1) In its current form, the debt limit does little to restrain America’s national debt, while creating a serious chance for crises in which the U.S. Treasury would be unable to meet all of the country’s obligations.
2) The real decisions about debt are made when Congress decides on spending and taxes. The debt ceiling functions as a confusing afterthought. A reformed process could improve accountability.
3) Congress should act to reform debt limit processes so as to minimize the chance of crises, while considering substitute mechanisms to promote fiscal discipline.