evanescent allies, poll-chasing politicians and cooped-up Covid kids who had used the protests as an opportunity to congregate.
Even Black people’s support for the Black Lives Matter movement eventually began to fall.
And as Americans shifted to other priorities like politics and the economy, the broader public became desensitized to police killings, or it callously started to see the police killings as unfortunate but ultimately acceptable byproducts of much-needed increased policing at a time of rising crime.
To break through, a killing would have to be truly gruesome and barbaric, the circumstances around it truly ghoulish and the victim of it truly unassailable.
That case has now arrived with the death of Nichols, a Black man, after his horrific beating at the hands of five Black Memphis police officers.
Authorities moved relatively quickly to fire, arrest and aggressively charge the officers.
But instead of leaping to my feet to applaud a system working as it should, rather than as it was designed, I am stuck on the fact that there should have been federal legislation to prevent such killings.
But there wasn’t, and there isn’t, because America has once again failed Black people who were pleading for help and demanding it.
America should be ashamed. It abandoned the issue of police reform.
After Covid lockdowns eased and people were once again gathered for things other than protest, their priorities snapped back to a noninterventionist normality. Their cabin-fever racial consciousness was like some kind of delirium, an outgrowth of end-of-the-world ideations.
As the world reopened, elections approached and crime and inflation rose in tandem, interest in police reform and protecting Black lives from police violence melted away like ice cubes on a summer sidewalk.
And with it, America was taught some horrendous lessons that do more harm to the quest for equality than the protests did to promote it.
Black people were taught that for some, interest in their safety had simply been a dernier cri, that allyship could be transitory and transactional, that some people entered the fight through a turnstile and that when their interest and energy waned, they exited the same way.
Too many liberal politicians showed us that their commitment to legislation, and even language, to protect Black lives from police violence was polling dependent, not rooted in moral rectitude or core values but governed by their ideas’ public appeal. When the winds shifted, these politicians spun like a weather vane.
They ran scared of being labeled woke or supporting a “defund the police” ideology. Rather than rebrand a laudable effort to be smarter about how municipal funds are allocated with a more acceptable slogan, they did the lazy, politically expedient thing: They raced to neutralize the idea by proclaiming their direct opposition to it, not defunding the police but increasing funding to police.
Police unions also learned a lesson: that they could survive the most intense and coordinated denunciation of their practices they had ever faced and still dodge federal legislation to address the violence that happens on their watch.
Yes, states like California and New York moved quickly, while the issue was still in vogue, to rewrite some criminal codes, and a smattering of cities increased protection by doing things like strengthening “duty to intervene” policies, but national reform remained elusive.
If there are rare occasions to employ a cliché, this is one: They dodged the bullet.
If there is a silver lining in all of this, it is at present an anecdotal one. It is the seeming impact that Black women have had to disrupt the system when given power not necessarily to prevent violent excesses but at least to punish them.
The police chief who moved quickly to fire the officers in the Nichols case is a Black woman.
When Rayshard Brooks was killed in Atlanta at a drive-through, the mayor, Keisha Lance Bottoms, a Black woman, accepted the resignation of her police chief and decided that the officers should be fired immediately. (Unfortunately, the officers were not eventually charged in the case, sued the city and were reinstated.)
When a white Dallas police officer, Amber Guyger, walked into the apartment of Botham Shem Jean and shot him to death, Police Chief U. Reneé Hall, a Black woman, moved quickly to secure a warrant for the officer’s arrest. Guyger was convicted of murder in the case.
I don’t want to imply that a handful of cases are universally revelatory but to circle them as curiosities worthy of keeping an eye on.
Rather than pointing to a system that is evolving and becoming more humane, these examples only underscore the racialized nature of the system and how slow it has been to act in places where neither the people in power nor the accused officers were Black.
Tyre Nichols’s death isn’t only an individual tragedy; he is now a marquee victim of a predacious system that America has lost its willingness to confront. The untreated wound, still festering, bled through the gauze.
