In a letter to Congress yesterday, Treasury Secretary Timothy Geithner urged elected officials to raise the $12.1 trillion debt ceiling since, according to current projections, that limit may be reached as soon as mid-October.
If there is a more inane concept than a U.S. debt "ceiling" - one that is moved upward, regularly, whenever necessary - someone please tell me what that inane concept is.
And, no, Geithner's justification for the higher level of U.S. government debt does not qualify since it is directly related to the ceiling itself.
It is critically important that Congress act before the limit is reached so that citizens and investors here and around the world can remain confident that the United States will always meet its obligations.
You see, in the twisted logic that passes for policymaking in Washington, it's critically important that the limit be increased before it is reached. Otherwise investors may lose confidence in the entire system - not so much because of the spiraling debt and the lack of any sort of realistic plan that would see the money be repaid, but because lawmakers hadn't paid close enough attention to the relationship between the debt and the debt ceiling, failing to move the ceiling upward when conditions required such action.
The debt ceiling was last raised just six months ago when the stimulus bill was passed.
This post was republished from Tim Iacono's blog, The Mess That Greenspan Made.