Let's see, what other countries have a debt limit, because, that would be a good thing, right?
Canada: no debt limit. EU: no debt limit. Japan: no debt limit. China: no debt limit. Britain: No debt limit. Singapore: no debt limit. Taiwan: no debt limit. Korea: no debt limit. Brazil: no debt limit. Russia: no debt limit. Switzerland: no debt limit. Sweden: no debt limit. Czech Republic: no debt limit. Hungary: no debt limit. Poland: no debt limit. Turkey: no debt limit. Norway: no debt limit. Mexico: no debt limit.
Get the picture?
United States of America: STUPID.
'nuff said?
4 comments:
Small correction: Australian Debt Limit
@Senexx
The problem with the US, and one that does not exist in Oz is that the US Treasury is forbidden from printing more than US$ 400 million on US Notes (as differentiated from Federal Reserve Notes) Thus, US cannot finance a deficit by "printing" without being indebted to the Fed. This I believe is different in the US and most other countries. This particular law dates back to the time of Abraham Lincoln.
Hence the Platinum Coin Solution. There is no limit to the face value of the platinum coin, and no limit as to the amount of coinage that can be issued.
As I look through the rest of the legislation, you are correct - despite the prohibition of breaching the limit, there is no punishment for breaching it. Unless of course it is in other legislation.
However as this was being discussed in January of this year on CrookedTimber which led me to read a standard New Keynesian response on Twitter which was "As GDP grows the nominal value of the ceiling rises ."
Good one Mike.
It's not just stupid.
As this is the US - it is exceptionally stupid.
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