Saturday, January 28, 2023
Rural Shift To GOP Is Based On Lies And Misconceptions
Many voters in Rural America think they are being short-changed and disrespected. Neither is true. Here is the truth from Paul Krugman in The New York Times:
Rural resentment has become a central fact of American politics — in particular, a pillar of support for the rise of right-wing extremism. As the Republican Party has moved ever further into MAGAland, it has lost votes among educated suburban voters; but this has been offset by a drastic rightward shift in rural areas, which in some places has gone so far that the Democrats who remain face intimidation and are afraid to reveal their party affiliation.
But is this shift permanent? Can anything be done to assuage rural rage?
The answer will depend on two things: whether it’s possible to improve rural lives and restore rural communities, and whether the voters in these communities will give politicians credit for any improvements that do take place.
This week my colleague Thomas B. Edsall surveyed research on the rural Republican shift. I was struck by his summary of work by Katherine J. Cramer, who attributes rural resentment to perceptions that rural areas are ignored by policymakers, don’t get their fair share of resources and are disrespected by “city folks.”
As it happens, all three perceptions are largely wrong. I’m sure that my saying this will generate a tidal wave of hate mail, and lecturing rural Americans about policy reality isn’t going to move their votes. Nonetheless, it’s important to get our facts straight.
The truth is that ever since the New Deal rural America has received special treatment from policymakers. It’s not just farm subsidies, which ballooned under Donald Trump to the point where they accounted for around 40 percent of total farm income. Rural America also benefits from special programs that support housing, utilities and business in general.
In terms of resources, major federal programs disproportionately benefit rural areas, in part because such areas have a disproportionate number of seniors receiving Social Security and Medicare. But even means-tested programs — programs that Republicans often disparage as “welfare” — tilt rural. Notably, at this point rural Americans are more likely than urban Americans to be on Medicaid and receive food stamps.
And because rural America is poorer than urban America, it pays much less per person in federal taxes, so in practice major metropolitan areas hugely subsidize the countryside. These subsidies don’t just support incomes, they support economies: Government and the so-called health care and social assistance sector each employ more people in rural America than agriculture, and what do you think pays for those jobs?
What about rural perceptions of being disrespected? Well, many people have negative views about people with different lifestyles; that’s human nature. There is, however, an unwritten rule in American politics that it’s OK for politicians to seek rural votes by insulting big cities and their residents, but it would be unforgivable for urban politicians to return the favor. “I have to go to New York City soon,” tweeted J.D. Vance during his senatorial campaign. “I have heard it’s disgusting and violent there.” Can you imagine, say, Chuck Schumer saying something similar about rural Ohio, even as a joke?
So the ostensible justifications for rural resentment don’t withstand scrutiny — but that doesn’t mean things are fine. A changing economy has increasingly favored metropolitan areas with large college-educated work forces over small towns. The rural working-age population has been declining, leaving seniors behind. Rural men in their prime working years are much more likely than their metropolitan counterparts to not be working. Rural woes are real.
Ironically, however, the policy agenda of the party most rural voters support would make things even worse, slashing the safety-net programs these voters depend on. And Democrats shouldn’t be afraid to point this out.
But can they also have a positive agenda for rural renewal? As The Washington Post’s Greg Sargent recently pointed out, the infrastructure spending bills enacted under President Biden, while primarily intended to address climate change, will also create large numbers of blue-collar jobs in rural areas and small cities. They are, in practice, a form of the “place-based industrial policy” some economists have urged to fight America’s growing geographic disparities.
Will they work? The economic forces that have been hollowing out rural America are deep and not easily countered. But it’s certainly worth trying.
But even if these policies improve rural fortunes, will Democrats get any credit? It’s easy to be cynical. Sarah Huckabee Sanders, the new governor of Arkansas, has pledged to get the “bureaucratic tyrants” of Washington “out of your wallets”; in 2019 the federal government spent almost twice as much in Arkansas as it collected in taxes, de facto providing the average Arkansas resident with $5,500 in aid. So even if Democratic policies greatly improve rural lives, will rural voters notice?
