The $2.4 trillion debt-limit raise
Amid all the fuss over the debt-limit negotiations, I haven’t seen much emphasis on how much the debt limit is going to be raised. But here’s a pretty concrete figure: $2.4 trillion. It’s the number being “eyed” and “mulled” by Congress, which translated out of Reutersese means that the best-case scenario here is that there’s going to be another knock-down debt-limit fight in the immediate aftermath of the November 2012 election.
Now a $2.4 trillion debt-limit hike is obviously a much better outcome than the $290 billion increase that Congress passed at the end of 2009. And by historical standards it’s large. But as these discussions become increasingly fractious and political, they must also become increasingly infrequent, for fear that they’ll simply become budget negotiations by proxy. (Or even something else entirely: while the Republicans are insisting on spending cuts this time around, there’s no telling what the quid pro quo might be next time.)
It’s too much to hope that the debt limit will be abolished entirely, despite it doing no good and lots of harm. But can’t Congress make it dynamic, at least? Set it at a certain percentage of GDP, something like that? If they wanted, they could even make that percentage decline over time. Anything would be better than the system we’ve got right now.