Debt Ceiling Madness From <i>National Review</i>

Debt Ceiling Madness From
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National Review Online has published an amazing editorial which advocates redefining the debt ceiling so as to exclude any borrowing necessary for servicing the national debt but continue limiting the borrowing "for any other government spending."

The editors disingenuously claim that such redefinition "would take default entirely off the table." Yes, this may be true in a very narrow, technical sense. But not raising so redefined debt ceiling would still mean the government defaulting (or should I say "reneging" to avoid offending the sensibilities of NR editors?) on its legally binding contractual obligations to entities other than bondholders (e.g. government contractors). Such an event would still have very serious negative consequences (potentially including a catastrophic credit rating downgrade), as I explained in detail during the last debt ceiling fight in 2011.

National Review once was a leading magazine of serious conservatism. Conservatism holds the rule of law in very high regard (higher, in fact, than representative government and free elections). One of the most important principles of the rule of law ever since its inception in Ancient Rome has always been pacta sunt servanda (contracts must be honored). One of the most important functions of the government is enforcement of contracts. The government itself should always strive to honor its own contracts and not breach them without very compelling reasons. By advocating lawlessness for the sake of political expediency, National Review has abandoned its own traditions of intellectual conservatism and embraced right-wing populism that would have probably been detested by the magazine's founders.

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