Laurence Tribe on the debt limit

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@Neuromancer

Cutting spending will not change the current debt so the debt limit still needs to be raised.
It will reduce future additions to the debt, but that’s a separate issue.

I get anyone with somewhat less knowledge of econ would think that. It is not true during this longer period of time we are entering.

Currently the addition marginally more debt means an industrial policy. As we get that underway more debt is not the heart of the matter. Lowering the debt to GDP ratio is the issue. That does not mean lowering the debt level. It can mean adding to the debt.

@albaby1

As a general matter, the only reason you need to raise the debt limit is to allow future additions to the debt. If you were to reduce current spending to the level of current receipts, you don’t need to sell more debt - and thus don’t have any issues with the debt limit.

That is temporary. Skipping any calamity there is going to be a slowdown in the US economy if we spend less. That means we would see the debt soar as tax receipts decreased.

While those who said supply side econ tax cuts would increase GDP growth were totally wrong…increasing taxes and spending more right now will increase tax revenue substantially more than the said tax hike. Not necessarily in the first year but for years to come after the first year.

The GOP needs to wise up.