| One argument you hear for having a debt ceiling is that itĂ ‚¬ „ s useful as what the political theorist Jon Elster calls a Ă ‚¬Ĺ"precommitment deviceĂ ‚¬ ťĂ ‚¬"a way of keeping ourselves from acting recklessly in the future, like Ulysses protecting himself from the Sirens by having himself bound to the mast. As precommitment devices go, however, the debt limit is both too weak and too strong. ItĂ ‚¬ „ s too weak because Congress can simply vote to lift it, as it has done more than seventy times in the past fifty years. But itĂ ‚¬ „ s too strong because its negative consequences (default, higher interest rates, financial turmoil) are disastrously out of proportion to the behavior itĂ ‚¬ „ s trying to regulate. For the U.S. to default now, when investors are happily lending it money at exceedingly reasonable rates, would be akin to shooting yourself in the head for failing to follow your diet. |
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