J.D. FOSTER: Trump Is Right About The Debt Limit — Kill It

President-elect Donald Trump has called for either eliminating the debt limit or pushing it far into the future. Many conservatives are aghast, with federal debt in the trillions predicted to soar further, another unfortunate legacy of the Biden administration. Even so, Trump is right.

In theory, the debt limit forces policymakers to review the big-picture results of their fiscal policies. It is a second bite at the apple after Congress passes a budget resolution, tax legislation and the annual spending bills.

In practice, the debt limit generates typical Washington theater with no meaningful consequences except to create the possibility of an economic disaster.

The good news is that failure to raise the debt ceiling would produce an instant balanced budget. The bad news starts with the fact that the Executive Branch lacks the legal tools to implement a balanced budget. Absent detailed legislation, the president would have to prioritize certain spending while shorting other spending and without the authority to do so.

Worse, capital markets worldwide would … well, no one really knows. The result could be the financial equivalent of the L.A. fires or a tempest in a teapot. The good bet favors conflagration to make the 2008-2009 financial crisis seem like a wayward ember but, again, no one knows.

As these are risks no sane person would run, a debt limit dustup is analogous to prescribing medicine that clinical trials have shown to be ineffective, but that could be harmful or fatal to the patient.

Debt limit defenders object that federal debt