Still, anything that helps reverse rural America’s decline would be a good thing in itself. And maybe, just maybe, reducing the heartland’s economic desperation will also help reverse its political radicalization.
Friday, January 27, 2023
About 186,000 Workers Filed For Unemployment Last Week
The Labor Department released its weekly unemployment statistics on Thursday. It showed that about 186,000 workers filed for unemployment benefits in the week ending on January 21st. Here is the official Labor Department statement:
In the week ending January 21, the advance figure for seasonally adjusted initial claims was 186,000, a decrease of 6,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 190,000 to 192,000. The 4-week moving average was 197,500, a decrease of 9,250 from the previous week's revised average. The previous week's average was revised up by 750 from 206,000 to 206,750.
An Honest Discussion Of The Debt Ceiling From EPI
The following article on the debt ceiling is by Josh Bivens at the Economic Policy Institute:
U.S. Treasury Secretary Janet Yellen announced last week that the federal government had reached the statutory debt limit and that her department had begun “extraordinary measures” to meet required spending obligations. It is estimated that by July these extraordinary measures will no longer be able to keep some spending obligations from being missed.
The fact that the statutory debt limit can inject such chaos into the American political system and economy is truly odd. The debt limit measures nothing coherent and has no relationship to any serious measure of the economic burden imposed by the nation’s debt. It has as much relevance to the nation’s objective economic health as today’s horoscope. Yet if it’s allowed to bind, disaster would result. And if the price of convincing House Republicans to raise the debt limit is large cuts to federal spending, this still ensures grave damage to the economy and vulnerable families.
The debt limit—and particularly its relationship to the objective economic facts of the nation’s fiscal health—is poorly understood by too many. In this post, we make the following points about the debt limit in the current moment:
- A recession is guaranteed if the debt limit is not raised. This wound to the U.S. economy would be inflicted entirely by the irresponsibility of the Republican caucus in the House of Representatives.
- “Reprioritization” of spending in the face of a binding debt limit—or paying some obligations of the federal government in full while inflicting much steeper cuts on other obligations—does not change the fact that a recession would result. In fact, if “reprioritization” privileges holders of U.S. debt over other spending obligations, it could make the recession worse.
- The debt limit measures no coherent economic value. Given the stakes involved, many assume that the debt limit must be some meaningful parameter that plays an important role in maintaining the fiscal health and sustainability of the federal government. This is false. The debt limit is essentially an exercise in numerology.
- The value of what it measures—the nominal dollar level of outstanding gross public debt—has zero relationship to the economic fundamentals of the nation’s fiscal health. The debt limit is not inflation-adjusted, measures debt the government owes itself, does not include federal government assets, and is completely uncorrelated with genuine measures of fiscal health (like the debt service ratio—or interest payments on government debt divided by national income).
- A deal with spending cuts does not avoid the debt limit’s damage.Given the damage that would be done by allowing the debt limit to bind, some might think that any deal to raise it would be worth doing. But this is not right either. Deals that include steep spending cuts would also carry a high risk of causing a recession. The entire danger posed by the debt limit is that damaging spending cuts might be caused by an absurd political institution. Embracing spending cuts (even not as steep) simply to avoid the absurd political institution cannot be a serious answer.
- A debt ceiling deal that included steep budget cuts was almost the entire reason why the economic recovery from the 2008–09 recession was the slowest in post-war history.
- The debt limit should be abolished—either formally or effectively. If Congress will not raise the debt limit without a damaging deal on spending, the Biden administration should pursue work-arounds—including potentially minting a trillion-dollar coin—to keep the debt limit from binding.
