Debt Limit Follies Need to Stop Now

Would the U.S. have defaulted on its debt payments if Congress had refused to raise the debt limit? Probably not right away. But the risks were real and presented a level of danger we should never again inflict upon ourselves.

Conservatives like to say a debt-limit freeze could be manageable. They point out that the government takes in more than enough tax money each month to more than cover the interest on the debt. So, in theory, the government could make "hard choices" to pay bond holders before it pays for other things. It also, theoretically, could have borrowed more money as old debt was retired.

That sounds logical, but it ignores some pesky realities. Those involve serious technical problems, as well as economic and political complications.

Technical problem number one: It is not clear that the U.S. Treasury or the president have the legal authority to prioritize payments in order to put bond holders at the front of the line. So, in order to do that, somebody might have to break the law.

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