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WTF? Government Debt and Constitution Limits -

WTF? Government Debt and Constitution Limits
This post is not about smoking exactly but it is about addiction. I’ve been wanting to write a post on constitutional limits to government debt for a long time and you’d think that by now the subject would be cold. You’d be wrong – a bunch of European countries, Portugal included, are still trying to enforce the rule. What were all these people watching when the US put up a degrading political show during the debt ceiling negotiation? Plus, let me tell you one thing about the Portuguese culture (I’d extend the analysis to most countries) – people, including and especially politics, will always find the back door to a law limiting their rights. Just like smoking, if you don’t fix the addiction and simply throw your last pack in the lion’s cage, you’ll find a way to get that pack back once you’re desperate. In Portugal specifically, where laws are hard to enforce, you can imagine how effective constitutional limits would. Portugal is the land of fait accompli policy – go over the debt ceiling and then we’ll see what happens.

But let’s ignore geographic specificities and focus on why a debt ceiling is ridiculous. I’ll use another metaphor to illustrate my point – a debt ceiling is like telling someone they can drink as much as they want and later preventing them from using the restroom. Maybe it wasn’t that good of a metaphor but my point is, politics all over the world have a mechanism to stop governments from spending more – it’s called budget. During the budget negotiation is when you tell a government to stop drinking. If you allow it to go to the water fountain there’s no way back – either it’s going to pee on its pants or it’s going to implode.

Sure, sometimes the political calendar doesn’t make this process linear but that’s part of the democratic process. Plus, political hypocrisy never prevented those who approved the budget to come later claim they can’t raise the debt ceiling. So I question, why are we rushing into this kind of process? Do we really want to put up this kind of show every year or so? I guess politics can be that cynic and it’s sad.

Image: scottchan /

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