Overview
The U.S. Treasury draws on banking accounts at the Federal Reserve to fund federal governmental activities—remitting paychecks to federal government employees, sending Social Security checks, paying U.S. bondholders, reimbursing medical providers for services covered by Medicare and Medicaid, and so on. These accounts are fed on an ongoing basis by both tax revenues and the proceeds from selling bonds (debt). But since the United States has a statutorily imposed limit of how much outstanding debt is allowed, once this limit is reached on issuing new debt, Treasury can no longer sell bonds and deposit these proceeds. As a result, accounts at the Federal Reserve will dwindle as they are now only fed by incoming taxes, which are insufficient to cover all spending. If Congress does not raise the debt limit, the Biden administration does not enact any work-around, and federal spending is indeed forced to contract to a level that can be financed only by taxes, then the debt limit will “bind” spending.
Consequences of allowing the debt limit to bind spending
The U.S. is currently borrowing an amount roughly equal to 4% of gross domestic product (GDP) to finance spending. If no new borrowing was allowed due to the debt limit, this means that spending would have to fall by 4% of GDP. A spending cut of 4% of GDP is a mammoth shock, and to have it slam into the economy suddenly would be spectacularly damaging.
For comparison, the abrupt swing from borrowing to saving—known as private-sector “deleveraging”—that led to the Great Recession in 2008–2009 was about a 9% share of GDP, but that was spread over more than two years. This means that the mechanical shutdown of spending caused by hitting the debt ceiling would be about the same annualized size—but would occur even more suddenly—as the one that led to the Great Recession.
Even worse, as the negative fiscal shock rippled through the private economy, the austerity would become self-reinforcing. Say that in the first month, the 4% of GDP cutback in federal spending has a multiplier of 1, so economic activity in that month is slowed by 4% of that month’s GDP in total. (While it’s true that multiplier effects may well not happen right away, illustratively this is the dynamic we’re facing.) With GDP and incomes 4% lower, tax collections will fall by roughly 1% of GDP. So the next month, not only will the original cutback in spending occur, but lower tax collections will ratchet down spending even more—and pretty quickly!
Normally, the federal budget acts as an automatic stabilizer when recessions hit—taxes fall and spending rises and debt increases, all of which spurs economic activity. But a recession caused by an arbitrary legal rule that spending cannot exceed (falling) taxes means that the budget would actually act as an automatic destabilizer.
If the spending cutbacks occur for a month, say, and then federal transfers make up for the lost month, then much of the damage could be undone pretty quickly. But not all of it. Take the example of retirees who do not go out to eat in their local diners for a month because their Social Security checks do not arrive. If the Social Security checks start coming later and retirees return to diners—and even if the previous missed payments are made up—this does not restore the lost income to wait staff who missed a month of customers.
Finally, these are just the “mechanical” effects of hitting the debt ceiling. The ripple effects stemming from distress in financial markets that would be sparked by missing interest payments on Treasury bonds could be extreme as well. But these mechanical effects are useful to keep in mind when some misleadingly claim that Treasury can “reprioritize” payments to bondholders and hence the United States can avoid technical “default.” Prioritizing interest payments to bondholders just means defaulting even more heavily on Social Security beneficiaries, doctors’ reimbursements for seeing Medicare and Medicaid patients, federal contractors’ bills, safety net spending, and all other federal payments.
“Reprioritizing” some payments over others does not change the grim mechanical arithmetic run through above—and might make it worse. Bondholders are a relatively rich group, and much of the U.S. federal debt is held by other countries. Both of these things mean that cuts to bondholders would result in less of a spending pullback than equivalent cuts to vulnerable families. In short, “reprioritization” is default by another name, and one that makes the economic damage of allowing the debt limit to bind even greater.
The debt limit is numerology
The statutory debt ceiling is a completely arbitrary value—there is no compelling economic justification for its historical values and it is raised (or suspended periodically) purely based on congressional whim and partisan political strategizing. The absurdities in using the nominal value of gross federal debt as a high-stakes economic indicator are abundant.
