Walls and ceilings

The government shutdowns that seem to be a regular feature of life in Washington DC these days are generally blamed on the bloody-mindedness of the members of Congress, on both sides of the aisle.  That's certainly a big part of the problem, but another element is the fact that the US budgetary process is fundamentally flawed.  The so-called "debt ceiling" is unknown outside the United States, and there's a good reason for that: it effectively makes the whole budget mathematically unresolvable. 

I wrote about this during a previous shutdown in 2013:

Most economists and media commentators realize that the debt ceiling is far more trouble than it's worth, which is why it's an unknown concept outside the United States.  It's likely that most politicians on both sides of the debate (the tea party types probably excluded) know this too.  The fact is that trying to set a debt ceiling separately from spending and taxation decisions makes for a mathematically over-determined system.

In simplified form, there are three variables in play: taxation, spending and the deficit (financing of which results in the government's debt).  You can decide how much you want to spend and how much tax you want to raise, and then the deficit (and addition to debt) follows mechanistically.  Or you can decide how much of a deficit you are prepared to tolerate and how much taxation you want to raise, and those two figures will determine how much you can spend.  You can't determine all three things independently, yet that's what the debt ceiling attempts to do. 

The current shutdown is not about the ceiling as such -- it's about the wall.  However, as they take over the House of Representatives, the Democrats are trying to change the rules so that the debt ceiling becomes less of an obstacle in the future.  In particular they are trying to reintroduce something akin to the old "Gephardt Rule", which effectively avoided House-Senate wrangles over the debt ceiling for many years.

It's worth keeping an eye on the progress of these rule changes, because the Treasury Department will run out of borrowing authority by the end of March, and even with the use of "extraordinary measures" could be pushed to the brink of default by some time in the summer.  At least a few commentators are fretting that Donald Trump, who is likely to become increasingly frustrated and angry as the year progresses, might actually be reckless enough to countenance a default,  the ultimate gesture of defiance to the established order.

Of course, the sensible thing for Congress to do would be just to abolish the debt ceiling altogether. Unfortunately, both sides seem to enjoy these opportunities for grandstanding far too much for that to happen. Sure, 800,000 Americans are either furloughed or working without pay, but who cares about them?