Alan Greenspan to David Gregory on “Meet the Press” (via Politico):
"I have a more fundamental question. Why do we have a debt limit in the first place? We appropriate funds, we have tax law, and anyone reasonably adept at arithmetic can calculate what the debt change is going to be. … [T]here is a major problem in cutting spending. … [I]t is inconceivable to me that we’ve put ourselves in this position. Why we are continuously going back to the well to continuously up the debt limit when we already predetermined what that limit has to be, and so, consequently, they’re trying to abrogate what the Congress did?"
It is a pretty fundamental question. What is the purpose of a debt limit – note the word, “limit” – if it only serves as a temporary point at which, when reached (again) Congress reconvenes and raises it almost automatically? It makes no sense. But then we’re talking about Congress and politicians here.
Greenspan’s point is dead on target. What is its purpose if not to limit spending to that amount or less? And what real purpose does it serve if it is continually raised?
The answer to the first is “political not policy” and the answer to the second, unfortunately, is “none.”