For example, the debt limit is not indexed for inflation, even as many federal government payments and taxes are indexed (either implicitly or explicitly). Further, the debt limit measures gross debt, which includes debt the federal government owes itself. The biggest difference between the debt held by public and gross debt is the Social Security Trust Fund (SSTF). To help pre-fund the now-arrived retirement of the Baby Boomer generation, for years the Social Security system taxed current workers more than what was needed to pay current beneficiaries. The surplus was credited to the SSTF. As dedicated Social Security revenues fall a bit short of benefits in coming decades, the system (as designed) will draw down the SSTF. But this means that as the SSTF rose—as the Social Security system ran a surplus—measures of gross debt were actually inflated. How can that make sense?
The gross debt also excludes the roughly $2 trillion in financial assets (mostly student loans) held by the federal government. Any measure that aims to measure the balance sheet health of an entity probably shouldn’t ignore trillions of dollars in assets.
Sometimes the debt limit is defended as a useful measure to make Congress pause and be mindful about the nation’s fiscal situation. But this argument is absurd. For one, a measure meant to enforce mindfulness should not be so high stakes and subject to political opportunism. If the debt limit just forced a day of congressional debate whenever it was breached rather than forcing a sudden contraction of federal spending, this argument might make more sense. Most importantly, a prompt forcing Congress to pause and think about the nation’s fiscal health should have some empirical relationship to the nation’s fiscal health. The debt limit does not.
Given the measurement absurdities noted above, it is no surprise that the debt ceiling does not correlate at all with meaningful measures of the burden imposed by the nation’s debt. Probably the most meaningful measure of this burden is interest payments on the debt expressed as a share of GDP. This debt service ratio and the nominal value of the nation’s outstanding public debt (what triggers the debt limit) are almost entirely uncorrelated.
For example, in 1996, gross federal debt stood at $5.2 trillion. By 2019, it was at $22.7 trillion. Yet in 1996, debt service payments—the interest costs needed to be paid on outstanding debt—were 3.0% of GDP, but by 2019 they were just 1.8%. Since 2019, this debt service ratio has declined even further as nominal debt rose by another $8 trillion. The reason why interest rates have collapsed while debt has grown is simply that both variables have been driven by pronounced economic weakness over most of the post-2000 period. But the larger point is that the level of gross federal debt has no reliable relationship to any economic stressor faced by governments or households, so hinging something as high stakes as a hard limit on the federal government’s legal ability to borrow on this measure makes no sense.
A deal with spending cuts does not avoid the debt limit’s damage
People often invoke the damage done by the 2011 showdown over the debt ceiling. But they often miss what was by far the greatest damage done by the 2011 debt ceiling episode: the passage of the Budget Control Act (BCA), a piece of legislation that is relatively unknown to the lay public, but that delivered an anti-stimulus to the U.S. economy about two times as powerful as the stimulus provided by the Obama administration’s Recovery Act in 2009.
The BCA’s caps on federal spending explain a large part of why this spending in the aftermath of the Great Recession was the slowest in history following any recession (or at least since the Great Depression). If this spending had instead followed the normal post-recession path, then a return to pre-recession unemployment rates would’ve happened 5-6 years before it finally did in 2017.
The BCA was the GOP demand for raising the debt limit in 2011, and the Obama administration acquiesced to it. The leverage provided by the debt limit led directly to the worst recovery following a recession since World War II. This leverage the debt ceiling provides to those looking to enforce austerity is its greatest—and often most-overlooked—danger.
The debt limit needs to be abolished—either formally or effectively
Given all of this, it is obvious that the U.S. should join the vast majority of rich countries around the world who do not have a statutory debt limit. It would be most straightforward if Congress abolished it, but that is extremely unlikely in the near term.
For now, if Congress will not act sensibly and raise the debt limit without a damaging deal on spending, the Biden administration should act in any way it can to keep the debt limit from binding. The most fun proposed executive work-around—one that highlights the sheer stupidity of the debt limit—is minting a trillion-dollar platinum coin. If that somehow sounds not serious enough, other work-arounds certainly seem plausible as well. But it should be remembered that the least serious outcome is the one that causes the most damage: letting a wholly baseless bit of numerology—and not the needs of the American people—determine what the nation is allowed to spend.
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