Argument for ending the debt ceiling

>>> at the beginning of tonight's show we went through the white house 's opening bid on the debt ceiling. you remember? $1.6 trillion in tax increases. 600 billion in spending cuts. 200 billion in new stimulus. and a very clear message to the republicans. if you would like more medicare cuts, then you propose them. go right ahead. but that actually wasn't all that was in their opening bid. there was something else too spp something kind of awesome. there is also a proposal to end debt ceiling crises forever more. the idea comes from a most unlikely source. senate minority leader mitch mcconnell who proposed in july 2011 to permit the president to unilaterally raise the debt ceiling unless congress voted to stop him and unless he proposed accompanying spending cuts. out in spending cuts they didn't have to pass congress , like them or even vote on tlem. he just today propose them. send them on over at the same time. even if congress did vote to stop him from voting the debt det ceiling, a vote of disapproval, the president could vietn veto that. congress with wo have to overturn the veto. they want to take this and make it law for all of time. ditch spending cuts part but the rest of it is pretty much the same. the effect would be to finish off the debt ceiling forever. make it no long ear threat to the economy. the president could raise the debt ceiling and congress frankly couldn't do much about it. republicans are laughing this part of his opening bid off as a ridiculous pie in the sky proposal. mcconnell for instance who abandoned it long ago because republicanes it hated it the second he proposed it, he is totally against it now. but it is actually a great idea. one that could do more to protect our economy in the future than anything else in the debt deal. even better, it would cost us nothing. it is perhaps the single best idea in american politics today. the debt ceiling is an aknack ronism, an accountability idea from when congress didn't involve itself much in federal budgeting. today congress has fuel control of the budget. there isn't accountability op a run away executive any more. it is calling into question whether congress will pay the bills it has already chosen to incur. like buying a tv then taking a family vote on whether or not you will pay for it when the check comes due. but this is not like grandfather clocks. this is like bleeding someone you suspect to be a witch. the global crisis probably would result. even if we return back to sanity and begin paying our bills again, america's borrowing costs would be forever higher and the market's confidence would be permanently harmed. the bipartisan policy sector estimates the near miss we had in 2011 cost us $18.9 billion. billion with a b. that is 18.9 billion. we lost for no reason. it didn't buy us any government services or lower anybody's taxes by even a dime. it is time to get rid of the debt ceiling. and don't take it from me. take it from the policy makers who have had to deal with it before. like alan greenspan , former federal reserve claireman.

>> i have more fundamental question. why do we have a debt limit in the first place? we appropriate funds. we have tax law . and one reasonably adept at arithmetic can calculate what the debt change is going to be. the congress and the president have signed legislation predetermining what that number is. why do we need suspenders and belts is something i've never understood.

>> now that we got them, the question is --

>> now that you've got them, the question essentially is, there is a major problem in cutting spending. and anything that works in my regard is probably helpful. the difficulty that i have is you cannot have a position which stipulates that i will never allow the united states to default. but on the other hand, i will not allow the process to go forward unless there are additional actions with respect to the debt.

>> so you can't let it default.

>> well, you can, but you shouldn't.

>> former treasury secretary robert ruben agrees as do a number of his successors in that position, including larry summers and former treasury secretary paul o'neill. paul o o 'neill said p is hard to make a rational argument for the debt ceiling. is it the minority can use it to extract policy concessiones from the majority as republicans did in 2011 . in other words within the argument for the debt ceiling with s that we should enter the american economy into a never-ending game of russian roulette . because whichever party a majority of americans did not vote for, wants to keep their shot at the winnings. that is not a very good argument. it is long past time to get rid of the debt ceiling and the modified mcconnell/obama plan is as good a way as any to do it. it gives lawmakers a way it avoid a fiscal cliff or fiscal curve. it can end flirtations with fiscal suicide. that the lawrence o'donnell. read my work at wonkblog.com. "the ed show" is up next.