Economists Agree That The Debt Ceiling Should Be Abolished

Federal Reserve Chairman Ben Bernanke said yesterday that he’d be happy to see the federal debt ceiling — which Congressional Republicans plan to use as leverage to secure deep domestic spending cuts — swept into the dustbin of history. A group of Democratic House members are planning to introduce a bill that would do just that.

Economists largely agree with that sentiment, according to a new survey by The University of Chicago. Of the 38 economists asked, all but one agreed that “a separate debt ceiling that has to be increased periodically creates unneeded uncertainty and can potentially lead to worse fiscal outcomes”:

Some of the economists did not mince words. Anil Kashyap said, “Deciding whether or not to pay the debts incurred to fund the previously approved tax and spending is nuts.” “The debt ceiling is a dumb idea with no benefits and potentially catestrophic costs,” said Richard Thaler. Former White House economist Austan Goolsbee merely said that the debt ceiling is “obviously” a problem.